How do you secure a house before your own is sold?

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MissRibena

Guest
Hi everyone

I've found a house I want to buy. I can afford it once my own house is sold and my house is going on the market tomorrow. What are my options in securing the purchase of the house I've set my heart on in light of the fact that I know the seller has other interested people (although I don't know about any offers)?

As I understand it, I could:

1. Pay a booking deposit and let matters proceed to contract as normal. Have contracts include a "subject to sale" clause and hope she doesn't find anyone with cash up front before she signs or that my house sells really quickly.
2. Pay an inflated booking deposit to show how serious I am (assuming the bank will give that to me).
3. Investigate some kind of briding finance - how expensive is this and how likely to get it would I be?

Vendor knows I have a house to sell and I'm crap at lying/fibbing etc. so that's not really an option. Also she's only moved up the road, so she'd be my future neighbour (fingers crossed).

I'm trading down so the actual price of the house is fine, the problem is that all my savings are in an SSIA so I'm going to have to get some bank credit no matter what I do and I'm wondering what the smartest way to go about this is without losing this house.

Thanks in advance
A slightly stressed
Rebecca
 
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EAMONN66

Guest
im doing this myself at the moment. we paid a 5k booking deposit and are getting a top-up on our existing mortgage to cover the full 10% deposit. when we sign contracts to sell our curent prop, we can complete on the new house via a combination of the full new mortgage + bridging for the balance. when we complete on the sale of our current house, the bridging and current mortgage will be paid back. the way it looks now we could probably complete both transactions on the same day and would therefore not need the bridging loan, but i would like to close on the new house about a month before we have to move out so that it can be made habitable with the minimum of fuss. im being charged 4.8% p.a. for this , which although over the odds i dont mind paying as its only for a few weeks
 
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Once Bitten

Guest
Not speaking from a professional background in this area, but ...

Nothing will secure the property short of the 10% deposit and a signed contract by BOTH the purchaser and vendor. You can talk to the seller all you want about increased deposits, but without a mutually signed contract, do not consider the house secured.

To make that happen financially, you need you 10% and you need your mortgage loan offer. Your circumstances may mean you need bridging for the 10% and maybe even bridging for whatever equity you have tied up if you want to close on the new one before closing on the old one. However, remember that your loan offer itself may have been made on the basis of a contract signed for the sale of your old house. If that is the case, you are stuck. I have found situations like that where the bank is comfortable with the new situation but will not bridge for the interim period, in which case your purchase is at the mercy of the sale of your own.
 
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Doogo

Guest
I have a slightly different scenario at present that i would love anyone's input on -
i'm currently negotiating sale of my house and purchase of another
the sale of my house is going through fine - there are no problems with contract, date should be mid mar

the purchase of new house is 10% paid down deposit, contract signed and closing date begin mar - the vendor is very keen that this date does not budge!

there is only about 2 weeks in difference between the two - i'm uninclined to look for bridging finance (only partial equity required from sale monies in order to cover difference between purchase price and mortgage negotiated)

Should i go down the bridging route (not what i want because it is woefully expensive), or look to increase the mortgage amount (not what i want because i'm happy with the level it is at now), or stall on some details that i need to finalise

.... if i stall, is there any possibility that the vendor could withdraw his side of the deal?
 
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Sarah Wellband

Guest
If contracts are signed on both sides it's a "closed" bridge and the bridging finance will be charged at homeloan rates - assuming your lender offers the facility. Otherwise it's easy to increase the new loan amount and then repay a chunk once the sale closes (assuming your income covers the increase). Otherwise you could simply "go on holiday" for the two weeks in question, the vendor's solicitor would issue you a 28 day completion notice which you would satisfy in 14 days. Given that it is just two weeks would both sides not compromise by a week each?

Sarah

www.rea.ie
 
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