Remember bridging? How do people move now?

[onekeano]

My daughter bought a house a few years ago and is contemplating moving in the near / medium future. I've been looking at a few house with her which would suit her needs. The LTV on her current house is low ...c.40% and what place she is looking at would not require a whole lot more - perhaps an LTV of 50%.

When I was doing this kind of thing 25 (or more years ago) people would put an offer on a house and if it was accepted they would quickly put their house on the market and apply for bridging finance to cover the gap in dates between the purchase and sale.

My bank tells me they don't do bridging and neither does pretty much anyone else. I'm wondering what do people do these days? Do they have to have sold (and try to rent very short term) before buying again?

Any advice would be much appreciated,

Roy

 

[Buddyboy]

What we did, and it seems to be the norm, is that a chain of houses is created. We put in the offer on our new house, subject to the successful sale of our current house. And the people purchasing our existing house were doing so subject to the successful sale of their existing house. All three property transfers happened on the same day.
There could be a number of properties in the chain, depending on if new or existing properties are being bought, and if someone renting is now buying a house.

Other alternative is to sell your house, rent short term (or move in with family), and buy for cash/mortgage. Sometimes the person selling the house will choose a lesser bid, if it is not part of a chain, as the closing can be cleaner, i.e. if one link of the chain breaks, for whatever reason, then all the sales/purchases in the chain fall down.

 

[Brendan Burgess]

What we did, and it seems to be the norm, is that a chain of houses is created. We put in the offer on our new house, subject to the successful sale of our current house. And the people purchasing our existing house were doing so subject to the successful sale of their existing house. All three property transfers happened on the same day.

Hi Buddyboy

Was that recent?

I thought that estate agents would not deal with people whose purchase was conditional on the sale of another property?

Brendan

 

[aprentice]

We are going through this scenario at the minute its an absolute nightmare bring back the bridging loans i say
Houses are gonna sell now so theres little risk for banks

Estate agents in my experience wont take an offer seriously unless your well underway with your own sale .its not even good enough to be sale agreed
You really need to be at contracts stage of your own place.
Estate agents will use you in the bidding process to artificially inflate the price and then drop you and go with the next highest bidder whos either FTB ,Cash buyer or someone who has already sold there house

 

[Buddyboy]

Hi Buddyboy

Was that recent?

I thought that estate agents would not deal with people whose purchase was conditional on the sale of another property?

Brendan

Hi Brendan,
no, it was in 2008. Pretty much the peak before house prices started falling. You are right, looks like things have changed, as per aprentice.