Purchasing a home from someone who is purchasing a home?

jwof2006

Hi guys,

I am looking to buy a house from an acquaintence and they are currently looking for their new house.

Can we go ahead with the sale, but have a stipulation that the current owner stays in the house until they have found a new property?

Or how does it usually work when an owner needs the finance from a house sale to fund their new house purchase?

Could I begin the process, i.e- get mortgage approval, surveyors report etc., done and then when the sellers have found the new house finalise the sale at this stage? Or can we just proceed with the sale now?

Thanks,

Jack

The_Conductor

Once upon a time bridging loans were the norm to cover eventualities such as you are describing.

The current situation is no mortgage provider will advance payments on a proposed purchase unless you can prove vacant possession of the property. I.e. your friend can't just live in the property until they find their new home- they are either selling and move out- or they are not selling.

It may sound a bit harsh- but it is the cleanest manner of dealing with everyone in a situation akin to the Irish property market where its nigh impossible to persuade people to leave property, regardless of whether they have sold it or not.

Claw Hammer

You would have to wait until your firen is ready to close the purchase of his new house and then set the closing of his sale to you and his purchase of the new house on the same day.

Peregrinus

As Claw Hammer points out, you can't complete the sale — i.e. draw down your mortgage, pay the money, acquire title — until the vendor is in a position to deliver vacant possession.

But you can enter into a contract to buy the house, and set a longish period before completion . And, if you want, you can agree an extension of that period if, despite everything, he hasn't managed to buy by the contracted completion date.

But you need to cover the risk that he fails to buy. There has to be a date by which, if he's not in a position to complete the sale, the contract is rescinded and he hands back the deposit.

Until he actually completes and hands over the property, he doesn't have your money to buy a new property with. But what he does have is the knowledge of how much he's going to get from the sale of his old house.

jwof2006

Thanks all that is very helpful comments. We plan to progress to the hand over of contracts stage at this point, and get the Mortgage Approval on this property etc., and then progress with the last phases then once they are ready to make the deal on the other home.

Kind regards,

Jack

DownByTheGarden

I have a friend who sold his house to another friend last year.

The seller was moving to a new build that got delayed because of covid and he only ended moving in last Feb.

What they did was they went through with the sale of the house. Money went into seller bank account and seller rented the house from the buyer for the few months at a nominal fee. If they were two single guys they could easily have come to an arrangement to sell the house and then the seller rents a room in the house for the intervening period.

Maybe something like that would suit. Sale would go through and seller rents a room from the buyer while they are looking for their house.