Is this too risky

Macker1

Looking for advice from people that have experience in the property game.


As of Friday I put the family home up for sale. Also on Friday I paid a booking deposit of €5000 on a new 4bed semi down the country.In around 4-6weeks I will have to pay another 5k which brings the total to 10k The new house is around 10-12 wks away from completion.

Now for the dilema........ I plan to sell my house for around 300k and by releasing the equity of around 260k I will purchase the new house for 220k. My concern is that even if everything goes well with the sale of the house it may not be completed before the builder expects me to close out on the new house. I'm worried that he may become impatient and choose to look for an alternative buyer. I have no savings at all ( equity in house ) and cannot afford to lose the 10k that I will have handed over by that stage.


Are builders patient in regards to situations involving the sale of another house ???

If I have sale agreed on my house would this be an advantage in discussing with builder ??

What rights do I have ??

What steps can a solicitor take to protect my interests ??

Should I pull out due to the timeframe being so tight bearing in mind my house has only just gone on the market ??



Any advice appreciated

coolhandluke

Are you saying you only have a mortgage of E40,000 on your existing property ?

The_Conductor

Contact your bank/building society re a bridging loan. They do them all the time. Interest rate on them tends to be high- but given that the loan is secure (on your property) and the fact that you'll only have it out for a short length of time, it will tide you over nicely any differences in the time frames. It would be a shame to loose your new house over a momentary lack of liquidity.

MorningStar

THere is no way to know how long your bridging loan will be so you should try to reduce this time as much as possible. It will take 8-10 weeks to sell your house if you have a buyer now and that is if everything is done right. Focus on selling your house and be prepared to move into rental for a month or two.

AS with most people's houses I am sure you could declutter and have things packed and ready to go or in storage if need be. Best presentation gets the best price.

The builder will pull out if you are not ready. He will very unlikely keep your deposit and/or be on time

Macker1

coolhandluke wrote:

Are you saying you only have a mortgage of E40,000 on your existing property ?

Yes, infact around 37k:)

Macker1

smccarrick wrote:

Contact your bank/building society re a bridging loan. They do them all the time. Interest rate on them tends to be high- but given that the loan is secure (on your property) and the fact that you'll only have it out for a short length of time, it will tide you over nicely any differences in the time frames. It would be a shame to loose your new house over a momentary lack of liquidity.

I did think that a bridging loan would be a potential solution. However at present I'm unemployed and have no significant savings of note. The whole process would be financed by the equity in my present house. I would assume that having no job is a major obstacle for Bridging purposes

MorningStar

Macker1 wrote:

I did think that a bridging loan would be a potential solution. However at present I'm unemployed and have no significant savings of note. The whole process would be financed by the equity in my present house. I would assume that having no job is a major obstacle for Bridging purposes

Considering no spare money and no job I think you should know this inside out. From what you are describing I would say this is very risky. You are trying to work with very little room for error. So given your current situation it is very risking. Are you trying to clear a debit too? Have you got any money released yet? What are the banks saying to you?

Macker1

MorningStar wrote:

Considering no spare money and no job I think you should know this inside out. From what you are describing I would say this is very risky. You are trying to work with very little room for error. So given your current situation it is very risking. Are you trying to clear a debit too? Have you got any money released yet? What are the banks saying to you?

No debt other than my existing mortgage of 37k.


Current House Sale Value is estimated at 300k
New House Purchase is 220k
Which leaves 80k to pay off current mortgage, legal fees & Auctionner. I would expect to have about 35k in my pocker when moving to new house.

You are right in saying that its a tight situation with little room for error. Would a bank be willing to proffer a bridging loan based on the substantial equity in the house.


When you say money released..... what do you mean ???

MorningStar

Macker1 wrote:

No debt other than my existing mortgage of 37k.

You are right in saying that its a tight situation with little room for error. Would a bank be willing to proffer a bridging loan based on the substantial equity in the house.


When you say money released..... what do you mean ???

35K profit to move and be debit clear sounds kind of nice but also kind of not worth it unless you need to do this. It depends on your age and family situation. If you are on your own and young than go for it. If you have put a deposit on a house without talking to the bank you have a problem. If you put your house on the market without talking to the bank you have a problem.
You really need to get full finacial advise now, today! It is obvious you are missing some fundemental knowledge on this.
A bridging loan done the wrong way will easily reduce your profit.
The house market for your sale price is about to rocket up so I would say now is a bad time to sell too. I would wait closer to SSIA maturity.
You really need proper advise well beyond adivse on a chat forum. Do you have a solicitor? What has he said to you?

Macker1

MorningStar wrote:

35K profit to move and be debit clear sounds kind of nice but also kind of not worth it unless you need to do this. It depends on your age and family situation. If you are on your own and young than go for it. If you have put a deposit on a house without talking to the bank you have a problem. If you put your house on the market without talking to the bank you have a problem.
You really need to get full finacial advise now, today! It is obvious you are missing some fundemental knowledge on this.
A bridging loan done the wrong way will easily reduce your profit.
The house market for your sale price is about to rocket up so I would say now is a bad time to sell too. I would wait closer to SSIA maturity.
You really need proper advise well beyond adivse on a chat forum. Do you have a solicitor? What has he said to you?

The only money I have put down to date is a refundable booking deposit. Depending on the advice I receive and the input from my solicitor and the selling agent involved with the builder, I would have to consider my next steps carefully.

In my own opinion I would be happy to sell my house for 300k and get into a new house mortgage free and with 35k in my pocket. Main purpose of move is to a bigger house with more space ( family reasons ). In addition a move down the country would be a quality of life improvement.

Some interesting times ahead I guess.:rolleyes:

MorningStar

Macker1 wrote:

Some interesting times ahead I guess.:rolleyes:

My advise would be get your booking deposit and spend a month researching the actual terminology and details. You will get more money for your house and make a better profit in my view of the market. If you do this wrong from lack of research you will not be a happy man. You seem to focused on the simple math of it

Kinetic^

MorningStar wrote:

The house market for your sale price is about to rocket up so I would say now is a bad time to sell too. I would wait closer to SSIA maturity.

Wait about 3-6 months and you'll probably get 20k more because of all the money that's going to be released by the SSIA's.

Macker1

MorningStar wrote:

My advise would be get your booking deposit and spend a month researching the actual terminology and details. You will get more money for your house and make a better profit in my view of the market. If you do this wrong from lack of research you will not be a happy man. You seem to focused on the simple math of it

I do appreciate the input from people on this thread. Just to point out that the main reasons for moving are to get a larger house for the family ( 4 kids ) and to move to a better area ( currently in Clondalkin ). It would be great to make a lot of money but its not going to be the overiding factor. If I get the price that allows me to move with a reasonable surplus then I will be happy. More importantly the wife & kids will be delighted. I do realise that it I hold off that the price of the house will go up but the same can be said for the new houses even those down the country albeit at a slower rate.

I will be asking for the advice of my solicitor in how best to proceed. One solution is to cancel the booking on the present house and change to another with a later completion date. This would give me more time to sell my own house and at least the process could be better controlled. The fact that the new house at present is 10-12 wks from completion is probably too tight a deadline.

Spoke to BOI about bridging and this is certainly something that they could do but only at such time when the buyer for my house has signed a contract at an advanced stage. Really would like to avoid this scenario for the hassle and the obvious cost implications.