Buying a negative equity house

Lucy B

Hi. We have had our offer accepted on a house that's in negative equity. We are awaiting to hear whether the bank accept our offer. Estate agent rang yesterday to say it will take a week to get an answer from the bank....thought this was strange, and started to google and check through past posts here and am shocked at the length of time it could take! Wondering if this is still the case or had it improved in the last year.

Really finding this house hunting so hard. We were supposed to buy the house we have been renting, but our landlords increased the price, so can't afford it, and so far we have been out bid on 4 other houses!! So stressful.

Is it worth it to hang on in there with a negative equity house? Anybody had an experience where it happened in the usual 6 to 8 weeks that it takes to close?

campingcarist

In my experience, vendors in negative equity are rarely on the ball and many haven't even contacted their bank about the sale. It would be useful if EAs made enquiries about the vendors state of affairs as regards the sale in that the sale had been agreed with the mortgage company and all documents were in order and the sale ready to proceed.

I was fortunate enough to buy from someone who had everything in order, per-arranged with their bank, their solicitor was up to speed with the situation and basically the purchase went through without a hitch.

castle2012

I sold a house in negative equity and I had this approved with my bank in days to sell but I had the ground work done with the bank over two months previous .

Uno my Uno.

Depends totally on which bank it is and how organised the vendor is.

Some banks are very quick at getting these things sorted, some are not to bad and one in particular is very slow in my experience.

If the Vendor has been liaising with the bank the sale is most likely at the banks request so they will already have agreed a figure at which they will consent to sale. If you have reached that figure there shouldn't be too much of a problem. Closing usually takes a little longer again depending on the bank.

Lucy B

Thanks for replies. Am hoping that this is going to be our situation. They have never hidden the fact that it was a negative equity sale, we just didn't realise that people seem to have drama with these sales. When I hear back from ea next week, will ask him a few questions. But don't have much faith in estate agents to be honest after our experiences so far.

Should we ask for the letter of consent from the bank to be sent to our solicitor before we proceed any further?

The_Conductor

Lucy B wrote: »

Should we ask for the letter of consent from the bank to be sent to our solicitor before we proceed any further?

Exactly. That is the first step. In the absence of a copy of this letter- just walk.

Uno my Uno.

The_Conductor wrote: »

Exactly. That is the first step. In the absence of a copy of this letter- just walk.

Some banks won't issue a letter until later in the process. I would say it depends on how things progress and how much you want the house. To a buyer, some properties are worth a six month slog others aren't.

gmisk

There is a massive thread on this already I think.....will post a link if I can

I personally would run a mile, unless the bank have agreed 100% to the sale, so definitely try and get that letter!

The_Conductor

Normally if a buyer is serious- they will have done all the groundwork with their lender in advance. If they haven't- its a long and bumpy road- and there is no guarantee that the lender will accede to the sale- esp. if the seller has not come to an agreement with them as to how the deficit is to be accounted for.

crazy cat lady

We are waiting over a year now for the bank to release the consent to sale and in the meantime they have valued the house at 15k more than the sale agreed price. That was 8 months ago.

I hope you're not kept waiting as long as we are!!

riclad

it depends on the income of the seller,
is the ne 10 per cent or 30 per cent.
Can the bank and the seller agree , will the loan be paid off, 100 per cent, 90 per cent etc or less when the house is sold ,
will the seller still owe the bank say,50k after the house is sold.
Does the amount you pay cover most of the mortgage.
I know 1 case of ne, where bank wrote off 15k,house was empty. btl unit,
client put the house up for sale, stopping paying mortgage for the last 2 years.
The bank can stop any sale if the wish,if offer is less than the loan on the house.
You have to find out ,are the bank and the seller in agreement in all this ,probably by talking to your lawyer.

I,M not a legal expert ,i would expect the loan amount to be paid off, to be more important than the current value of the house.

ionapaul

Hmm, we're sale agreed on a place that's in negative equity, but the sellers have indicated that they've lodged the shortfall between the purchase price and the outstanding mortgage with their solicitor, so when our deposit + mortgage amount is added to it, the mortgage should be ready to be discharged.

Have people been having problems in the same circumstance? All of the money is there, why would the bank delay things or not allow the mortgage to be discharged?

gmisk

crazy cat lady wrote: »

We are waiting over a year now for the bank to release the consent to sale and in the meantime they have valued the house at 15k more than the sale agreed price. That was 8 months ago.

I hope you're not kept waiting as long as we are!!

I can relate to this...was sale agreed on a house for over a year.
Eventually it was withdrawn....back on the market a month later for 65k more than I was sale agreed at....still on the market over a year later

draiochtanois

This post has been deleted.

riclad

I can,t think of a reason why a bank would delay a sale,
where the sale price, and the money gauranteed by the seller will pay off the mortgage completely.

Ron_Swanson

We sold our negative equity house (Dublin) and bought our new house (Wicklow) in 10 weeks all in - so our purchasers went SA to moving in in just over 2 months. We did not put our NE house on the market until we had met with the bank and had approval on what we they would let us do in theory (they were true to their word). We took on the NE overspill rather than ask for a write down so not sure what the situation is with your vendor but just to let you know it doesn't always take an inordinate amount of time. I hope it goes well and quickly for you, best of luck

Lucy B

So, the plan should be, go sale agreed, if their bank accept our offer, and once we are sale agreed, our solicitor will be able to find out from their solicitor if things are going to be straight forward. And get or try and get the consent to sell letter. I could ask ea few of these questions when he rings with news next week.

Thanks for replies all.

summer21

Lucy B wrote: »

Hi. We have had our offer accepted on a house that's in negative equity. We are awaiting to hear whether the bank accept our offer. Estate agent rang yesterday to say it will take a week to get an answer from the bank....thought this was strange, and started to google and check through past posts here and am shocked at the length of time it could take! Wondering if this is still the case or had it improved in the last year.

Really finding this house hunting so hard. We were supposed to buy the house we have been renting, but our landlords increased the price, so can't afford it, and so far we have been out bid on 4 other houses!! So stressful.

Is it worth it to hang on in there with a negative equity house? Anybody had an experience where it happened in the usual 6 to 8 weeks that it takes to close?

Sale agreed since mid October .
Now mid May and still not complete with documents pending from bank.


My advice ...pull out now

TheDriver

Find the big thread on NE, will make you realize you are a pawn in peoples finance bargaining and don't believe a word an EA tells you

MarkAnthony

OP personally if you love the house I'd plonk down the booking deposit and make progressing further conditional on the consent etc being forthcoming. Keep looking and if you find something else in the meantime just get the booking deposit back.

Vendors that hire incompetent solicitors and drag their heals deserve all they get. I'm afraid I'm rather embittered from my own experience but it seems the attitude taken is that all is fair in love and war until contracts are signed.

2013Lara

It took me 18 months from sale agreed to close. I can't even describe the stress of it all, and the further into the process we got, the harder we found it to pull back. Ask for the consent. Keep looking elsewhere and put no money at all in to that house until you are sure it will be sold to you. I would be hesitant to even employ a solicitor until you know the consent is in place. My solicitor fees doubled. Nightmare from start to finish.

househero

Its bin 11 months and cost us €5k and it's still not ours... Might never be ours.

Walk away.

Lucy B

Oh my god, how is this happening to people? Im so sorry to hear that you all are going through this, as if it isn't stressful enough already trying to find houses and then this. Surely the government could do something? Or the banks?

Some people seem to have good experiences and some awful. So all down to how truthful/ organised the vendor is.

I found the thread about negative equity on here, just said I would post again as I think the last post on it was about 8 months ago or something like that, was hoping that things had changed.

So the general advice seems to be walk away. Such a shame because we love the area, it's where we are currently living and our son wouldn't have to change school. Same for daughter with playschool. But don't want to wait 18 bloody months!!! Crazy!

2013Lara

Lucy B wrote: »

Oh my god, how is this happening to people? Im so sorry to hear that you all are going through this, as if it isn't stressful enough already trying to find houses and then this. Surely the government could do something? Or the banks?

Some people seem to have good experiences and some awful. So all down to how truthful/ organised the vendor is.

I found the thread about negative equity on here, just said I would post again as I think the last post on it was about 8 months ago or something like that, was hoping that things had changed.

So the general advice seems to be walk away. Such a shame because we love the area, it's where we are currently living and our son wouldn't have to change school. Same for daughter with playschool. But don't want to wait 18 bloody months!!! Crazy!

Do you know what bank the vendor is with? Some are quicker than others. Our vendors mortgage was with EBS and they were a disaster. Vendor equally to blame though.

The_Conductor

Lucy B wrote: »

So the general advice seems to be walk away. Such a shame because we love the area, it's where we are currently living and our son wouldn't have to change school. Same for daughter with playschool. But don't want to wait 18 bloody months!!! Crazy!

It all depends on how well organised the vendor is- whether they have sat down with their lender and organised how the negative equity is to be dealt with etc. If they have done this- it 'may' be plain sailing (providing everything is indeed in order). Otherwise- its hell on earth.

FR_JACK

Lucy B wrote: »

Oh my god, how is this happening to people? Im so sorry to hear that you all are going through this, as if it isn't stressful enough already trying to find houses and then this. Surely the government could do something? Or the banks?

Some people seem to have good experiences and some awful. So all down to how truthful/ organised the vendor is.

I found the thread about negative equity on here, just said I would post again as I think the last post on it was about 8 months ago or something like that, was hoping that things had changed.

So the general advice seems to be walk away. Such a shame because we love the area, it's where we are currently living and our son wouldn't have to change school. Same for daughter with playschool. But don't want to wait 18 bloody months!!! Crazy!

Any updates on the house? I went sale agreed on a house in May this year. I was told by the vendor's solicitor that it usually takes 2 weeks to get consent. I am now waiting 7 weeks. I am pushing my solicitor to get answers. I read these posts and a little part of me died inside....the hope of moving into the house before Sept. How foolish was I!! I cant believe it can take 18 mths+. Ridiculous. Anyone any ideas what Ulster Bank are like for issuing consent to sell? There is nothing suitable on the market where I want to buy so I will hang in for a bit but certainly not 18 mths!

Denisoftus

I feel your pain mate, unfortunately we are at the bank's mercy now, and nor auctioneer neither vendor can help or speed it up in any way (( Your only options are to wait or walk away Perhaps it will be all to the best if you manage to find something better coming Autumn. Good luck anyway.

castle2012

FR_JACK wrote: »

Any updates on the house? I went sale agreed on a house in May this year. I was told by the vendor's solicitor that it usually takes 2 weeks to get consent. I am now waiting 7 weeks. I am pushing my solicitor to get answers. I read these posts and a little part of me died inside....the hope of moving into the house before Sept. How foolish was I!! I cant believe it can take 18 mths+. Ridiculous. Anyone any ideas what Ulster Bank are like for issuing consent to sell? There is nothing suitable on the market where I want to buy so I will hang in for a bit but certainly not 18 mths!

Hi there not sure if its of any help . But I sold my house with negative equity and I'm with ulster bank . I traded up . The house I purchased was a landlord doing a voluntary sale for there bank which was BOI . There was no problem with the selling part but I found the house I was buying took 11 weeks for BOI to give consent . Did the seller do his homework before hand ? I was in discussion with ulster bank for about 8 weeks before putting on the market .

2013Lara

I posted about my sale taking 18 months. Just to let you all know the vendors bank was ebs (disaster of a bank) and he was also very unorganised so I think my sale was a worse case scenario. The deeper you get into one of these sales,the harder it is to pull away. I kept telling myself we were almost there, just to hang in. We wasted a lot of money by hanging around. Our solicitor fee doubled, various valuations etc . You need honesty from the vendor and his solicitor as to how far into the process they are.

yellow hen

Ron_Swanson wrote: »

We sold our negative equity house (Dublin) and bought our new house (Wicklow) in 10 weeks all in - so our purchasers went SA to moving in in just over 2 months. We did not put our NE house on the market until we had met with the bank and had approval on what we they would let us do in theory (they were true to their word). We took on the NE overspill rather than ask for a write down so not sure what the situation is with your vendor but just to let you know it doesn't always take an inordinate amount of time. I hope it goes well and quickly for you, best of luck

In the same situation. Our negative equity was small - moderate and the bank verbally approved the figures and once we went sale agreed, we got a written letter stating that they would not prevent the sale. I think a n.e sale depends on the amount of n.e and the bank in question. Good luck op.

Many vendors don't actually want to sell. At heart they are messers and this is part of the reason why they are in difficulties with their banks. These houses are on the market as an excuse to pretend to the banks that they are doing something about their situation but, in truth, they will delay indefinitely and take any excuse to crash the sale.

yellow hen

[Deleted User] wrote: »

Many vendors don't actually want to sell. At heart they are messers and this is part of the reason why they are in difficulties with their banks. These houses are on the market as an excuse to pretend to the banks that they are doing something about their situation but, in truth, they will delay indefinitely and take any excuse to crash the sale.

Really? Do you know 'most' of these vendors? That is such an uninformed and unhelpful post.

castle2012

yellow hen wrote: »

Really? Do you know 'most' of these vendors? That is such an uninformed and unhelpful post.

Agreed . This should be about sharing solutions and helping

athtrasna

yellow hen wrote: »

Really? Do you know 'most' of these vendors? That is such an uninformed and unhelpful post.

castle2012 wrote: »

Agreed . This should be about sharing solutions and helping

If you have a problem with a post please use the report post function.

Mod

yellow hen

yellow hen wrote: »

Really? Do you know 'most' of these vendors? That is such an uninformed and unhelpful post.

Before you critisice a post at least quote it correctly.

I said 'many' not 'most' and it is based on personal experience.

The point being that if the sale process looks to be proceeding wrong, get out. The vendor might well be a messer who doesnt actually want to sell and there are plenty of those around these days.

Denisoftus

Deleted User wrote: »

The vendor might well be a messer who doesnt actually want to sell

How would you know that for sure

The_Conductor

Denisoftus wrote: »

How would you know that for sure

You won't- thats the problem.
At the moment the bigger issue is people bidding on property- with the expectation that their mortgage pre-approval, means they are entitled to draw down a mortgage for the value on their pre-approval........ Proof of access to funds- and not being in a chain- are probably worth 10% each of the value of any given bid (in the current market).

Anyhows- its sleepy time now in the market- it'll be the second week in Sept before business as usual returns.

yellow hen

[Deleted User] wrote: »

Before you critisice a post at least quote it correctly.

I said 'many' not 'most' and it is based on personal experience.

The point being that if the sale process looks to be proceeding wrong, get out. The vendor might well be a messer who doesnt actually want to sell and there are plenty of those around these days.

Fair call, apologies for misquoting you. YH

Lucy B

Have been logged out of boards for weeks and couldn't get back in, forgot password. But my phone just accepted my password now. (The same one I might add!!!!!)

Wanted to update this. Someone wondered a page or 2 back what had happened. 14 weeks sale agreed today. Went in and signed contracts yesterday. Thought we had all the paperwork we needed finally, after the deeds going missing for a couple of weeks and vendors solicitor being on holidays and then our solicitor going on holidays, us threatening to pull out if said deeds weren't found, then they decided thy the wording on the letter of consent wasn't to vendors solicitors satisfaction, but today we found out its all sorted and our solicitor set off the contracts for vendor to sign and solicitor requested the drawdown!!!!!! Finally!!! She is saying 2 weeks to keys!!!! We can't believe it!! So happy. It's been a long 14 weeks! Didn't think it was going to happen at some stages and were even looking at other houses.

My advice to anyone buying a house.....annoy annoy annoy your solicitor. Keep ringing them, keep asking for progress reports. Forget dignity, you are paying your solicitor to get this done. So if you feel that they could be moving at a quicker pace....annoy them!!

Make sure there is a letter of consent if it's a negative equity house and make sure they know where the deeds are. Turned out ours wasn't even with the vendors bank, it was in an outside solicitors!!

TheBody

Those of you that SOLD a house in negative equity, what kind of stuff did you have to do for the bank?

I'm (trying) to buy a house in negative equity at the minute and it's taking ages. I was wondering what sort of stuff the bank may be asking of the vendor.

castle2012

TheBody wrote: »

Those of you that SOLD a house in negative equity, what kind of stuff did you have to do for the bank?

I'm (trying) to buy a house in negative equity at the minute and it's taking ages. I was wondering what sort of stuff the bank may be asking of the vendor.

I sold my house in negative equity in May of this year. Went sale agreed in November. The only thing that held me up was the house I was buying. With negative equity mortgage you cant sell till you have a house to buy and move into (The chain). Also in advance of me putting my own house for sale I needed writing approval from my bank which took 3-4 weeks to get.

TheBody

castle2012 wrote: »

I sold my house in negative equity in May of this year. Went sale agreed in November. The only thing that held me up was the house I was buying. With negative equity mortgage you cant sell till you have a house to buy and move into (The chain). Also in advance of me putting my own house for sale I needed writing approval from my bank which took 3-4 weeks to get.

Thanks for that.

I think the people I'm trying to buy from are moving abroad. In other words, they are not looking to buy a new house. I think this just makes everything even harder!!

yellow hen

castle2012 wrote: »

With negative equity mortgage you cant sell till you have a house to buy and move into (The chain).

I think this is case-dependent. In our case, the bank have drawn up a residual balance agreement that outlines the repayment of our negative equity should we not buy immediately.

FR_JACK

After 16 weeks the vendor finally has consent to sell the house to me. I was so close to pulling out. Need a solid structural report now. Fingers crossed!

Quandary

Myself and my wife have been sale agreed on a property since the beginning of August. We viewed the property twice and each time I grilled the estate agent about the vendors situation ie were they in negative equity, are they a distressed seller etc... The estate agent point blank confirmed that the seller was 100% not in negative equity. To make a long story short here we are now waiting for the seller to get bank consent to sell the property after finding out that he clearly was in negative equity. In my personal experience many(not all) of the estate agents I have dealt with over the last year are a combination of some if not all of the following - incredibly unprofessional, incompetent, dishonest and unwilling/evasive when it comes to answering direct questions. The estate agent had this house on their books for almost a year so it's not as if they didn't know the sellers situation.

We have since been bidding on other properties and have told the vendors solicitor this and that they are going to lose the sale if they don't provide a letter from their lender indicating the bank have consented to the sale.

The house in question meets every single part of our criteria and it will be very frustrating if we have to pull out :mad:

Gemmy46gemmy

I know this is an old post. But I find myself in same situation. Went sale agreed 2 days before Xmas 2017. Vendors met with bank to get letter of consent on Jan 26th. They originally had letter and it expired after 6 months. Going on 4 weeks now and still no sign. Have been told another 2 weeks last Thursday after being initially told 2 weeks. That came and went. Driving me mad now and seriously thinking of pulling the plug on the whole lot. Im hoping that in 2018 this process of getting the letter from the bank has improved slightly!

2013Lara

Gemmy46gemmy wrote: »

I know this is an old post. But I find myself in same situation. Went sale agreed 2 days before Xmas 2017. Vendors met with bank to get letter of consent on Jan 26th. They originally had letter and it expired after 6 months. Going on 4 weeks now and still no sign. Have been told another 2 weeks last Thursday after being initially told 2 weeks. That came and went. Driving me mad now and seriously thinking of pulling the plug on the whole lot. Im hoping that in 2018 this process of getting the letter from the bank has improved slightly!

Oh God. The memories you have brought up posting here haha! I still have nightmares about it all. Hope it works out for you. We're in the house a while now and loving it, it was worth it all in the end

Gemmy46gemmy

2013Lara wrote: »

Oh God. The memories you have brought up posting here haha! I still have nightmares about it all. Hope it works out for you. We're in the house a while now and loving it, it was worth it all in the end

Aw it’s a disaster. I’m literally losing sleep over it now. How long did you have to wait for your consent letter?

2013Lara

Gemmy46gemmy wrote: »

Aw it’s a disaster. I’m literally losing sleep over it now. How long did you have to wait for your consent letter?

I can't even remember, it's all a blur now. 18 months from sale agreed to close.