We have been in our current house for a few years and had not seriously been considering upsizing, until we recently saw a house for sale we really like. Now it seems like we would be unable to bid for this as we’re not ready to go: our house is not on the market and we do not have approval for the mortgage (although we have been assured by the bank we’d qualify for the amount).
So, we’ve probably missed out on that house. But how should we go ahead if we only want to move for the right house, and the right kind of house doesn’t come on the market very often. Is it necessary to put our house on the market for a period and withdraw it if we don’t find anything we like, having wasted a lot of people’s time including our own? I presume it’s foolish and risky (or not entertained by EA’s?) to bid without first having your own property on the market. We’ve put in the mortgage application in any case, it’ll be valid for 12 months. There’s still the unknown about how much our house would sell for, EA’s estimates have varied by quite a lot.
Appreciate any advice from those who may have been in a similar situation.
You’ll sit at the end of the queue in all likelihood. The seller of your desired property will be faced with people who are ready-to-go cash/ready-to-go mortgage. Going with someone who has yet to put their house on the market or who hasn’t sale agreed / verge of sale agreeing is 2nd rung territory.
We sold a few years back and refused a 420K bid from someone who had just put their house on the market (after seeing>deciding they wanted ours). We progressed with solid offers at 400K, not wanting the prospect of our time being wasted if the higher bidder wasn’t getting the price they wanted for their house.
I managed to get Ulsterbank to lend us enough to complete the purchase before the sale, and so we didn’t put the house on the market until we were sale agreed on the new one. In the end there was only a couple of weeks in it.
edit: it wouldn’t have made much difference as there were hardly people queuing up to buy the house we bought.
So my top tip is: buy a house that nobody else is interested in.
It would depend on their circumstances: are they in a chain, have they a lease running out. Probably a function of the property your selling - eg: starter home. And depend on how desirable your home vs. the competition. And the price you agree (whether bargain or not)
As Eschatologist says, if your buying a runt of the litter then you have more leeway.
It’s a problem a lot of people face so it may well be that you have to string folk along and perhaps let them down.
Mate did it during the boom: bridging finance they called it. Don’t know if its available now but imagine it would be seen in a different light to ordinary mortgage lending.
In my case the bank approved a completely new second mortgage for the house I was buying; the old mortgage was paid off when I sold the first house on which it was secured. As part of the application process I indicated my intention to sell the first house as soon as possible, but I don’t know how that fed into the bureaucracy or calculations about LTV, LTI etc, it didn’t appear in any of the loan offers.
I think I had calculated that I was still under the LTV and LTI limits owning both houses at the same time, but my point is really just to speak to the bank and see what they suggest. If you don’t ask you don’t get!