Can you buy without having sold?

[nykkieberry]

We were first time buyers for our current property so we have not been in a chain before. We have found a property we absolutely love (too soon!) - however, we haven't sold ours yet (it's not on market but has been valued and is ready to market). Can we put in a offer for the house we have seen? What happens if we haven't sold once money is exchanged? What position would we be in? Thanks!

[Miss Zippy]

Firstly, some sellers will not accept an offer from you if you do not have a purchaser for your home.  Or a seller might put a condition on your offer  ( make a counter offer) and say that if you haven�t found a buyer for your property within X weeks, they will put their house back on the market (a seller will usually only do this if you have made a good offer as, naturally, a seller in a good position will not risk accepting a lower offer from a buyer who has yet to find a purchaser for their property). If you could not find a buyer for your property quick enough and you do not want to miss out on a particular property, you could take out what is called a �bridging loan�, effectively meaning you will have two mortgages in place � one for your current property and one for your new property � until such time as your current property is sold. This will put you in the same position as a first time buyer as you are not then dependent on selling your home to move. However, bridging loans are more expensive that residential mortgages, plus you have the cost of covering two mortgages until your property is sold.

[nykkieberry]

Thank you Miss Zippy as always! We are still wrestling with the housing dilemma - we had decided on a loft conversion or extension and staying but now I've gone and fallen in love with a converted barn in the sticks!!! :  ) Maybe we should put in an offer and see if he will let us have a date to sell ours by or come back to us if someone offers more. I presume if your current mortgage is �300 a month and the new mortgage is �600 a month, you would end up paying �900 a month and wouldn't receive anything back? Or would you just pay the interest on the loan for that money for that month once you pay it off?

[Miss Zippy]

A converted barn is my dream home :o)  My attitude is always if you don�t ask, you don�t get, so you have nothing to lose by making an offer now. Your house isn�t even on the market yet, so I�d wait and see what level of interest you get first before you consider anything like a bridging loan.  Personally, I think taking out a bridging loan is quite a high risk strategy unless you�re absolutely certain you have the means the cover the bridging loan and your old mortgage for a few months as you don�t know how long it will take to sell your property.  If you�re serious about doing something like that, you should seek advice from an IFA as it�s quite a specialised area of the market.  You could also speak to your current mortgage lender to see whether you could switch to paying interest only (assuming your mortgage is a repayment one) so you have more money available to you to pay for the bridging loan. If you are desperate to sell so as not to miss out on the converted barn, I think you would be better off putting your house on the market at a very attractive price, if you can afford to do this.  Although you might lose out on �5k or so that you could have got had you held out for your best price, at least you won�t have the burden of having effectively two mortgages in place which could end up costing you more in the long run.

[nykkieberry]

The house is gorgeous and my dream home! I am therefore thinking with my heart and not head!! Didn't think we would ever get a converted barn for what we can afford!!

[Miss Zippy]

Sounds like you've made up your mind!  Guess you just need to talk him indoors round :o)

[nykkieberry]

Yep - I can see a divorce on the cards if he says no!! But there again, I wouldn't be able to afford it then!! LOL!!

Seriously, a bridging loan is not an option - i couldn't cope with the stress of it. I think we will say ours is on the market and we have had a lot of interest then put in an offer then prey to god that ours sells! I gather we are not legally obliged to purchase a property if we put in a n offer and it is accepted? You can pull out can't you?

[nykkieberry]

Meant pray not prey!!!

[ludwig]

We were in a similar position when we moved recently. We got a flexible mortgage for the the full cost of the new house, and had 2 mortgages and 2 houses for a couple of months - when the sale on the old house came through we simply paid off a huge chunk of our new mortgage. It wasn't a bridging loan as such so it was at a standard rate - which was discounted for the first 3 months anyway, plus most of it was borrowed on an interest only basis to keep repayments to a minimum. It's a pretty scary business, and I wouldn't recommend it unless you are confident you can afford the repayments for a protracted length of time, which may well happen if you can't sell the old house quickly. - Also of course, someone has to be prepared to lend you the full amount of the new house.

ps, you can pull out any time up until the contracts have been exchanged.