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Saturday, October 17, 2015

A bird in the sale

I've just agreed a sale on one of my properties

Purchasers are like buses.  I have waited ages; well 5 months to get one serious buyer and then I receive two serious offers all within a couple of days.  The dilemma is should I go for the cash buyer offering two grand under the asking price or hold out for the potential of the mortgage purchaser offering me two grand over the asking price.  The difference is £4000 on an asking price of £110000.  Four grand is a decent amount in anybodies book so what do I do?  Is a bird in the hand better than two in the bush?

Context to my property sale

As with life context is everything.  I'm guessing there will be a number of you that would go for the higher offer.  I'm tempted.  I don't need the money so I could easily wait the extra month or so that I might face waiting for the potential purchaser obtaining the mortgage.  After all they have already shown my estate agent the AIP (Approval In Principle).  However, I'm not plumping for the higher offer and here's why.

A bird in the hand.... 

Firstly, I know having recently received a mortgage AIP  it means very little.  It's not an approval of mortgage funds.  This only comes after the mortgage company scrutinising your personal financial circumstances and looking at detail at a landlords investment multiples such as the rental cover and Loan To Value of the proposed purchase.  Only after these meet the mortgage companies increasingly stringent criteria will a landlord get the funding they need to make a mortgage happen.

I know the cash purchaser is keen.  My estate agent has already verified proof of funds so she can see that he has the money to cover the purchase.  He has already sent out an electrician to check out the property.  My estate agent informs me that he has already brought a similar property to mine in the area so he is aware of the leasehold structure and type of lease that affects my property.  He seems keen to get things going.

On the hand the offer from the landlord looking to secure the purchase with a mortgage is decidedly flaky.  Having made several offers to purchase the property she has offered me £110000 & £107500 and now when she found out somebody else had offered she came back with £112000.  Neither of the offers so far had been accompanied with a firm commitment or progression.  My agent has already expressed concerns over whether this purchaser is likely to moves things forward.

Given, that now I'm having to pay council tax and the ridiculous utility standing charges which works out at  about £60 per month for my electricity and gas bill whilst I'm using absolutely nothing...ridiculous!  So my property is costing me money together with the mortgage costs on an empty property.  I don't like the idea of the property being empty over winter.

I'm happy therefore to take less, get the certainty of a sale and be able to move on and employ my funds in alternative investments.  But I might be wrong.  Thoughts from the landlord brothers and sisters?

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1 comment:

Anonymous said...

Always - Always take the cash and run.