Buying in France, House Fallen Through in UK

[roxycampbell]

Hello, this is my first post and I hope some of you may be able to offer me some advice, I desperately need it!

Earlier this year I decided I wanted to move to France, lock, stock so to speak after a long period of research and reflection.  So I did the whole "House Doctor" bit on my house in the UK, put it on the market, had an offer within two weeks and started the process of finding a house in France.

Anyway, I found the perfect house, put an offer in, which was accepted.

By this time I was a week away from exchanging on my house in England after three months of backwards and forwards to the various solicitors.  As you can imagine I thought it it was a done deal, so I signed the compromis de vente with a completion date of September.

But, and this is a big but, my buyer pulled out at the very last minute apparently because he couldn't afford the house in the first place!  Literally on the day of exchange.

The vendor in France was understandably upset but, agreed to give me another three months grace on the compromis.

This is where it gets tricky, I have only ONE month before my extra time is up.

What on earth do I do?

My house in the UK is still unsold.

I have paid the deposit on the house in France.

The only good thing (perhaps?) is that the vendor isn't buying somewhere else, they are going to build a new house on some land they have had for a very long time.  Which isn't really that good because it means they can't begin building until I give them the money for their house which I can't until my house in England is sold.

I honestly just don't know what to do.  They have said to me that they cannot wait past the New Year already.

One other thing, I never received (from the estate agent) was a copy of the compromis signed by both of us.  Does this make any difference to my situation?  Though I really don't want to go down that road even if it does.

Any advice would be gratefully received!  Though I'm sure I may get a bit of an ear-bashing too for being so naïve/stupid.

Thank you in advance.

Roxy

[Iceni]

Condition yourself to the likelihood of waving goodbye to your deposit.

Make a note to learn from yr experience.

John

not

[Ron Avery]

Assuming that you were going to pay off your mortgage and buy your French house from the sale of your UK house, you could ask for a bridging loan from your lender.

 Or go to your lender, bank or building society and get an equity release or top up mortgage for home improvements, renovations, etc etc. If you can afford he repayments.   I would not tell them it is to pay for a house in France unless you are pushed, they may not want to let you have the advance if they know it is only for a short period. 

Hopefully your UK house will be sold quickly and you can then pay the whole lot off in one go

[Hegs]

Drop the price of the UK house by (up to) the amount of the deposit on the French property, in exchange for a quick exchange. You have nothing to lose.

[Briank]

I was under the impression that you had to receive the compromis by post recommandé and then you had seven days cooling off period. If you didn't receive your compromis like this or handed to you directly by the agent I can't see that it is valid. Is this information correct?

Jan & Brian

[Ejc]

Hi,

You are in exactly the same position we were in 2 years ago - we tried dropping the price of our house, we applied for bridging - then realised that we were on a hiding to nothing and could end up seriously in trouble. We ended up losing our deposit and the house - it was awful we felt we were letting everyone down because in the UK - until you have exchanged contracts nothing is final and buyers will walk away at the last minute.

We took our house off the market for six months - then put it back on (for more than previously) sold it very quickly to a first time buyer - and the next time we went to France looking - our house was sold and we were in a rented place & had the cash in the bank. We feel the house we now have in France was a better deal than the first one we had set our hearts on and are looking forward to spending more and more time over there.

You may have a ray of hope if you didn't receive the compromis - but should probably have raised this issue before. It may be that your vendor will have no option but to put the house back on the market - and then you'll be in a race - if you can sell and complete - you may still get the house and save your deposit - but if you cannot sign the acte and pay the balance they are entitled to take your deposit.

Did you add in any suspensive clauses to the compromis about completing your sale in England? We had a clause about a mortgage but not about the completion of our sale, and I know that many notaires won't insert this type of clause because it is almost a get out of jail free card for English vendors. The compromis is a binding contract we enter into freely - and after the 7 days if we can't complete no matter why - we lose our deposit......

Good Luck

 

[Ron Avery]

I know that you don't want to try and get out of this on a technicality but I don't think there is any ray of hope unless you did not sign the compromis and/or if it was changed after you signed it.

As EJC has hinted you were poorly advised by your Agent, you really should have had a clause about the sale being dependent on your UK house sale, its not up to the Agent if this goes in or not, its up to the Notaire and for the other party to agree or not.

But anyway, as you have gone back to the vendor and asked for extra time to complete the sale,  you can hardly now claim you did not know what you were buying could you?

If you really want this house you must get finance, so get on to your mortgage lender and arrange an equity release.

[Georgina]

When we bought our house, we arranged an interest only mortgage on top of our mortgage. As it was interest only it was reasonable as the mortgage on the house was well affordable.  We did not think we would sell our house quickly and therefore did not wish to risk losing the France purchase, when we saw what we wanted.  As luck would have it, we sold in two hours but we could never have predicted that. We then had to move into rented accommodation to get the house sorted in France.   We found many lenders willing to give us the extra mortgage and some did not even want to know what it was for as long as you have the equity on your house. 

Don't give up, if you have the equity in your present house, you could get an interest only loan, for which repayments are much lower, but you have to then consider how interest rates will affect you until you sell.

I would definitely say it is not worth risking the two working together, that would be like betting on the horses in my mind, having worked for a solicitors in England and knowing the things that can and do go wrong, the system is so fragile. Georgina

[Blackadder<IMG src="http:forums.livingfrance.comimagesline.gif"><BR>Blackadder<BR>Keighley and Creuse]

A bit difficult to advise without the details of amounts involved, but I am not asking for those figures! Will it be a real knock losing the deposit? If so, work out how much its going to cost getting an advance on your existing mortgage, take the house off the market for 3 or 4 months over winter, tell the building society you have had a change of plan etc to secure said advance and in March when Daffodils are flowering, saps rising etc, put house back on market having now bought French pad.

If its not a huge amount,,,ours was £1,900 as it was a £19k barn, so wouldn't have broken the bank, i would lose deposit and take house off market for a few months as above.

All IMHO

[sophie.b]

Firstly, if you never received a copy of the compromis that was signed by both of you then I would imagine you never received an SRU letter for your seven day cooling-off period.  Therefore, this technicality may allow you to get out of the sale without losing your deposit - check with the notaire.

Secondly, French bridging loans (pret relais) are much better than those offered in the UK.  If you can prove you have your house on the market, you can get up to 70% of the price that your house is for sale at (and more if you can prove you have a buyer!).  I have one and the interest rate is only about 4%.  You can either pay the interest only each month (for the 20.000 euros I borrowed the payments are only 90 euros a month) and then the capital back when you sell your house - in this case you have two years to sell your house.  The other option, which only gives you a year to sell your house means that you pay nothing monthly, the interest compounds and you pay the principal and the interest (still only about 4-5%) back in one hit when you sell your house.  Even if you don't manage to sell you house before the bridging loan expires (fingers crossed you do though!!) most French banks will turn a bridging loan into a straight mortgage without too much of a fuss.

I wouldn't walk away and give up your deposit without at least looking into these options.

[P]

Would agree with Hegs about dropping the price.

We were looking (in the UK) fo another house with ours on the market and we did not have many viewers, although one or two sounded interested nothing came of it.

Then we found th house that fitted the bill but we needed a buyer for our house. Spoke to our estate agents and asked 'what do we need to do to sell quickly'. The answer was to drop by £10k. This was on a Wednesday afternoon. Agreed to it and the estate agents went into overdrive. By Saturday it was sold. Admittedly, the buyers had just been let down on a property and did not want to break the chain (so thy may have paid the original price, who knows).

You have nothing to lose in talking to your estate agents. The other option mentioned of a bridging loan might be another option - extra expense but losing your deposit will also be an expense.

Does sound a little unfair if you try to wriggle out of this on a technicality - will give the Brits a bad name and make French sllers and Immobiliers wary.

[Peri Winkle]

  We are in the process of selling a lovely barn, here in France, at a reduced amount for a quick sale, because of capital gains for this year and next .  There have been several delays due to the incompetance of the agency selling, and only us keeping contact with the notaire is keeping the deal on track.  Good luck.

[Sweetpea]

I Agree with Sophie B!

You have obviously fallen in love with this house, so why not go all out to 'save' it?

I know of an English chap who does Mortgages over here in France; he may be able to help; I'll email you his address if you like.

I always say that if your name is on a house, you'll get it, so best of luck!!

 

[roxycampbell]

Thank you so much for all your replies.

I have a lot to consider!

I spoke to the vendor yesterday (mainly because I hadn't slept a wink the night before with worry), I thought honesty is the best policy and if it were me I would rather know what was going on!

They have said they will give me a little more time, not sure how much, but at least it gives me a little more breathing space to decide what I can do.

Will keep you posted!

Thank you again

Roxy.

 

[Stocky]

If you can get a French Bridging loan then that will help with the purchase, seconf stage is to o to your mortgage supplier and asked for a payment holiday.  Due to delays in the sale of our house in the UK we have managed to get a 6 month holiday, cost is only the interest each month.

[Stocky]

If you can get a French Bridging loan then that will help with the purchase, seconf stage is to o to your mortgage supplier and asked for a payment holiday.  Due to delays in the sale of our house in the UK we have managed to get a 6 month holiday, cost is only the interest each month.

[Renaud]

Stocky's advice is good the cost of having the bridging loan would be less than a lost deposit.