# Sale agreed: When should Letter of consent from mrtg holder be provided?



## Birdhouse (11 May 2013)

At what point along the way to signing the Contract For Sale should the Seller provide my solicitor with the consent for sale?

I am the hopeful Buyer (1st-time buyer) of a house in negative equity (I have no idea by how much).  I have only just learned that the Seller has not obtained consent for the sale.


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## mf1 (11 May 2013)

It should be with the contracts when they issue from sellers solicitors to your solicitors.

mf


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## Birdhouse (12 May 2013)

Thank you, mf. I think I didn't provide enough information.

It's been months since the sale was agreed. There have been many delays.

From the outset, the Seller and his solicitor were very slow in providing the initial paperwork. Then there was some sloppy paperwork that my solicitor has had to get tidied up from when the Seller closed on his purchase of the property initially.

When the sale was agreed, I didn't know the Seller was in negative equity. He seemed to want a quick sale, but has only in the last couple of weeks apparently requested the consent to sell. I would have thought the Seller would have requested this at the outset, particularly if he wanted a quick sale.

My solicitor and I are not happy for me to sign a contract for sale unless I am assured that I will purchase the house free and clear of any mortgage or other encumberences. Seller's solicitor suggested at one point that I make the cheque payable to the mortgage company at closing. 

Seller's solicitor has sent us a few versions of the contract, but none have satisfied my solicitor in regards to the existing mortgage, and they have not included a copy of a consent letter nor indicated that consent has been sought or granted prior to last week. No news since then.

I have been patient with all the delays as the house ticks nearly all the boxes for me and the price is very good, and will allow me to be mortgage free. Being a first time buyer, I am not familiar with the process beyond the basics, so all these twists have caught me by surprise and I haven't understood what's what with them.

Before this week, I didn't even know about letters of consent per se. I learned that here on this forum. (THANK YOU!)

Thanks in advance for any thoughts or info.
Bird


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## Importer (12 May 2013)

This type of sale is what they call a "short sale" in the USA.

Short Sales are always fraught with difficulties between the bank and the mortgagee. 

The bank will want to be sure that the property is being sold for its full market value. If the price appears too low, this may slow things down. The bank may insist on its own independent valuation.

In some cases the bank may not consent to sell the house for less than the mortgage value. If the negative equity is large, agreeing to sell the house turns a secured borrowing into an unsecured borrowing and this sparks off a discussion between the mortgagor and mortgaee as to how the shortfall will be repaid.

Expect long delays. This will not happen fast


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## Birdhouse (12 May 2013)

Thank you very much, Importer.

This has become fairly evident. We are many months into the sale agreed stage, and from what I gather, the Seller has only just requested consent to sell from the mortgage holder.  So nothing will be happening soon.

I am looking at other properties now.  No contract = no obligation on my part.  This will turn out to be a very expensive lesson.  I will proceed with a jaundiced eye!

Thanks again for your frank reply.
Bird


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