Sticky Situation: selling on contract....advice needed please?

[brady72]

Hi, i am new to this site and think it's great. I recently posted a plea for help under mortgages and home buying but after searching the site found some relevent information on this forum, so am now re-posting in hope of some help and advice!

I am a FTB in the process of purchasing a new home, as an owner-occupier, that i am now no longer in a position to proceed with. I have gone sale agreed, signed the contract and paid over the deposits. The house is now at the snagging stage.

I was initially thinking that i'd just pull out and lose my deposit, but my solicitor has told me that i may be sued by the developer for damages and losses incurred by my pulling out. (also, i don't like idea of backing out of a deal - but also, am not in position to proceed and live in the house) With this in mind i am now trying to explore my options, hoping to minimise my own financial losses, and ideally, if possible maintain my FTB status.

From searching around this website i saw some information on Flipping and this looks like it may be a good option for me. I would however, just be looking to sell on my "contract to purchase" as such to someone else, and recoup my deposit from them - not to make a profit as such. Does anyone know how i go about doing this? I don't think that my contract specifically allows for this practice, but i'm not sure if precludes it either. I asked my solicitor about this option, but didn't get any indication that it was an option, and was advised that i probably should just go through with the sale. How do i therefore look into pursuing this option? - do i need to contact the developer directly myself?? Can i maintain my ftb status and benefits if i proceed with this option? What are the first steps, in pursuing this - i am under some time pressure now, as property is nearly ready.

Other options are to complete the sale and sell it straight away - however this involves drawing down my mortgage, paying fees and losing my FTB status for sure, as well as CGT and possibly other Tax implications.

Or, i could complete the sale and rent out the property, however i'm sure this will have plenty of tax etc impliciations too as i commenced this process with the intention of being an owner-occupier. Also, the rental income i would most likely secure (assuming i can successfully rent it out) would not fully cover the mortgage repayments, so this i would be supplementing myself..... I would however not be immediately in a position to decorate and furnish the property to a rental market standard, which adds to the complications.

Would appreciate any advice or experience from anyone who might be able to help.....think i've gotten into a bit of a mess here!

Thanks in advance....

 

[Luternau]

There is a way you can sell a property on without having to advise the builder- What it means is that yougo through with the transaction but there is a third party that your are immedialtely selling to. Thier name etc, will appear on the lease. I have not done this but according to my solicitior it is possible-ask your solicitor about this. You dont have much time to find a buyer though!

You could also go through with sale, and put on the market immediately. I would recomend that you get all sevice accounts set up, and that you sonsider putting down some cheap flooring-either laminate or carpet. It will make the place maore attractive to potential buyers. If money is tight , try to establish the market price for similar properties in the estate or area, set your price and sell it your self. The money saved will pay for the flooring!! As it ws your PPR no CGT will apply.

As you state you are in a bit of a mess so closing the sale looks like the most likely solution to your problems. How much of a difference is there in the sale price and current value?