Non payment from house sale

46 posts in this topic

5 minutes ago, snowingagain said:

 

Significant experience in Gemany?

You could say that.

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15 hours ago, black1 said:

Other options are to rent out the old house immediately with possibly a defined period with possible option to continue

That seems risky to me as you don´t know how long that period would have to be. If the buyer pays and wants to take possession you´ll be obligated to hand it over without a sitting tenant. And if the whole transaction is cancelled you´ll be sitting with a tenanted house which probably will be much more difficult to sell. In that case you could count yourself lucky if you only have to fight a court battle over how to determine the damage you can claim compensation for (IF the buyer isn´t bankrupt by then in which case you couldn´t even get damage compensation). I still think if all else fails and you can´t service both mortgages defaulting on the mortgage for the old house is what I´d do.

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5 hours ago, jeba said:

I still think if all else fails and you can´t service both mortgages defaulting on the mortgage for the old house is what I´d do.

This should be the very last option after all other possibilities have been exhausted. I cannot stress this enough. I don't have time to go into the details, but here is why I think it's a bad idea:

1) This option is too radical for a problem that is transitory (a few months in my estimate) and it will severely limit the OP's future financial options. OP just need to a find a way to hang in there for a few months. Why ruin the future for a few months?

2) given OP's stage in life (retirement was mentioned), access to credit is essential in case of: an expensive surgery that is not covered by insurance, house repairs (new roofs are expensive), etc. At the risk of sounding morbid, I'll stop listing all the ways life can go wrong.

2) More importantly, there are other options that achieve a similar if not better result: talk and explain situation to banks in order restructure the loan; get a small loan collateralized by the old house to cover mortgage payments until house is sold (OP said she planed to use the proceeds to buy new house mortgage free, so this means old house has little debt and should be super easy to put additional debt on it); etc.

 

 

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Of course, other options should be exhausted first. Hence I wrote "if all else fails".

 

To be honest I don´t think you´re very familiar with how things are working in Germany. E. g. deposits aren´t a common concept when buying property - so I doubt there was one agreed on. Also, the risk that you need emergency funding for expensive surgery not covered by insurance sounds outlandish in German ears. Same with the importance of credit scores. For most pensioners that´s a non-issue in the fatherland.

 

 

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41 minutes ago, jeba said:

Of course, other options should be exhausted first. Hence I wrote "if all else fails".

 

To be honest I don´t think you´re very familiar with how things are working in Germany. E. g. deposits aren´t a common concept when buying property - so I doubt there was one agreed on. Also, the risk that you need emergency funding for expensive surgery not covered by insurance sounds outlandish in German ears. Same with the importance of credit scores. For most pensioners that´s a non-issue in the fatherland.

 

 

FFS, jeba - learn to quit when you're behind. You already advised the guy to stop making payments on the mortgage, which is the worst possible thing he could do. And now you're accusing others of not being familiar with how things work in Germany - as the poster child for not being familiar with how things work in Germany.

 

For once in your life, if you don't have a clue, just shut the hell up already. This is their livelihood at stake.

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11 hours ago, El Jeffo said:

FFS, jeba - learn to quit when you're behind. You already advised the guy to stop making payments on the mortgage, which is the worst possible thing he could do. And now you're accusing others of not being familiar with how things work in Germany - as the poster child for not being familiar with how things work in Germany.

 

For once in your life, if you don't have a clue, just shut the hell up already. This is their livelihood at stake.

Couldn't agree more. Defaulting on a mortgage whichever country you're in isn't a good idea. There are surely better options than that. 

 

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13 hours ago, El Jeffo said:

You already advised the guy to stop making payments on the mortgage, which is the worst possible thing he could do

What part of

On 12/6/2019, 4:17:15, Henribear said:

The bottom line is that we cant afford 2 mortgages.

did you not understand?

 

Or of this:

21 hours ago, jeba said:

if all else fails and you can´t service both mortgages

 

Of course, defaulting on a mortgage is something you should avoid and other avenues should be explored first. But IF those lead nowhere in this case it seems the lesser evil to me compared to this:

On 12/5/2019, 10:33:02, Henribear said:

we will be forced to put our home up for sale. 

 

 

13 hours ago, El Jeffo said:

And now you're accusing others of not being familiar with how things work in Germany

Do you think a German resident needs to be worried about their credit score because of German health insurance (which is mandatory to have) not covering expensive surgery? Do you think it´s common to pay a deposit for the purchase of a family home in Germany? Are considerations like these (which might be valid e. g. in the US) making you think that HenryM  is familiar with the German legal system?

 

 

 

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We are all trying to help the OP, and the consensus seems that default is the worst option.

 

Jeba, I understand your passion to help and indeed default is an option, but I assume it probably is to the OP the one obvious option. So perhaps highlight a bit less and consider other ideas. I already suggested one.

 

On 12/8/2019, 5:34:11, jeba said:

 

On 12/7/2019, 4:00:19, El Jeffo said:

You already advised the guy to stop making payments on the mortgage, which is the worst possible thing he could do

What part of

On 12/6/2019, 3:17:15, Henribear said:

The bottom line is that we cant afford 2 mortgages.

did you not understand?

 

Correct, but continuously defending what I think should be the atomic-solution is drowning out the other ideas. Namely:

1) mortgaging old house

2) renting hold house

3) etc...

 

On 12/8/2019, 5:34:11, jeba said:

Do you think it´s common to pay a deposit for the purchase of a family home in Germany?

You're correct. I didn't know how common or uncommon this is for private individuals. However, in this instance the buyer has an advantageous contingency in the contract and on top of that has been granted extensions to closing date. Basically, the buyer has locked the property out of the market while he waits his approvals and now wants another extension. Seems like a great deal for buyer, unless the OP got some compensation - deposit that gets forfeited if not closed in order to be compensated for keeping property out of market. This applies irrespective of the country.

 

 

On 12/7/2019, 3:24:50, jeba said:

Same with the importance of credit scores.

Germany does have a credit score system -- SCHUFA. Although perhaps not as intrusive as the US system, but if my utility bills go on it, then I would assume so does default.

 

 

On 12/7/2019, 3:24:50, jeba said:

the risk that you need emergency funding for expensive surgery not covered by insurance sounds outlandish in German ears.

I think it makes sense to give yourself the option of having credit in case of unseen circumstances. Medical was just one example, even if not 100% applicable (btw, certain cancer treatments are not covered by insurance).

 

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Every home owner that I know in Germany saved up a hefty down payment before buying except for the ones who inherited homes.

 

 

 

 

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I don't think that down payment is treated as a purchase deposit, though - it gets paid along with the loan payout to the seller at closing.  It makes you a more attractive borrower is all (AFAIK).  

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2 hours ago, fraufruit said:

Every home owner that I know in Germany saved up a hefty down payment before buying except for the ones who inherited homes.

True, but that has nothing to do with whether or not a deposit is paid though.

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In order to pay a deposit to secure the property until one can sort out a loan, a hefty deposit might help.

 

Although I do see where I might be mixing the two up.

 

Better chance of getting a loan with a good down payment as well. Not so much risk for the bank and a better mortgage rate perhaps.

 

Thanks, lisa13 and jeba.

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2 hours ago, HenryM said:

Correct, but continuously defending what I think should be the atomic-solution is drowning out the other ideas.

I think I made it clear that failing on a mortgage should be the last option only, assuming that other roads have been explored unsuccessfully. It´s better though from what I gather than to move out of the newly purchased house and start renting again (as seemingly considered by the OP). That was the point I was trying to make.

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Buyer has not paid again. His excuse is that he thought he needed a new letter with a new payment date. Notary is losing patience with lies and excuses and told him he didn't need a new letter and to pay tomorrow.  We should see payment by Wednesday lunchtime.  If it is not there we go through our lawyer. 

Meanwhile we are paying all house payments for 2 houses. Just before xmas with 5 family members arriving in 2 weeks, this is no joke. We dont sleep and are both now ill. 

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5 hours ago, Henribear said:

Buyer has not paid again. His excuse is that he thought he needed a new letter with a new payment date. Notary is losing patience with lies and excuses and told him he didn't need a new letter and to pay tomorrow.  We should see payment by Wednesday lunchtime.  If it is not there we go through our lawyer. 

Meanwhile we are paying all house payments for 2 houses. Just before xmas with 5 family members arriving in 2 weeks, this is no joke. We dont sleep and are both now ill. 

Lawyer up and get interest on all the money you are missing out on and gave had to pay out so far. I'd be surprised if you aren't allowed to claim this back knowing what Germans are like. 

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15 hours ago, Henribear said:

Buyer has not paid again. His excuse is that he thought he needed a new letter with a new payment date. Notary is losing patience with lies and excuses and told him he didn't need a new letter and to pay tomorrow.  We should see payment by Wednesday lunchtime.  If it is not there we go through our lawyer. 

Meanwhile we are paying all house payments for 2 houses. Just before xmas with 5 family members arriving in 2 weeks, this is no joke. We dont sleep and are both now ill. 

 

Talk to your bank and tell them about the situation ASAP! They might be able to help you with a short-term consumer loan or even just increase your overdraft until the payment finally comes through. 

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3 hours ago, El Jeffo said:

 

Talk to your bank and tell them about the situation ASAP! They might be able to help you with a short-term consumer loan or even just increase your overdraft until the payment finally comes through. 

 

This makes sense. I've negotiated with banks myself, they can do quite a bit to bridge a bad situation. Approaching them before defaulting on payments is key here!

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3 hours ago, El Jeffo said:

 

Talk to your bank and tell them about the situation ASAP! They might be able to help you with a short-term consumer loan or even just increase your overdraft until the payment finally comes through. 

This. To the bank, you are their customer. They want you to pay back the entire loan in due time so it is in their best interest to help you. Of course you will have to pay for the service, but you should get that money back from the buyer. 

 

Just out of curiosity: Did you have everything set up so that buying the new and selling the old house would happen at exactly the same time? I think that is quite unusual in Germany. We went from renting to buying and had 2 1/2 months overlap. I had actually budgeted for 3 or 4, just to be on the safe side. Our purchase was staggered. The chain of participants I knew about started in March (hand-over of house 1) with us finishing it in September (hand-over of house 4) 

I will keep my fingers crossed for you tomorrow. Maybe get your lawyer to start calculating how much the guy owes you on top already and get the notary to check it. Then, after the big chunk has arrived, present the bill and give him 10 days to pay it. 

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Bank are aware and helpful.  Notary contacted buyer and asked why he has still not paid. The buyer said he was waiting for new instructions because he didn't pay with the last letter.  Notary told him to pay now. Today we see if he has..if not we are in with our lawyer.  This buyer is just a lying b.... who is playing games 

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