Home buyer's insurance?

[Gareth]

Is it possible to take out an insurance policy which will refund costs
(e.g. survey and conveyancing costs) in the event of a house purchase
falling though?

I have seen this discussed in a few forums but none of the links to seem
to exist anymore.

Thanks for any help.

Gareth
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[PeterSaxton]

Is it possible to take out an insurance policy which will refund costs
(e.g. survey and conveyancing costs) in the event of a house purchase
falling though?

I have seen this discussed in a few forums but none of the links to seem
to exist anymore.

Thanks for any help.

Gareth
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To reply to me directly:

Replace privacy.net with: totalise DOT co DOT uk and replace me with
gareth.harris

I wouldn't have thought it would be easy to get for two main reasons:

1. the insured would be able to ensure he gets a payout

2. it is so common that any premiums would be very high.

 

[Ronald Raygun]

Is it possible to take out an insurance policy which will refund costs
(e.g. survey and conveyancing costs) in the event of a house purchase
falling though?

It's pretty unnecessary.

1) You don't need to pay for a survey because the seller has already had
one carried out on your behalf. It all in the fancy newfangled HIP.

2) If the sale falls through, no conveyance has occurred, so there should
be no conveyancing costs.

3) There are only two basic reasons why a sale falls through. Either the
buyer doesn't want to go ahead, or the seller doesn't. Obviously the
former would be under your control, so it would be impossible to insure
against that. The best way to ensure the latter doesn't happen is to
make the contract binding at an early stage. That way you can sue the
seller if they pull out.

 

[Gareth]

I wouldn't have thought it would be easy to get for two main reasons:

So far, it doesn't seem to be easy to get.

1. the insured would be able to ensure he gets a payout

Isn't that true of almost any insurance? E.g. I could insure my
house/car then set fire to it? Anyway I wouldn't be able to profit from
the payout since it would only cover costs.

2. it is so common that any premiums would be very high.

Yes, that does seem likely.

Thanks for your reply.

Gareth.

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[Gareth]

It's pretty unnecessary.

1) You don't need to pay for a survey because the seller has already had
one carried out on your behalf. It all in the fancy newfangled HIP.

Unfortunately that isn't true (which I suppose is what you meant by the
smiley) and the bank insists on at least a basic valuation (at my
expense) before they will lend me the money.

2) If the sale falls through, no conveyance has occurred, so there should
be no conveyancing costs.

My solicitor may have done some work (e.g. searches etc.) before it
falls through which, not unreasonably, he will expect to be paid for.

3) There are only two basic reasons why a sale falls through. Either the
buyer doesn't want to go ahead, or the seller doesn't. Obviously the
former would be under your control, so it would be impossible to insure
against that.

It isn't entirely under my control, e.g. the bank could collapse and be
unable to give me a mortgage at the last minute.

The best way to ensure the latter doesn't happen is to
make the contract binding at an early stage. That way you can sue the
seller if they pull out.

That was basically my question. Can I draw up my own agreement which
will be effective between me paying out for the survey and the formal
exchange of contracts or do you mean I should exchange contracts as soon
as possible?

Thanks for your reply.

Gareth.


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[Gareth]

Unfortunately that isn't true (which I suppose is what you meant by the
smiley) and the bank insists on at least a basic valuation (at my
expense) before they will lend me the money.


My solicitor may have done some work (e.g. searches etc.) before it
falls through which, not unreasonably, he will expect to be paid for.


It isn't entirely under my control, e.g. the bank could collapse and be
unable to give me a mortgage at the last minute.


That was basically my question.

Sorry, that was my question in uk.legal not this thread.


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[PeterSaxton]

So far, it doesn't seem to be easy to get.


Isn't that true of almost any insurance?  E.g. I could insure my
house/car then set fire to it?  Anyway I wouldn't be able to profit from
the payout since it would only cover costs.

You wouldn't receive a payout if you set fire to your own house.

 

[Gareth]

You wouldn't receive a payout if you set fire to your own house.

Not if they found out that I did it deliberately, but I imagine that
home buyer's insurance would include a similar condition whereby the
policy wouldn't pay out if I did something to prevent the sale going ahead.


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[PeterSaxton]

Not if they found out that I did it deliberately, but I imagine that
home buyer's insurance would include a similar condition whereby the
policy wouldn't pay out if I did something to prevent the sale going ahead.

How would they be able to show who's fault it was the sale didn't go
ahead?

 

[Gareth]

How would they be able to show who's fault it was the sale didn't go
ahead?

What I'm looking for is an insurance policy which will pay out if I get
gazumped or if the vendor decides not to sell.

There may be grey areas as to who's fault it would be that the sale
didn't go though. However, car insurance seems to be possible despite
the difficulty in deciding who's fault an accident is when both parties
blame the other.

I can't see how deciding whether or not a claim on a home buyers
insurance policy is valid is fundamentally any more difficult than
deciding if any other claim is valid.

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[tim.....]

It's pretty unnecessary.

1) You don't need to pay for a survey because the seller has already had
one carried out on your behalf. It all in the fancy newfangled HIP.

No it's not, they abandoned that idea

tim

 

[robgraham]

There may be grey areas as to who's fault it would be that the sale

didn't go though. However, car insurance seems to be possible despite
the difficulty in deciding who's fault an accident is when both parties
blame the other.

It's not quite like that. To avoid expensive litigation insurance companies
often use a 'knock-for-knock' system where each pays their own client's
costs. However, if you feel strongly enough that it is the other's fault,
you can insist that that person's insurers pay out, rather than you lose
your NCB if your own insurer pays you. Often, when pressed that court action
is the next stage, that insurer will pay. However, they may not, in which
case it's up to you whether you take him to court and hope to find him
guilty, in which case his insurer will have to pay. But you may lose the
case, or have to pay some of it. Not a good result.

Rob Graham

 

[robgraham]

The best way to ensure the latter doesn't happen is to
Yes, and *they* can sue *you* if *you* decide to.

Rob Graham

 

[PeterSaxton]

What I'm looking for is an insurance policy which will pay out if I get
gazumped or if the vendor decides not to sell.

There may be grey areas as to who's fault it would be that the sale
didn't go though.  However, car insurance seems to be possible despite
the difficulty in deciding who's fault an accident is when both parties
blame the other.

I can't see how deciding whether or not a claim on a home buyers
insurance policy is valid is fundamentally any more difficult than
deciding if any other claim is valid.

With car driving there are rules of how to drive. If there is an
accident involving only two cars then somebody must be at fault. There
are no such rules on how to buy or sell a house.

 

[BartC]

What I'm looking for is an insurance policy which will pay out if I get
gazumped or if the vendor decides not to sell.

Have you tried Ladbrokes? Ask what odds you can get on you completing your
purchase. Bet enough to cover your costs if it goes wrong.

 

[Jonathan Bryce]

2) If the sale falls through, no conveyance has occurred, so there should
be no conveyancing costs.

There will be. The solicitor will bill you for the work they did up to the
sale falling through.

 

[Gareth]

Have you tried Ladbrokes? Ask what odds you can get on you completing your
purchase. Bet enough to cover your costs if it goes wrong.

Interesting idea.

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[Pete Verdon]

Ronald Raygun wrote:

There will be. The solicitor will bill you for the work they did up to the
sale falling through.

Mine would not have done - it's part of their normal terms for
conveyancing. They're a fairly large firm locally, so I guess they're
able to spread the costs of failed conveyances as a kind of
self-insurance - presumably they consider it a good incentive for people
to choose them.

Pete