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Buyer pulling out on completion day?

Hi All,

Hoping for a bit advice from you knowledgeable people. I'm currently becoming more and more stressed out over the sale of my grandparent’s house, which was inherited by my father, after they recently passed away.

We’ve had issues with the buyer consistently throughout the process of selling the house. Initially, with exchange being put off time after time for varying reasons. It appears that his solicitor is a friend of the buyer and it is incredibly difficult getting information out of him. In fact when our solicitor questioned him as to why he couldn’t exchange the answer we got back was “because he couldn’t”. We told our solicitor that this was not good enough and we’d just like a reason, so we are able to comprehend what was going on. But no further details were given as to why.

To cut a long story short exchange occurred a month ago with a completion date set for 7th May, which was last Friday. As you’ve probably guessed completion didn’t happen. When our solicitor enquired as to why, the buyers solicitor said “because he can’t”, and that was all the information offered.

Now our solicitor has said we can charge interest of £40 a day, and he has got to complete within ten days. But I have more questions than answers here; this is due in part to his solicitor’s stance of not being too forthcoming with information.

Please would someone be kind enough to explain where we stand and what we can do? We obviously want this sale to go through, and are fed up with being messed around? Can we sue him for the remaining amount? Can we force him to complete? Any advice would be HUGELY appreciated.

The buyer doesn’t have a house to sell and is putting down 40 or 50 % cash deposit, if that helps.

Thanks
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Comments

  • RacyRed
    RacyRed Posts: 4,930
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    What a nightmare! I don't have the answers but wanted to commiserate.
    My first reply was witty and intellectual but I lost it so you got this one instead :D
    Proud to be a chic shopper
    :cool:
  • astreix
    astreix Posts: 237
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    Have a look at this (rather long) thread.

    http://forums.moneysavingexpert.com/showthread.php?t=1806123
  • Doozergirl
    Doozergirl Posts: 33,784
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    edited 9 May 2010 at 10:54PM
    As soon as they breach contract, you are absolutely legally entitled to charge the interest on the full value of the property (it's actually quite lucrative)

    When they do eventually complete they will have to pay the agreed price plus all the interest due between the 7th and actual completion.

    It had never happened to me but it's happened twice in the last six months. We had a buyer who was short on the purchase price. He was a nightmare, like yours, and I think he actually tried to gazunder us but didn't realise the implications of exchanging upon that idea. He had to put the balance on a credit card!

    And we missed completion by a day on a purchase because the mortgage deed went missing between our solicitor and the bank.

    Either way, this is your buyer, you have a !0% deposit in the bank and it's yours. Thankfully, you aren't relying on this sale to move you on but whilst this may be a bit of a mightmare, I'd be incredibly surprised if your buyer doesn't manage completion within that 10 days. I'd be beggin borrowing and stealing not to lose my deposit.

    Keep calm, trust your solicitor and it will come good in the end. When I realise how much interest we were earning from our dodgy buyer, I was quite happy to wait :o

    Seriously, they can't 'pull out' after exchange, not without serious financial repurcussions in your favour.
    Everything that is supposed to be in heaven is already here on earth.
  • franklee
    franklee Posts: 3,867
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    edited 9 May 2010 at 11:01PM
    Your solicitor serves (or likely has just served) a ten days notice complete to the buyer's solicitor and that should make them get their finger out or risk you sue. Meanwhile you can charge interest at the contract rate, wot the contract says, typically 4% above the Bank of England base rate, accruing daily, e.g. (purchase price – deposit already paid) / 100 * (base rate + 4) / 365.

    You'll know more where you stand if the completion doesn't happen in ten days.
  • centerhalf
    centerhalf Posts: 14 Forumite
    Thank you for all your help and support guys.

    I have read through the link that was kindly provided by astreix and that has helped majorly as well. I do hope that "Seriously, they can't 'pull out' after exchange, not without serious financial repurcussions in your favour." (thanks Doozergirl) is the case.

    As an update our EA has spoken to the buyer directly (had to do so using a witheld number btw otherwise he didnt pick up the phone :mad:), and he said that he hopes to complete by the end of the week (is he so stupid that he dowsnt realise the ramifications of "hoping" and the delay). Apparantly he needs to provide proof of earning to the taxman and that has been the reason for the hold up.

    I dont quite understand this as an excuse, surely any earnings // affordability checks would have been done by his lender prior to exchange. My understanding is that any solicitor worth their salt will not let you exchange without having assurances over the funds being in place. My mind is all over the place at the moment.

    I have a few more questions related if anybody can shed any light on them. From reading the long thread provided by astreix, i understand costs can be claimed related to this? My sister has entered in to the early stages of a house purchase as part of the proceeds from this house were going to assist her with a depoist. Since exchange had taken place and we thought we were ok, she has payed costs for mortgage fees and solicitors in relation to her new house. If our buyer pulls out, will she be able to claim these costs back, as her house purchase cannot go through without the sale of this property.

    Thanks again guys
  • delmar39
    delmar39 Posts: 1,447 Forumite
    centerhalf wrote: »
    Thank you for all your help and support guys.

    I have read through the link that was kindly provided by astreix and that has helped majorly as well. I do hope that "Seriously, they can't 'pull out' after exchange, not without serious financial repurcussions in your favour." (thanks Doozergirl) is the case.

    As an update our EA has spoken to the buyer directly (had to do so using a witheld number btw otherwise he didnt pick up the phone :mad:), and he said that he hopes to complete by the end of the week (is he so stupid that he dowsnt realise the ramifications of "hoping" and the delay). Apparantly he needs to provide proof of earning to the taxman and that has been the reason for the hold up.

    I dont quite understand this as an excuse, surely any earnings // affordability checks would have been done by his lender prior to exchange. My understanding is that any solicitor worth their salt will not let you exchange without having assurances over the funds being in place. My mind is all over the place at the moment.

    I have a few more questions related if anybody can shed any light on them. From reading the long thread provided by astreix, i understand costs can be claimed related to this? My sister has entered in to the early stages of a house purchase as part of the proceeds from this house were going to assist her with a depoist. Since exchange had taken place and we thought we were ok, she has payed costs for mortgage fees and solicitors in relation to her new house. If our buyer pulls out, will she be able to claim these costs back, as her house purchase cannot go through without the sale of this property.

    Thanks again guys

    Your solicitor should be advising you in relation to all of the above. Because you have exchanged and as stated above, they are in breach of contract. People used to tell me to go to my solicitor when I posted things like this whilst going through the buying and selling process and whilst you're probably just looking for some informal feedback on the best thing to do, this is serious stuff and you're solicitor should be going through the fine details with you. Bottom line is they've exchanged contracts and therefore cannot pull out without severe penalities being impossed. Give your solicitor a call.
  • maninthestreet
    maninthestreet Posts: 16,127
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    Why is the HMRC involved here? How will providing proof of income to HRMC allow completion to take place? The most likely reason for a buyer missing completion is lack of funds.
    "You were only supposed to blow the bl**dy doors off!!"
  • centerhalf
    centerhalf Posts: 14 Forumite
    Why is the HMRC involved here? How will providing proof of income to HRMC allow completion to take place? The most likely reason for a buyer missing completion is lack of funds.

    Exactly what i thought. Having spoke to solicitor it appears that you are correct and that its a shortfall in his funds for the reason behind failed completion. Mortgage is all in place so its just his own funds that he needs to get sorted. I keep asking the question surely he must have known his financial position on Thursday of last week and could of put the difference on a credit card, or beg borrowed or stole it etc. He assures us that he will complete on Friday, although he will need to find even more money now to pay interest fees and any excess charges our solicitor makes because of him failing to complete on the agreed date. Why are somne people so stupid.

    I think this one is going to rumble on, he's been a pain in the backside from the begining :mad: I just hope by Friday all has been sorted :j
  • zappahey
    zappahey Posts: 2,252
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    centerhalf wrote: »
    My sister has entered in to the early stages of a house purchase as part of the proceeds from this house were going to assist her with a depoist. Since exchange had taken place and we thought we were ok, she has payed costs for mortgage fees and solicitors in relation to her new house. If our buyer pulls out, will she be able to claim these costs back, as her house purchase cannot go through without the sale of this property.

    Assuming that your father currently owns the house, and your sister does not have any ownership interest, then the buyer has no obligation to her.
    What goes around - comes around
  • centerhalf
    centerhalf Posts: 14 Forumite
    Sorry zappahey, i should have explained everything in more detail, although i was concerned people would be asleep by the length of the post.

    The will stated that the estate is to be split three ways between my Father, Sister and myself. So i am assuming that we each have a 33.3% share of ownership in the property. The reason for my post stating it was just my Father, is because he is the one who is dealing with the solicitors, EA's etc in the selling process. Although i am obviously giving him support throughout the process as it is becoming more and more stressful, and also my father has not moved house for thirty years, where as i moved a few years ago, so have a bit more idea about the "general" buying / selling mine field that you have to go through.

    Thanks
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