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HELP-advice about pulling out after exchange
markwelshwizard
Posts: 4 Newbie
Hello everyone,
I hope that someone can offer us a little guidance. Here's the problem:
We bought a new home, off plan in Feb 2008 from a small developer. We then exchanged contracts at the start of March. The house is due to be completed in a few weeks, but we have not been given a d yet.
My wife has recenty beed diagnosed with depresson, which has been linked to her job, and the fact that our baby was born 15 weeks early (she's doing well now).
MANY thanks, in advance, for your replies.
MARK
I hope that someone can offer us a little guidance. Here's the problem:
We bought a new home, off plan in Feb 2008 from a small developer. We then exchanged contracts at the start of March. The house is due to be completed in a few weeks, but we have not been given a d yet.
My wife has recenty beed diagnosed with depresson, which has been linked to her job, and the fact that our baby was born 15 weeks early (she's doing well now).
- What do people think will hapen if we are honest and tell the bank that we dont think we are in the best positon to have a mortgage?
- If we have to pull out of the purchase due to not having a mortgage, does that leave us open to being sued by the developer for breach of contract?
- Do people think the developer would just look to get their deposit paid or the full loss to them if they have to sell out house for less then we are supposed to pay?
- Has anyone been in a simular situation-what happened?
MANY thanks, in advance, for your replies.
MARK
0
Comments
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I have no experience in this field despite purchasing many properties so I can only guess that if you have paid a deposit you would have lost that as exchange has taken place....
With regard to telling the lender you're not in the safest position for a loan, as the small print always says, "your home is at risk if you do not keep up repayments..." so this is entirely your responsibility. Only you can work out if the risk is worth it. My Mum always says that if in doubt - don't.
Have you told your solicitor about your concerns about not completing (having already exchanged)? Find out how you'd be penalised before proceeding one way or the other.0 -
Hi Mark
As you have exchanged contracts you will lose your deposit if you pull out. However, if you need to pull out due to your change in circumstances there has probably never been a better time to do it as with house prices falling it's possible that you can afford to do this and buy later, for cheaper and recoup your loss that way. You need to be honest with yourselves and consider whether the pressure of your wife having to remain in work in order to pay the mortgage would be worth it. If you just plough on regardless you may regret it, if you tell the mortgage company, the decision might go out of your hands.I wouldnt tell the mortgage company anything until you have decided what the best way forward is for you.
As you havent been given a date for completion I would use this time to just consider your options carefully.
I hope things work out for you, whatever you decide.This ain't no technological breakdown..
Oh no, this is the road to hell.:(0 -
Not sure of the developer but I sued to be a Director of one! Over a long period we found a handful of people who approached us with differing stories about how they were not in a position to proceed - it happens.
We looked at every case carefully and in some detail. Where there was a death, serious illness, or serious accident between the exhange and completion we would let people off. Where is was less clear cut we would make a charge for us to resell and was the EA rate, at that time, 2% + Vat.
Where it was simply a case of their changing their mind I am afraid we took a much harder line. We said no and I can't recall anyone who never went through with it when we said no.
You need your GP on side and to argue the compassionate grounds as it always was the best way when I was making the decisions.A retired senior partner, in own agency, with 40 years experience in property sales & new build. In latter part of career specialising in commercial - mostly business sales.0 -
Thanks for the quick replies,
ljcpdc;
We have not spoken to our solicitor, we had to use them as part of the deal from the developer, so I don't think we will get fully inpartial advice as they will want more buisiness from the developer. We will try citizens advice first.
Frostyfeet;
You have hit the nail on the head. We need to work out which is the lesser of the two evils. Go ahead and have to tough it out in work OR pull out and have to deal with the concequences (which were not sure about).
Chickmug;
The GP is fully informed and understands what is going on. What do you think the developer would do if the mortgage offer was withdrawn. Is that our fault?0 -
Not sure of the developer but I sued to be a Director We said no and I can't recall anyone who never went through with it when we said no.
You simply just said no? Does that mean they are bound by law to follow the contract or risk imprisonment?
I suppose it's not that bad as they can just buy the house then instantly put it up for market and take a few £000 fine from their mortgage dealer for pulling out. Er then another £10-20k hit for prices dropping 10% since the price they originally agreed to buy at. Damn if I was in that position I'd flee the country but then I am a bit of a hardliner :rotfl:0 -
I suppose it's not that bad as they can just buy the house then instantly put it up for market and take a few £000 fine from their mortgage dealer for pulling out. Er then another £10-20k hit for prices dropping 10% since the price they originally agreed to buy at. Damn if I was in that position I'd flee the country but then I am a bit of a hardliner :rotfl:
I think chickmug means that the developer may say "if you don't complete, we will sue you for £XXXX". We were wondering if anyone had an idea what £XXXX might be;- A) 10% of the agreed house price
Any losses made when house is sold to someone else + interest built up over that time.- C) Cost of fixtures+fittings we picked
- D) All of the above
Are we right in thinking that we are liable if the mortgage co. withdraws their offer due to illness.0 -
They are less likely to be compassionate in this climate, think about it.markwelshwizard wrote: »How many people think that the developer would be compassionate to our problem in "the current climate"?
They are a small developer, so more than likely every penny counts.
If they have to remarket they might have to do so at maybe 30% less which will probably blow their profit margin out of the window.0 -
markwelshwizard wrote: »Thanks for the quick replies,
ljcpdc;
We have not spoken to our solicitor, we had to use them as part of the deal from the developer, so I don't think we will get fully inpartial advice as they will want more buisiness from the developer. We will try citizens advice first.
This should be made illegal!
The whole point of using a solicitor to buy a house is to make sure YOUR interests are looked after.
We should all write to our MPs about it. This is cropping up more and more as an issue and should be stopped. Perhaps Martin should talk about it on the telly?0 -
I have done this several times, I let them choose which solicitor they want to use, I just pay the bill.poppysarah wrote: »The whole point of using a solicitor to buy a house is to make sure YOUR interests are looked after.
It is a good way of getting a sale, does not matter to me as I have put more than the fees on the sale price.It is a win win :T0 -
I would seek out a solicitor specialising in contract law - there may be a way to wriggle out somehow, if that's what you really want to do.
I doubt you'd find much sympathy from the developer in this climate, though as a last resort you should ask them for 'mercy' (ie. there's no contractual get-out or leverage you can use).--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0
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