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Buyer pulling out on completion day?
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# 1
centerhalf
Old 09-05-2010, 8:02 PM
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Default 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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# 2
RacyRed
Old 09-05-2010, 8:08 PM
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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
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# 3
astreix
Old 09-05-2010, 9:16 PM
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Have a look at this (rather long) thread.

http://forums.moneysavingexpert.com/....php?t=1806123
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# 4
Doozergirl
Old 09-05-2010, 10:51 PM
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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

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.

Last edited by Doozergirl; 09-05-2010 at 10:54 PM.
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# 5
franklee
Old 09-05-2010, 10:57 PM
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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.
Tenants, Do you think you'll be given two months notice? Well maybe it's already served! Often a section 21 notice requiring possession is served shortly after the tenancy starts. You may have the impression it doesn't matter - but it does, so check the paperwork for an S21. For more information search this forum for Sword of Damocles.

Last edited by franklee; 09-05-2010 at 11:01 PM.
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# 6
centerhalf
Old 10-05-2010, 1:19 PM
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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 ), 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
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# 7
delmar39
Old 10-05-2010, 1:48 PM
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Quote:
Originally Posted by centerhalf View Post
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 ), 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.

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# 8
maninthestreet
Old 10-05-2010, 3:44 PM
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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!!"
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# 9
centerhalf
Old 10-05-2010, 6:24 PM
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Quote:
Originally Posted by maninthestreet View Post
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 I just hope by Friday all has been sorted
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# 10
zappahey
Old 10-05-2010, 7:44 PM
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Quote:
Originally Posted by centerhalf View Post
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
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# 11
centerhalf
Old 10-05-2010, 7:58 PM
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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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# 12
timmyt
Old 10-05-2010, 9:56 PM
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Quote:
Originally Posted by centerhalf View Post
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
your lawyer should serve a notice to complete, which gives 10 working days I think...after that time you can forfeit his deposit, and sue for your losses, including for any loss in selling for less, and all fees for re-selling. nightmare for the buyer, so speak to your lawyer - i hope you did not go cheap and use a conveyancer who has no lawyers in the building to advise on this as it is no longer a proeprty issue for you need a lawyer to sue potentially
My posts are just my opinions and are not offered as legal advice - though I consider them darn fine opinions none the less.

My bad spelling...well I rush type these opinions on my own time, so sorry, but they are free.
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# 13
qball101
Old 11-05-2010, 1:11 AM
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I'd speak to your solicitor but surely you could take the deposit and remarket the property? If so, I would suggest that the threat of that would be enough to make your buyer complete asap.

Out of interest, does anyone know what happens if the roles are reversed and the seller exchanges and doesn't complete?

Last edited by qball101; 11-05-2010 at 1:14 AM.
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# 14
Fire Fox
Old 11-05-2010, 1:32 AM
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Read the thread linked to in post 3!
What a difference a day makes, twenty four little hours.
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# 15
Doozergirl
Old 16-05-2010, 10:46 AM
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How is this going OP? Did he complete on Friday?
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# 16
Chinkle
Old 16-05-2010, 12:31 PM
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Be reassured, you buyer is in serious breach of contract and the costs of this will be quite severe. The problem may be recovering these from him if indeed he is now struggling to find even the agreed purchase funds. But you can come to that later - the first thing you need to ensure is that your solicitor knows his stuff in terms of pursuing fulfilment of the contractual obligations.

Is his solicitor a proper professional, I can't believe even if he is a friend he would have advised the buyer so poorly on this matter.

Sounds like this could turn into a long thread. Do keep us updated OP, it is always fascinating when people seemingly unknowingly get themselves into this kind of deep mud!
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# 17
centerhalf
Old 16-05-2010, 2:31 PM
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Hi All,

Unfortunatley there was no completion on Friday of last week, but we were informed by our buyers solicitor that they expect to complete towards the end of this coming week.

So at the moment we are playing the waiting game and there is nothing really we can do until next week.

There has been many twists and turns throughout this process with the buyer being awkward and not to forthcoming with information. We agreed to sell the property att a figure considerably below asking price as we wanted a quick sale and agreed originally for this to be done in a month. Then there was delays over exchange for what ever reasons our buyer came up with. Due to this we wanted a short time span between exchange and completion. Completion was haggled back and forth and we agreed on the original date that was missed a week last Friday, although i have been made aware that originally our buyer always aked for a completion date of next week, but due to being messed about with exchange we thought a month is more than adequate for the interim period. Our buyer obviously agreed to this date,

Part of me now thinks that this was his plan all along, and that he and his (friend) solicitor have done this before and know how to "play the game". For delaying the process by ten days, the financial penalties that he suffers are going to be approx £500 i believe in interest charges i believe. Which isn't a significant amount of money when house purchases run in to hundreds of thousands of pounds.

I really hope the above is true and it all goes through next week, the trouble begins if it doesnt go through. How can soemone get themselves in to this mess. If all the neccesary funds were in place at exchange, what has happened in the interim?

I'll keep you all updated with any progress, or lack of it that is made. Hopefully the above doesnt seem too vague, but i dont want to give to much concrete information just in case this thread is somehow stumbled upon by our buyer, or i am unsure as to where it leaves me legally if completion doesnt take place and we start going through the courts

Thank you all for taking an interest in this matter, and can i ask that you all keep your fingers and toes crossed for me next week.

Thanks
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# 18
Mouseman
Old 16-05-2010, 6:00 PM
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Sounds like you're in a strong enough position here, though that doesn't help the undue stress caused!

I have no personal experience in this field and little "reading knowledge" but from what I've gleaned it would seem that after the ten days have passed, you can apply to the courts to have the sale forced through? If buyer has no cash, just whip his deposit away, add on interest, costs and damages and you're well away, albeit with the stress of selling a house all over again.

What advice did you get regarding the pursual of costs for your sister's deposit, I was quite interested in that angle of the situation?

Best of luck with it - you might come out of this laughing yet!
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# 19
timmyt
Old 16-05-2010, 9:47 PM
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Quote:
Originally Posted by Doozergirl View Post
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) the balance owing (so ignore any deposit) and it is not great interest.

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 I guess he is noit a solicitor but a cheap clerk who probably does not know what to do now 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

Seriously, they can't 'pull out' after exchange, not without serious financial repurcussions in your favour.
they will lose their deposit and your wasted removal costs and if you sell for less, the loss you make.



see in red OP....good luck
My posts are just my opinions and are not offered as legal advice - though I consider them darn fine opinions none the less.

My bad spelling...well I rush type these opinions on my own time, so sorry, but they are free.
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# 20
centerhalf
Old 20-05-2010, 10:59 AM
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Just thought i'd give you an update on proceeding and also have a bit of a rant.

As stated on my last post that we had rescheduled to complete today. We got our conveyancing company dealing with this issue to call and ensure that everything was in place for completion to go through today. Our buyers solicitor assured us that its was.

Come 10 am today, we get a phonecall stating that our buyer cant complete today and it will be tomorrow, which is the final day of the "ten day notice to complete".

Timmyt you are right about us using a conveyancing comapny, my father went with these guys on recommendation of the EA, he has not bought and sold a house for 30 years, so assumed that they would offer the same service that he recieved from a solicitor last time he moved. I guess sometimes we have to find these things out the hard way.

Any way, the upshot is that we now have a provisional appointment with a proper solicitor (who coincidently i have used for matters in the past) local to where we live, tomorrow afternoon to discuss how we can take this comedian for everything that we possibly can.

If he was decent and honest throughout the process then i may not feel so strongly, but there are knock on implications such as my sister losing the house she has had an offer accepted on etc. They don't come up too often where she lives so this will make the whole experience even more sour.

So tomorrow its sh!t or bust for our buyer. I have everything crossed that it will go through, but a small part of me would like to take him to court, and to come out with a signifucant sum of money and for him to have nothing for it.
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