IMPORTANT! This is MoneySavingExpert's open forum - anyone can post

Please exercise caution & report any spam, illegal, offensive, racist, libellous post to forumteam@moneysavingexpert.com

  • Be nice to all MoneySavers
  • All the best tips go in the MoneySavingExpert weekly email

    Plus all the new guides, deals & loopholes

  • No spam/referral links
or Login with Facebook
Exchange and completion on house
Closed Thread
Views: 4,457
Thread Tools Search this Thread Display Modes
# 1
mel19632
Old 11-02-2008, 2:40 PM
MoneySaving Stalwart
 
Join Date: Jul 2007
Posts: 645
Default Exchange and completion on house

I have a question on exchange and completion of a house....

Basically we are exchanging today with a 5% deposit - however we are supposed to be completing on friday (10% deposit being put down).

The people we are buying off are very difficult and have said that if we don't complete by friday, then they will pull out of the sale.

If we exchange today - can they do that? At the moment, the mortgage funds have not been called down by the solicitors and we may not be able to complete on friday.

Hope someone can help!!
Paying down the mortgage:
At 1 October 2011: 226,000
Currently: 224,499
Aim: 85% LTV (212,500)
Paid 1,500
Target remaining: 88.89%
mel19632 is offline
Report Post
# 2
slipp_digby
Old 11-02-2008, 3:03 PM
MoneySaving Stalwart
 
Join Date: Sep 2007
Posts: 391
Default

Your conveyancer sounds terrible

Why are you about to exchange contracts with a completion date of friday which you dont think you can realistically meet? Have they (conveyancer) advised when they actually can draw down the funds from the lender?

Are they really going to let you sign a contract you can't fulfill?

If you and the vendor both sign and exchange contracts today then it is binding in law and neither you or them can 'pull out' without consequences.

Most importantly there will be legal/financial consequences if you fail to complete on time, especially with a difficult vendor. They may look to recover losses, as may others in the chain.

Last edited by slipp_digby; 11-02-2008 at 3:21 PM.
slipp_digby is offline
Report Post
# 3
merlinthehappypig
Old 11-02-2008, 4:15 PM
Serious MoneySaving Fan
 
Join Date: Jun 2007
Posts: 1,065
Default

As slipp-digby says this is not a position that any decent conveyancer would allow you to get in to.

I don't understand the bit about the 5% deposit on exchange and then a further 10% on completion so I wonder if you haven't been told the whole picture?

Normally you would pay a 10% deposit on exchange, then the full balance on completion. This can be lower, say 5%, if the seller agrees.

When you are ready to exchange your solicitor or conveyancer will agree a mutually agreeable completion date with the seller's solicitor. When this has been agreed, both parties have to abide by it. There can be significant financial consequences if you don't.

It is possible to exchange and complete on the same day so, logistically, what you are suggesting is possible. Your conveyancer would normally need to know this in advance so that everything can be done on time, including the drawdown of the funds from the bank.

If it hasn't been arranged in advance then your conveyancer is unlikely to be able to meet this deadline.

The bottom line is that you don't agree to any date that your conveyancer can't meet. You take your advice from him or her. If they say they can meet the deadline, then fine. If they can't then you need to agree a later date.
merlinthehappypig is offline
Report Post
# 4
Richard Webster
Old 11-02-2008, 4:21 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Oct 2006
Location: Hampshire
Posts: 6,991
Default

Best thing to do is talk to your conveyancer and he can then explain the poitns because to me they look like a classic case of confusion because something has been misunderstood or not explained properly. So go back and say you don't understand and will they go through it again with you.

Most likely your conveyancer is trying to get an exchange with a slightly later completion date so that there is time to draw down the money. If you have exchanged with a later completion date then the seller can't pull out.
RICHARD WEBSTER

As a conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability except to fee-paying clients.
Richard Webster is offline
Report Post
The Following User Says Thank You to Richard Webster For This Useful Post: Show me >>
# 5
space rider
Old 11-02-2008, 6:16 PM
Serious MoneySaving Fan
 
Join Date: Nov 2006
Posts: 1,797
Default

I had that done to me after I had spent all that time in the solicitors going through the documents only for them to get a phone call to say that my buyer only had 5%. What I didn`t understand was why go to exchange when you know you need 10%. I was so upset that I put the house back on the market. She did come up with the money a week later.
space rider is offline
Report Post
# 6
chappers
Old 11-02-2008, 7:40 PM
Serious MoneySaving Fan
 
Join Date: Dec 2004
Location: Oxford
Posts: 1,966
Default

This has been brought up a few times recently.Whatever you do don't exchange and set a date for completion that you can't meet, the consequences of not completing can be serious. I have said this many times before but here goes again.
If you fail to complete on the day set then the vendors solicitor can serve on you a Notice to Complete, this then gives you 10 days to complete, if after that 10 days you still fail to complete then they can pull out of the legally binding contract,keep your deposit and sue you for any costs due to the aborted sale please also note that other people up and down the chain may be in the same position and you could also possibly be sued for someonelses lost deposit and costs
chappers is offline
Report Post
# 7
mel19632
Old 12-02-2008, 12:14 PM
MoneySaving Stalwart
 
Join Date: Jul 2007
Posts: 645
Default

Thanks for all the replies - I think I have been confused by my boyfriend, as now he is saying that he never said we were going to exchange on 5%!

its not the conveyancers, its def. my boyfriend. Date set for exchange and completion for Friday!
Paying down the mortgage:
At 1 October 2011: 226,000
Currently: 224,499
Aim: 85% LTV (212,500)
Paid 1,500
Target remaining: 88.89%
mel19632 is offline
Report Post
# 8
Richard Webster
Old 12-02-2008, 2:07 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Oct 2006
Location: Hampshire
Posts: 6,991
Default

Quote:
I had that done to me after I had spent all that time in the solicitors going through the documents only for them to get a phone call to say that my buyer only had 5%. What I didn`t understand was why go to exchange when you know you need 10%. I was so upset that I put the house back on the market. She did come up with the money a week later.
Your solicitors were a bit daft leading you to expect 10%. Sure solcitors ask for 10%, but most of the time know they are not going to get it and very few sellers' solcitors would turn down a 5% deposit if that's all the buyer could provide. I can't imagine why your solicitor lead you to suppose that it was such a big deal to insist on 10%. He should have warned you that it was quite possible that you would only get 5% or less and that you should accept that. In the real world the deposit is only of practical significance if the buyer doesn't complete - then you have more of their money.

The chances of a buyer deciding not proceed for some random unrelated reason (e.g family illness/death) in the period while they are trying to find the difference between the 5% and 10% are higher in my view than a person who has put down a 5% deposit breaking his contract and leaving the seller with only that deposit. So why push for 10%?
RICHARD WEBSTER

As a conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability except to fee-paying clients.
Richard Webster is offline
Report Post
# 9
slipp_digby
Old 12-02-2008, 7:45 PM
MoneySaving Stalwart
 
Join Date: Sep 2007
Posts: 391
Default

Quote:
Originally Posted by slipp_digby View Post
Your conveyancer sounds terrible
I take it all back.

Your BOYFRIEND sounds terrible give him a hard slap
slipp_digby is offline
Report Post
# 10
jatt
Old 12-02-2008, 8:18 PM
MoneySaving Convert
 
Join Date: Jan 2007
Posts: 74
Default

Hi everybody,

I am a bit confused here, I am a FTB with 100% mortgage and no deposit, so what happens at exchange regarding this 5% or 10% deposit you guys r talking about?

Thanks
jatt is offline
Report Post
# 11
TBeckett100
Old 12-02-2008, 8:33 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Jul 2006
Posts: 3,623
Default

i think exchange and completion on the same day applies to 100% mortgages
TBeckett100 is offline
Report Post
# 12
jatt
Old 12-02-2008, 8:42 PM
MoneySaving Convert
 
Join Date: Jan 2007
Posts: 74
Default

Hi TBeckett100,

Is there any other option for people with 100% mortgage or do all of them exchange and complete on same day?

Thanks vbmenu_register("postmenu_8605525", true);
jatt is offline
Report Post
# 13
PasturesNew
Old 12-02-2008, 8:48 PM
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: Jul 2007
Location: SW UK
Posts: 48,521
Default

This shouldn't be a problem these days, with lenders not liking lending 100% any more it won't affect many people at all. People will have to come up with the deposit, like the good old days.
PasturesNew is online now
Report Post
# 14
Richard Webster
Old 13-02-2008, 9:40 AM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Oct 2006
Location: Hampshire
Posts: 6,991
Default

Quote:
I am a bit confused here, I am a FTB with 100% mortgage and no deposit, so what happens at exchange regarding this 5% or 10% deposit you guys r talking about?
Unless you are getting one of these 105% loans such as those offered by Northern Rock, if it is literally 100%, then usually you will have to find some money for SDLT, Land Registry Fees and the solicitor's costs on top. You give that to your solicitor before exchange and he uses it as the deposit. On a £150K property this would be a bit over £2,000 so your solicitor will try to persuade the people up the chain to accept that on exchange... It is not ideal but often the bottom line is whether someone who has put £2,000 in, would walk away, and not complete, thereby throwing that money away?

The sum paid over comes off the amount the seller's solcitors will need to be paid to them on completion but as 100% mortgage money will appear the costs SDLT etc get paid out of the surplus.

If not you either pay for a deposit guarantee policy (which is quite expensive for what it is) or exchange and complete on the same day. Usually the FTB with the 100% mortgage has nothing to lose by exchanging with a nil deposit a week or two before completion, but the sellers, if they are buying something else will be more windy about this because they stand to lose out more if something goes wrong.
RICHARD WEBSTER

As a conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability except to fee-paying clients.
Richard Webster is offline
Report Post
# 15
themdns
Old 15-01-2010, 6:53 PM
MoneySaving Newbie
 
Join Date: Dec 2009
Posts: 6
Default

Hi guys,

I am having a really stressful problem.

Basically seller wants to E&C on the 29th January. However, I am still awaiting mortgage offer. valuation was done on house on wednesday.

seller made it clear if E&C not complete they will pull out.

I will then lost my deposit.

Is there anything I could do to basically stop seller from pulling out?

Will I lost my deposit? Will I have to pay for the solicitors still and the mortgage broker?

It is stressing as I am also without a place to stay then as my current contract on the house I am renting is finished on the 31st January.

I will be grateful for any advices or past experiences.

Please HELP!
themdns is offline
Report Post
# 16
Milliewilly
Old 15-01-2010, 7:06 PM
Serious MoneySaving Fan
 
Join Date: Oct 2009
Posts: 1,047
Default

Quote:
Originally Posted by themdns View Post
Hi guys,

I am having a really stressful problem.

Basically seller wants to E&C on the 29th January. However, I am still awaiting mortgage offer. valuation was done on house on wednesday.

seller made it clear if E&C not complete they will pull out.

I will then lost my deposit.

Is there anything I could do to basically stop seller from pulling out?

Will I lost my deposit? Will I have to pay for the solicitors still and the mortgage broker?

It is stressing as I am also without a place to stay then as my current contract on the house I am renting is finished on the 31st January.

I will be grateful for any advices or past experiences.

Please HELP!

It is possible to do in the timescale you give. If you haven't paid a deposit then don't until you have your mortgage offer and are happy you can complete by a given date. Have you had the Survey report back yet as this may mean renegotiation with the seller?

If the seller pulls out they are not going to find anyone else to buy by the 29th January. If the seller does pull out then you will lose any money you have spent on a survey plus your solicitor will probably charge you for the work they have done upto date unless you negotiated otherwise.

How long has the process been going on for for the Seller to ask for a completion in a couple of weeks?
Milliewilly is offline
Report Post
The Following User Says Thank You to Milliewilly For This Useful Post: Show me >>
# 17
themdns
Old 15-01-2010, 7:24 PM
MoneySaving Newbie
 
Join Date: Dec 2009
Posts: 6
Default

i have forgotten to mention that it is a brand new place, i am buying off developer.

offer was accepted on the 14th December. valuation was only done on wednesday 13th January.

i am afraid that developer is keen to pull out as the asking price for a similar unit on the floor above is now fixed by +25k from my offer.

this is depressing!
themdns is offline
Report Post
# 18
Milliewilly
Old 15-01-2010, 7:28 PM
Serious MoneySaving Fan
 
Join Date: Oct 2009
Posts: 1,047
Default

Quote:
Originally Posted by themdns View Post
i have forgotten to mention that it is a brand new place, i am buying off developer.

offer was accepted on the 14th December. valuation was only done on wednesday 13th January.

i am afraid that developer is keen to pull out as the asking price for a similar unit on the floor above is now fixed by +25k from my offer.

this is depressing!
Where has the +25K come from?? Has it SOLD at + 25K? If that was the case the developer wouldn't be pushing you for a completion date he would be handing you your deposit back and your fees!!

Stick to your guns you can't make the bank move any faster and 6 weeks including Xmas / New year is stretching it really unless you had cash. I take it the property is completely finished?
Milliewilly is offline
Report Post
The Following User Says Thank You to Milliewilly For This Useful Post: Show me >>
# 19
themdns
Old 15-01-2010, 7:40 PM
MoneySaving Newbie
 
Join Date: Dec 2009
Posts: 6
Default

I personally could not understand why developer is being pushy. I have never agreed to exchange & complete on the 29th but mentioned I would like to exchange & complete as soon as possible. The apartment is completely finished and is empty since completion probably 2 years ago.

The similar unit on the floor above is on the market for a fixed price which is +25k of my offer. It is not sold yet though.

My head is playing games with me, all thoughts coming through like maybe developer been offered 100% cash buy or etc.

I am a FTB, been saving for so many years and been aiming the particular unit since it came out on the market. I suppose my luck is running out on me eh?

Thanks Millie for your time and thoughts.
themdns is offline
Report Post
# 20
PasturesNew
Old 15-01-2010, 7:50 PM
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: Jul 2007
Location: SW UK
Posts: 48,521
Default

Quote:
Originally Posted by mel19632 View Post

its not the conveyancers, its def. my boyfriend.
Never let a bloke near anything important ... they're quite fluffy-headed really.
PasturesNew is online now
Report Post
Closed Thread

Bookmarks
 
 




Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

 Forum Jump  

Contact Us - MoneySavingExpert.com - Archive - Privacy Statement - Top

Powered by vBulletin® Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.

All times are GMT +1. The time now is 10:31 PM.

 Forum Jump  

Free MoneySaving Email

Top deals: Week of 17 September 2014

Get all this & more in MoneySavingExpert's weekly email full of guides, vouchers and Deals

GET THIS FREE WEEKLY EMAIL Full of deals, guides & it's spam free

Latest News & Blogs

Martin's Twitter Feed

profile

Cheap Travel Money

Find the best online rate for holiday cash with MSE's TravelMoneyMax.

Find the best online rate for your holiday cash with MoneySavingExpert's TravelMoneyMax.

TuneChecker Top Albums

  • THE SCRIPTNO SOUND WITHOUT SILENCE
  • TRAINBULLETPROOF PICASSO
  • SAM SMITHIN THE LONELY HOUR (DELUXE EDITION)

MSE's Twitter Feed

profile
Always remember anyone can post on the MSE forums, so it can be very different from our opinion.
We use Skimlinks and other affiliated links in some of our boards, for some of our users.