Exchanging next week but no definite completion date

avanti_2

Hi

My husband and I are buying our first property.
The sellers are moving into a new build which is still not ready. We will be ready to exchange next week but have been told that they cannot give us a definite completion date but at the moment it is looking like end of August/early September. In addition to this we have been told that we will get a 6-10 days notification of when we can move in.
As we are new to this, is this normal or would this be risky as exchanging contracts would mean no looking back and if they postpone the date we just have to go with it?

Thanks for the advice in advance.

PasturesNew

I'd say don't do it. It's OK for them to do it as they're moving into a new build, so they're in direct control to some degree over when it might happen. It's a risk they're taking and are buying from a developer.

You're in a different position. You'd be at their whim and the whim of the developer, without having any contract with the developer (so no clout to go down there shouting the odds).

Your mortgage will have an expiry date. If you don't complete within that expiry date you're left hanging without a mortgage in place and would have to apply again, or hope to win an extension. It's quite high risk.

Tell them "No". Let them take the risk. If they want to sell, then they should be prepared to set a date and move out, into rental/wherever ... not your problem.

tyllwyd

I agree, don't exchange contracts without an agreed completion date. Once you've exchanged contracts you've agreed to buy, and if something went wrong in the meantime (maybe the company you work for goes under and you lose your job and thus your mortgage offer), you'd be in danger of losing your deposit. They are the ones messing around and risking losing their FTBs (who are rarer than hen's teeth at the moment!)

Ulfar

Your solicitor should be advising against this, if they cannot commit find somewhere else. Developers can take huge amounts of time extra.

As the vendor they should be looking to move out and live with friends or rent depending on how long the delay will be.

G_M

Ulfar wrote: »

Your solicitor should be advising against this, if they cannot commit find somewhere else. Developers can take huge amounts of time extra .

He won't be advising against this - he will be telling you it is impossible to Exchange without a Completion Date.

A contract to sell a property must specify when the cash will change hands and when the property will change hands.

Speak to your solicitor. Or speak to the sellers. They will have to commit to a date and if their new build is delayed they will have to stay with friends/family or whatever.

If they refuse to commit to a date (and therefore refuse to Exchange) you'll need to decide whether to hang on for a completely indeterminate period of time, or to start looking again.

zzzLazyDaisy

It is not impossible, but it is very risky. f you search the forums you will find lots of threads from people who have exchanged contracts to purchase new builds at some undefined date in the future, only to find that their mortgage offer expired after 6 months and the lender refuses to renew it - or makes a much lower offer because the valuation has dropped in the meantime and they are committed to buy at the original price.

And if you do not complete after exchange, you do not just lose your deposit, you remain liable for the sellers consequential losses - which may include any drop in valuation between the price you agreed to pay and the price they eventually get, if lower.

Many people have been forced into bankruptcy as a result of this sort of thing.

You should insist on an agreed completion date. If the seller's new house is not ready by then, they will have to rent.stay with friends/whatever.

Richard_Webster

You are not buying the newbuild - they are. Your position and should be that if the sellers want to buy a new build that isn't finished that is matter for them and they should agree a fixed date which would be the earliest date that the legal completion of the new property is likely to take place. If they can move to their new property then, fine, if not they will have to go and live with Auntie Flo or ask the builder to put them up in a PX resale that hasn't been sold yet.

More fool them for buying a new build that isn't finished.

I assume the fact that a fixed date was unlikely to be available because the sellers were buying a newbuild was not explained to you when you made your offer. You make that point very forcibly.

Go and look for some other houses and tell the sellers that if they don't exchange with a definite date for completion you will buy something else.

Whenever I am approached by people buying a new build which is not virtually finished I warn them that they may well have to agree to move out and are they ready for that? If they are not then I point out that it is only reasonable that they spell out to their buyers at the beginning what is likely to happen and find out if they are prepared to sit and wait.

Of course, on top of all this is the point about mortgage offers expiring - which just makes it worse.

vet8

When we bought our last house, the sellers were moving to a new build. We were very inexperienced and when we exchanged the contract said we would complete by a date 2 and a half months in advance, but the builders would try to get the house finished sooner unless there was bad weather. Ha Ha Ha.

The weather was fine, but nothing happened. We actually found out where the new build was and went to visit it twice and found which one they were buying and there was no work on it at all. Having got a definite buyer the builder seemed to have stopped work to concentrate on others.

It took all of the 2 and a half months and our buyers were furious at having to wait so long. At the end of this time they gave us less than 7 days notice to complete. Great for arranging electricity, gas, telephone, removal van etc.!

In hindsight we realise we should have told them to move out after a month into temporary accommmodation. If their house is not finished that is their problem, not yours. I would not do it again.

Insist on a set date which you want.

timmyt

avanti wrote: »

Hi

My husband and I are buying our first property.
The sellers are moving into a new build which is still not ready. We will be ready to exchange next week but have been told that they cannot give us a definite completion date but at the moment it is looking like end of August/early September. In addition to this we have been told that we will get a 6-10 days notification of when we can move in.
As we are new to this, is this normal or would this be risky as exchanging contracts would mean no looking back and if they postpone the date we just have to go with it?

Thanks for the advice in advance.

it is normal when buying from a seller to you who in turn is buying a new build

(aside from the fact that I would never buy a new build as they have no style - unlike those of our european neighbours - and built too quickly with thin and squeeky walls/floors)

just make sure your lawyer puts in a long stop date by which you can back out - which will mean the seller to you will have to impose that on their developer.

otherwise, you could be posting in 12 month from now, locked in to a contract still

zzzLazyDaisy

timmyt wrote: »

it is normal when buying from a seller to you who in turn is buying a new build

No, since the credit crunch, this is no longer normal

otherwise, you could be posting in 12 month from now, locked in to a contract still

By which time your circumstances may have changed and your lender may no longer be willing to lend ... but you will still be legally obliged to complete

Don't do it.

Insist on a definite date and make sure it is within the time limit of your mortgage offer. The seller needs to keep you on board, so if necessary they will agree to move out and find somewhere else to live until their new place is ready.

Either that, or refuse to exchange until they are in a position to give you a definite completion date.

Bananamana

Not ideal but there's always a conditional exchange based on you having a satisfactory mortgage offer but the vendors may not agree as it throws the risk back on them. Not sure how it got to the verge of exchange and only just being picked up - this could be a lot of money in fees that could have bee saved early on.