When is a house considered sold ??

Sue**_3

Can anyone help me with this please ??? I have bought and sold few houses in the past and my understanding is that a house is not considered sold until the contracts have been exchanged and completed.
I am now in a very odd situation. In January I put my house up for sale, the estate agent recommended I used a local solicitor who can defer the cost of the HIP's, I went along with their advice. I signed and agreement wich included the conveyancy fee also, this finance agreement is with a company called Closed Payment Services. The agreement was that if the house was not sold in 9 months then the finance of £999 was to be paid. I also signed an agreement with an insurance comapany called CSL, they insured the loan, if my house was not sold by 01.10.10 then this insurance would cover the cost. So in effect if my house was not sold within 9 months I do not pay for the HIP's and conveyancing fee's. Seemed a good deal when I signed it. In July I accepted an offer on my house and for one reason and another there is no way the contracts will be exchanged or completed by 01.10.10 this to me means my house will not be sold within 9 months. I have contacted CSL to see how I claim on the insurance, they have infomed me that as I have accepted an offer on my house they consider it sold.
I now face a bill of £999 which I cannot afford until the sale of my house is completed. I contacted Closed Payment Services to explain the situation and they have told me I face a fee of £35 when the payment defaults and if the sale is not completed by the end of October I will have a further fee of £75 and referred to a debt collector who will arrange a payment plan.
I would love to hear from any one with advice on this as it is really worrying me. Many thanks for taking the time to read this. Sue

steve1980

The insurance company will try every way to avoid paying out. The property is officially sold once contracts have exchanged, not before.

G_M

I disagree. Not sold till Completion. That is when the money changes hands and the buyer's name is put on the deeds.

However, you may find they have their own definition so you need to go through your contracts with these companies carefully. Estate agents, for example, typically charge their fees to vendors if they 'introduce a proceedable buyer'. So if the vendor withdraws from the sale the agent still charges their fee, even though the property was not 'sold', since they found a buyer who was willing and able to buy.

CSL's T&Cs may have similar clauses.

Frankly the whole deal sounds highly dodgy. Estate agent doubtless getting commission for signing you up, expensive conveyancing/HIP (HIP??), and, as you are now finding out, catches everywhere.

satchmeister

An offer is just that an offer and the purchaser can pull out at any time before exchange ie 5 minutes before exchange if they wish and you have no come back as the sale has not been made. At exchange the solicitors exchange signatures - this will often be over the phone - there is a term for it but I can't remember the name. The money changes hands at completion and the keys handed over.

Sue**_3

Thank you for taking the time to reply. You are confirming just what I thought. Im wondering if i need to get legal advice on this. With the problems im having with the sale anyway this is all just making wish I had not bothered. Im moving to be nearer my family and decided to rent for a year until I am settled and decide where I want to live, so when I put the house on the market I thought 'just selling and not buying' would be easier !! Su

Richard_Webster

I don't think we can answer this because it will depend on the small print of the scheme in question and you will need to read that to find the definition of "sold".

poppysarah

But if their defnition varies from the "generally perceived" view of sold then is it an unfair T&C?

dizziblonde

I will stop panicking our purchase is going to fall though, the day the keys are in my hand and my feet are walking through the front door - not a moment before.

The sold board out the front I simply regard as an "Oi gerroff dibs-ied" because the pessimist in me knows so much can go wrong when you collide banks, human nature and greed and the legal profession.

Badger_Lady

Either way, it has to be sorted out... if it is allowed to default then you're going to have a horrible mark on your credit history that will affect what mortgage you can take out! Believe me (someone who had a joint account with a secretive partner who defaulted to the meagre tune of £220), that makes a big difference

ItMightBeUsefulOneDay

steve1980 wrote: »

The insurance company will try every way to avoid paying out. The property is officially sold once contracts have exchanged, not before.

Exactly, but I'd wait until the final stage before agreeing it's actually sold - COMPLETION.

Just because you have an offer, even a proceed-able offer means nothing in this climate. The buyer could change their mind, the banks could pull the mortgage deal, the survey could find a previously unknown 4000ft mine shaft under the front door or a 6-lane bypass is about to be built through the back garden.

"Agreed a price" is nothing like sold.

Even with contracts exchanged, any one of these could happen and the deal could fail. So even at that stage, it's not sold.

Sold is the completed stage. The keys are in your hands, you are the owner (or renter from the bank).

sonastin

Get your buyer to "pull out". And then make you the same offer again on 1 October. That might get you round their definition of sold (depending on the exact wording...)