Simultaneous Exchange/Completion... Erk!

uglybug

Well, the completion date is set for this Friday, but we've been forced into a simultaneous exchange and completion as our buyers have no deposit (in fact, they are borrowing 102%). As we have equity in our house and our buyers have no savings to their name, our solicitor said that he simply could not allow us to exchange with no deposit as it would leave us open to losing a lot of money with little chance of us getting it back from our buyers.

Anyhow, I just wanted a little reassurance, really. Our buyers are FTBers, our purchase is vacant possession with no onward chain. We just hope that the simplicity of the chain means that there is very little risk.

I'm just having this recurring nightmare of sitting in the van on Friday and getting a phone call to say that our buyers have pulled out... Erk! Or even worse, trying to renegotiate. As you can see, I am a little nervous!

Has anyone else out there had positive/negative experiences with simultaneous exchange/completion, or are all the scare stories just that?

Breath in, breath out, and relax!

pawpurrs

Its not ideal at all and it can all go pear shape, but it sounds like you have little choice. Personally I think that if a buyer has no deposit then this should be made 100% clear at the offering stage as this would affect my decision as whether to accept an offer from a buyer in this postion, I wish more agents would find this infomation out at offering stage (ex agent talking so feel I can say this)
Good luck, I am sure it will be ok, try to avoid a friday in case there are delays, meaning you can try for the following day.
I am sure it will be ok, if your buyers have got this far.

MascaraMinx

That's odd. If they are borrowing 102% surely the extra 2% is effectively an unsecured loan which means it could be advanced before completion to form the deposit. That is quite common with FTB's from what I can gather? I think you are right to be nervous - can't you insist that they pay a deposit in advance?

uglybug

Already tried with the deposit. The extra 2% is for legal fees, and stamp duty. Solicitor already tried to get an advance from Northern Rock, but they were having none of it.

In any case, if there are any delays we are moving opposite some very good friends of ours, and we have use of their garage for storage in case of this very eventuality. Unless it all goes completely wrong, we shouldn't have to move back into our house.

Three days to go...

maryjane01

I was a 1st time buyer with a 100% deposit and exchanged and completed the same day. Granted, where we were moving it was vacant posession so it wasn't too big an issue for the seller.

The buyer will have already paid (or be liable and in debt for) mortgage arrangement fees and a survey, so if it has come this far if they pull out they are losing money too.

I realise there is some risk to your position but don't worry too much about what hasn't happened yet and most likely not going to happen.

izoomzoom

We are purchasing with a 100% mortgage but because we are still waiting for some blasted documentation, we haven't even spoken to our sol about exchange / completion days.

I will be interested to hear what he says, when the time comes.

hex2

I have done this three times- two went well, one didn't. The one that didnt fell down due to my solicitor being poor, and the vendor going on holiday for a week either side of exchange/completion day. Delayed by a week until the right piece of paper was signed. Luckily we had a week to run on our rented accommodation.

Make sure that you talk to your solicitor regularly. What wound me up most was that he knew we couldnt exchange but didnt tell me till the day!

pawpurrs

izoomzoom wrote:

We are purchasing with a 100% mortgage but because we are still waiting for some blasted documentation, we haven't even spoken to our sol about exchange / completion days.

I will be interested to hear what he says, when the time comes.

If you havent got a deposit, then for goodness sake speak up now, as you will need to exchange and complete on the same day, and this is a huge inconvienance to the rest of the people in the chain, if there is one. Better to prepare everyone in advance than spring it on them at the last minute.

Personally, I would not accept an offer from a FTB with no deposit, unless I was desperate, as I wouldnt want to be in that situation. EAs should make sure that they ask this question from FTB as I think its a vital piece of infomation.

silvercar

If you are getting a 100% mortgage and buying over the stamp duty threshold (£125,000), you could use your stamp duty money, which doesn't have to be paid til 28 days after completion, as a deposit. When your mortgage comes through, on the day of completion, it will leave your solicitor with enough money to pay the stamp duty.

uglybug

The problem with that is when places like Northern Rock lend more than 100%. We were told by the EA that our buyer was on 100%. No problem, thought us, they'll still have SD and fees that they can use as the deposit between exchange and completion. Only after we were ready to exchange were we told that it was 102% and they had not a penny for a deposit.

Grr @ Estate Agents. But also, the solicitors should really pick this up if they follow the Law Society's conveyancing guidelines.

Oddgy

Ours are having 115% as they are paying off LOANS as well. Eeeek!!
Still no more news - we are in the same postion as you know. Well thats if it goes that far as our buyers are causing problems as youve probably read about! :-(