unable to complete on property purchase

MrsJam

Hi, we've put down a deposit and exchanged contracts on a new build apartment. Our house is on the market but hasn't sold despite dropping the price. The house developers have informed us our new property will be ready to move into in early December. Obviously, we will be unable to complete having not sold our home. If we pull out now we accept we will lose our deposit but does anybody know if there may be other costs we will have to pay? Any advice gratefully received.

goldbyron

I have to ask - why did you exchange contracts on your purchase without selling your home first? I don't understand - surely your solicitor pointed out that this is a very high risk strategy for you.

One option is to go to one of those unscrupulous chain break companies who buy your house for 80-90% (approx.) of the market value if you want a quick sale. You stand to lose a huge deposit and you could be sued for breach of contract - I would calculate which loss is greater.

mrsS_2

sometimes the contracts on newbuilds contain a clause about "consequential loss" which you would also be laible for

this would involve having t0 pay the difference if the builders cannot resell the property for what you would have paid for it-

ie if they get £10000 less when they sell it again they may come after you for this and the associated legal fees.


have you looked into bridging loans?

BargainJunky

Could you ask the builder to do a part exchange?

If not a bridging loan may be your best bet unless you want to loose your deposit. I think your solicitor was in the wrong allowing you to exchange on the newbuild before you had sold your own property.

Good luck.

mountainofdebt

selling your new home.

I think the way it works is that you effectively buy and sell the property on the same day but I guess you may have to take a hit on the loss.

LittleTinker

MrsJam wrote:

Hi, we've put down a deposit and exchanged contracts on a new build apartment. Our house is on the market but hasn't sold despite dropping the price. The house developers have informed us our new property will be ready to move into in early December. Obviously, we will be unable to complete having not sold our home. If we pull out now we accept we will lose our deposit but does anybody know if there may be other costs we will have to pay? Any advice gratefully received.

I really dont think your Solicitor would have done this without you knowing EXACTLY what you were getting in to.

I think it is far more likely that you have signed the contracts. So many people who I talk to think that they have exchanged contracts when they have only signed them ready for exchange.

Might be wrong, but it seems more likely.

terrierlady

most solicitors need proof in writing that you can exchange and have funds ready for completion.
Ask the builder if they can chain break for you or put the property on the market and do a back to back.
I would imagine that you have signed contracts but not exchanged.

Sumostar

HAve you considered selling your property at auction?

Yes, it is slightly risky because you don't know exactly how much you will get, but you can always set a reserve at the current estimated value less the deposit which you stand to lose anyway. That way, as long as it reaches the reserve, you will not lose as much as if you were to lose the deposit.

And it will be off your hands!

Poppy9

Is there much demand for the new property you are buying and have prices risen. If so complete the sale with loans if necessary and sell at a profit. Or you could become a landlord and buy to let or let your old house.

MrsJam

Many thanks for all the above info, it's worth considering. Our solicitor did stress the risk involved but with over six months to go until completion we thought we would have sold our house. With hindsight it was a silly risk to take, now we are trying to make the best of the situation we are in, thanks again.