Risk of Buyer pulling out after Exchange

elliegoodare

I wonder if you can help me with some advice?

Last year I had a terrible experience of buyers pulling out on the day of exchange and completion!!!!!

One year on, I have just exchanged contracts yesterday with our buyers. Completion is 3 weeks away.

Can I now be 100% confident to go forward and sign a contract with a rental property next week and move out start shipping furniture to the new place before completion?

I'm worried that if in the unlikely event the buyer decided not to complete that they would find a clever way they could get out of paying the 10% deposit. Have you ever heard of someone that didn't complete and didn't end up being forced to buy and/or not losing their deposit?

Many thanks

KateLiana27

Yes, you can be 100% confident.

There is no clever way to get out of the 10% deposit (and potentially much more besides). That's the point of exchange.

The problem with last time was exchange and completion on the same day - in that situation, you don't know until the day of the move that you'll actually be moving. As you found out, unfortunately. But the situation is totally different once exchange has happened.

elliegoodare

Thank you.

How about if the US markets crash and banks with drawer their offer of lending?

Out of interest, how successful can forcing a buyer to buy, when they may not actually have the funds due to market crashes etc?

I read direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/BuyingYourHome/DG_4001326

and it says "Once contracts are exchanged, the agreement to sell and buy is legally binding and usually neither party can pull out without paying compensation."

the 'usually' still worries me

G_M

Nothing in life is 100% certain, so no, you can't be sure.

But it is very rare. Very few solicitors, who convey properties on a daily basis, have ever had a client let down in their entire professional careers.

Basically Exchange means there is a binding contract. With sever legal penalties for whichever party might fail to Complete.

But it does happen (there was a long thread here around 9 months ago where a seller refused to Complete and leave the property. As I recall eventually the buyer got the property, AND considerable damages.)

As for funding, once a firm mortgage offer has been made it is highly unusual for the lender to withdraw their offer. Again, it can happen - for example if the lender found out the buyer/borrower had lied on their application, but as for the US 'crash', I'd stop worrying if I were you.

edit: here you go. This will scare you!

theGrinch

I have seen it happen once to a friend selling in summer 2007. At the time there was no explanation apart from the buyers finance was withdrawn. Some months later he rationalised it was a tacit bank policy of no new loans before the proverbial doo-doo hit the fan with Northern Rock et al.

That said its rare.

Richard_Webster

I wonder if you can help me with some advice?

Last year I had a terrible experience of buyers pulling out on the day of exchange and completion!!!!!

One year on, I have just exchanged contracts yesterday with our buyers. Completion is 3 weeks away.

Can I now be 100% confident to go forward and sign a contract with a rental property next week and move out start shipping furniture to the new place before completion?

I'm worried that if in the unlikely event the buyer decided not to complete that they would find a clever way they could get out of paying the 10% deposit. Have you ever heard of someone that didn't complete and didn't end up being forced to buy and/or not losing their deposit?

Many thanks

Don't go out of the house, you might be run over by a bus!

Yes, it does happen, but how often? If you worried about this level of risk you would never do anything.

NittyGritty

just curious if someone does pull out after exchange, who gets to keep the deposit they paid, is it solicitor or yourself or is it shared ? also if theres any other compensation, etc same question as above, thanks

Gwhiz

NittyGritty wrote: »

just curious if someone does pull out after exchange, who gets to keep the deposit they paid, is it solicitor or yourself or is it shared ? also if theres any other compensation, etc same question as above, thanks

You do. But you could always share it with the solicitor if you're feeling generous