Is this ill advised or even illegal!!!

zoejones_2

Help!!!
We have found our ideal property on a new development, problem is we still haven't sold our house and they won't take an offer from us until we can prove that we can proceed to exchange within 28 working days.

The pressure is on, as they only have one house remaining, so we came up with a potential way of buying us some more time - ask my parents to make an offer on it. You see they don't have a mortgage on their house and have enough private equity to make it look feasible on paper, which is all the developers are looking for.

All they would have to do is exchange contracts and pay the 5% deposit and hopefully we'd have sold our house by the time the actual completion date in June comes around.

Problem is we're not sure whether this would work out in the grand scheme of things and we don't know if there would be any legal ramifications to what we're planning.

Apart from the obvious risk of us not selling our house in time.............. does anyone know if there are any other risks.

We'd hate to lose our dream house but I don't want to get anyone into trouble with the law!!!

Any advice would be greatfully received.

seven-day-weekend

I don't understand this....wouldn't it then be your parents' house? Or have I missed something obvious.

Or are you just wanting your parents to put in an offer so that the house doesn't get sold to anyone else, and then they pull out and you come in when you've sold?

Sounds illegal, but I don't know if it is.

And you may not have sold your house in time.

There will be other houses, I wouldn't bank on this risky (and possibly illegal) scheme if I were you.

yummynanny

What you need to bear in mind is that having exchanged contracts, your parents are obliged to complete the purchase or forfeit the deposit. The builders may well accept a 5% deposit but are, in fact, entitled to 10% and, therefore, if the deposit was forfeited, the builders could demand a further 5%, especially if they realise they are being played. Added to that you will need to seek the advice of a solicitor in respect of the actual purchase documentation. As far as I am aware, in order to exchange contracts the solicitor needs to be provided with proof of funds to complete. I cannot think of a way in which your parents can exchange contracts and then you jump in to complete. You need to speak to a solicitor. Do not be influenced by the salesperson employed by the builder as it is likely they are not legally qualified to advise. Good luck.

deary65

Speak to a FA, and think in terms of a bridging loan,you might get one in principle in a few days.

maninthestreet

Why is exchange in 28 days being asked for, when completion (of the actual house?) is not until June?

MJMum

they won't take an offer from us until we can prove that we can proceed to exchange within 28 working days

If you really MUST have this house (and I agree 100% with the poster who said that there will be other, possibly better, houses) then price your existing house to sell quickly. Is it 28 days or 28 working days, as you have typed, as the latter I would say is achieveable even with an existing property to sell. Some housebuilders will allow you to reserve a plot, even with a property still to sell, if you can show that you are marketing your existing property at a discounted price to sell quickly (although, personally, I'd say this was a bad idea as you'll lose money).

HTH.

Bossyboots

It is possible to exchange with a "completion in any name" clause, allowing you to fulfill the contract. Someone posted here the other night though that they didn't think developers would agree to this because you would then be in competition with them for any other unsold houses, in theory.

I would suggest that what you are proposing is far too risky because you cannot guarantee you will have the funds. The only person I know who did the "completion on any name" procedure was a speculator who had the funds to complete the purchase if they didn't find a buyer at a higher price in between times.

maninthestreet - this exchange and completion timescale is usual on new builds.

terrierlady

house buying is stressful with everything on your side so dont do it, another home will come your way ,the reason builders want a 28 day exchange is linked to incentives plus it allows you to choose your own kitchen choice etc and tiles etc, most developers choose bland colours if the plot remains unsold at the time the roof goes on.
Do they do a part exchange or easy move scheme?