FTB Advice Please! Vendor stalling on exchange!!

Jellybean_Jo

I'm looking for a bit of advice, possibly some reassurance and also to have a bit of a vent so please bear with me!

I viewed a property at the end of January, which was on the market for £50,000 (50% shared ownership, and yes I'm happy with the scheme). The next day I put in an offer for £48000, given that the place was looking a bit grubby and unloved after being empty for a while. Apparently, it was sold before Xmas and ended up dragging on for months before the buyers pulled out, by which point the vendor was committed to move into a new property.
My offer was accepted straight away, no negotiation at all. I saw a mortgage adviser later that day and instructed a solicitor to deal with the conveyancing. I completed the ridiculous paperwork for the HA the same day also, as the vendor was pushing for a quick sale and had specified a request for 28 day exchange of contracts.

Fast forward 5 weeks and after much delay in getting answers to queries from the vendor, my solicitor was happy for me to come in and sign the paperwork, and hand over my 10% ready for exchange. This was all great I thought, especially with having been warned that the third party interest in a shared ownership property means it takes longer to go through! In fact the HA side of things was the most efficient!

Today, I'm once again finding myself completely frustrated at the lack of progress. We still have not exchanged. Apparently the vendor is in negative equity and has not paid her solicitor the necessary monies owing in order to exchange. That's all I know. There's been a distinct lack of information coming from their side. All I can assume at this point is that she hasn't got the money, but due to the previously mentioned lack of information all I can do is guess. My solicitor has been brilliant and has been chasing all week, but I don't know what to do now. I'm starting to understand why the previous buyers pulled out!! If she couldn't afford to accept my offer, she shouldn't have accepted it!! This is not the stage where I want to be experiencing a delay like this. It's making me really anxious!! All I want is some more information; why the delay? Does she have any idea how much longer will it take? Is my requested completion date of 23rd March going to be possible?

*sigh* rant over! Sorry for the epic post! So, am I worrying unnecessarily, or is there something not right here?

niceguyed

The gap between exchange and completion is usually for request of monies from the bank and to allow buyer/seller to organise things for removals. That being said exchange and completion can happen at the same time so the 23rd is possible.

Obviously you're committed financially so if things did break down you're out of pocket by several hundred pounds. So yes I would be worried if that is the reason given by your solicitor for the delay. The vendor has also committed some money to legal costs so it is strange if they suddenly realise they can't afford to move.

It is up to you how long you wait. If it was me I'd have a deadline if the only reason for delay is the vendor can't gather the required funds. How long is up to you.

mscott1983

This is a difficult and frustrating situation.
The contract is between you and the vendor, and a term of the contract is that the vendor gives clear title, which means that they have to pay off any mortgage or charge on the property, as you would take it subject to the charge if they did not. For this reason, prior to completion the solicitor for the vendor has to give an undertaking for and on behalf of his firm (enforceable by the Law Society) to your solicitor, to pay off any mortgage or charge before handing the balance of the purchase monies to his or her client, so they will absolutely not exchange or complete without being in funds for everything that has to be discharged. Plainly there is some kind of shortfall. You are not entitled to know what this is, BUT it may not all relate to the property. Have you suggested to your solicitor that they investigate with the solicitor for the vendor whether this situation could be unblocked if the vendor give YOU authority to discharge any outstanding mortgage or charge on the property, and deduct this amount from the completion monies? If the mortgage debt is greater than the sale price then this will not work, but if you can get your solicitor to start the conversation then it may be possible to find a way through.
If the mortgage debt is larger than the proceeds of sale, plainly the vendor needs to de-gear, so she will want the sale to go ahead, but will not want to take out a further unsecured debt to discharge the secured one over the property. In these circumstances she will need to be pushed to make up her mind, so the only thing I can suggest is that you threaten to walk away from this if she has not exchanged by a set date.
Otherwise, I am afraid that this is the classic complaint about the system of conveyancing in the UK – until you have exchanged contracts either party may walk away, but the purchaser will lose quite a bit of money to get to exchange and has no real visibility of the personal circumstances of the vendor while this money is being spent. Using a conveyancer who can deal transparently and quickly on-line, I have always used Convex (https://www.convex.net) at least keeps costs down and allows you quickly to evaluate whether the transaction is going to happen – at least allows you to walk away before you have invested too much emotional energy in the purchase!

Jellybean_Jo

Right, so a bit of an update...

I managed to get some more information from my solicitor on Friday. Apparently the vendor is waiting for a redemption figure from their lender before arranging the transfer of funds and then exchange. Am I right in thinking that all they're waiting on is for the lender to tell them exactly what the difference is to be made up? And if so, is it normal to be taking this long? I've moved past frustration and into just generally being annoyed at the whole situation.