Pulling out after exchange.... what happens?

jd1000

Hi all,
I know this is highly unlikely, bear with me....

Just thinking about a scenario. What if there is a chain of three buyers (1, 2 and 3).

Each agrees to put a 10% deposit.

At exchange,

1 puts a deposit of £10k.
2 puts a deposit of £20k (using the £10k from buyer 1 as part).
3 pays nothing because they are the end of the chain.

Then for some reason buyer 1 pulls out, so the chain collapses. I believe this will cause him to loose his deposit. But would buyer 2 also loose their deposit?

R_P_W

Well it's a lot worse than losing the deposit. You are obliged to complete the purchase so I'd expect to be taken to court! Not a position u want to be in.

Exchanging contracts is a commitment. You can't really change your mind after

G_M

1 would be responsible for all consequential losses. ie 2's deposit, plus potentially the hotel bills of both 2 & 3, plus aborted removalcosts, plus any other expenses they incur.......

If 3, for example, was planning to use the money from his sale to pay for a round-the-world cruise which then had to be cancelled....

If 2 was moving from London to Manchester to start a new job, and lost the job as a result......

LOTS of money!

martinsurrey

G_M wrote: »

1 would be responsible for all consequential losses. ie 2's deposit, plus potentially the hotel bills of both 2 & 3, plus aborted removalcosts, plus any other expenses they incur.......

If 3, for example, was planning to use the money from his sale to pay for a round-the-world cruise which then had to be cancelled....

If 2 was moving from London to Manchester to start a new job, and lost the job as a result......

LOTS of money!

I've seen a case of someone exchanging on 3 new build plots, off plan, paying a 10% deposit, then not completing and ending up losing the deposit + a further 15% (lower resale values due to recession)+ costs (high court).

Don’t even think about it, it’ll make your eyes water!

danielanthony

But if 1 hasn't got the money to pay then it doesn't matter how much is awarded, you can't get blood out of a stone!

Yorkie1

That's one reason why lenders increasingly want to see evidence of deposits and proof of income.

phill99

If you pull out after exchange, buy some Vaseline. Because they will end up shafting you.

martindow

There was a thread a few years ago that may interest you. (Get some coffee and snacks ready as it is very long)

https://forums.moneysavingexpert.com/discussion/1806123