Move from hell, purchasers failed to complete HELP!

cwcw

If there isn't already, there should be completion insurance available when buying. One would think with something quite rare but devastating it was a situation ripe for an insurance product. I'd buy it. The problem with suing someone is if they don't have the money, they don't have the money. You can't bleed a stone. Someone failing to complete may often be down to lack of money.

Hope it all goes well OP, I've been following with interest.

I_have_spoken

I'm surprised the solicitor acting for the buyer at the bottom of the chain didn't insist on 100% of the purchase price to be available in their client account 24 hours before the completion date

Jhoney_2

dktreesea wrote: »

You don't get charged any interest until you draw it down. It's for when your buyer delays completion, not your vendor, i.e. to enable you to proceed with your own purchase.


So with a chain, it seems that there is one buyer delaying completion, somewhere near the bottom of the chain, potentially causing the other buyers above him to not be able to complete.


A bridging loan is to protect you from your vendor's claim, if for any reason you are unable to complete.


Just because someone further down the chain can't complete their purchase is no reason why you shouldn't be able to complete yours.

I understood that, but thanks for the clarity - however all that does is allow you to complete the purchase (which in this case we already know will happen at some point) allowing one to take possession - What it doesn't do is prevent the unexpected and ridiculously high interest rate bridging loan from being a burden without end for the buyer who has no idea when those funds will be coming up the chain.

Precarious in my view and if that was the house buying template, many would opt out. As would I.

I ask again, is there any scenario in which the buyer is protected under the bridging loan idea? so e.g OP is waiting on funds, vendor is not willing to vacate (forget why for a moment) OP has bridging loan...OR
same scenario but vendor wants recompense for delay from bottom of chain issue before completion (again, lets forget that that is not how it works) How much is OP(buyer) supposed to draw down? who pays the BL interest while everyone sorts out what is payable or not?

pinkshoes

Did the sale complete today????

Jhoney_2

Hoploz wrote: »

it's not an 'if,' it won't happen, but it is an interesting idea.

It's got Nightmare.com written all over it.

Jhoney_2

I_have_spoken wrote: »

I'm surprised the solicitor acting for the buyer at the bottom of the chain didn't insist on 100% of the purchase price to be available in their client account 24 hours before the completion date

Ditto this. If the Bridging loan idea was to take hold, imagine all the FTB etc who would unwittingly fall into this minefield through lack of knowledge or end up in hock.

The only 'interest' I see in this would be financial (to the BL Lender) not cerebral or problem solving.

dktreesea

hcb42 wrote: »

Bridging loan sounds like a disaster to me too. What if your buyer never completes - could be stuck for months.

Similar situation happened to my bro in law some years back. Hope OP is now busy moving those cats

I find it amazing in Britain that someone who is trying to buy or sell a house has to be concerned about the actions of someone who could potentially be 5 or 6 sales away from themselves. Someone neither they, nor their buyer, much less the person selling to them, has any contractual relationship with.



Say someone was in a similar situation to the OP, but it dragged on. How is it that the failure of someone at the bottom of the chain to complete their purchase has legal ramifications for the rest of the people in the chain? I don't expect the people meant to be buying my house to make excuses and delay going ahead just because the way they thought the money was going to arrive didn't. I expect them to have a contingency plan in place, - for example bridging finance - to enable them to complete the purchase.


Yes, I agree, this could leave someone potentially paying two mortgages, possibly for an extended period of time. But if they had sold their house and secured those funds prior to buying elsewhere, a lot of the headaches associated with chains would evaporate.


We were in this same situation in another country. The buyer didn't complete on the completion date, but we were unconcerned as to the reason because the penalties for non completion were stipulated in the contract. Does that not happen here?


Buyers had to lodge a deposit of at least 10% at the time of exchanging contracts. In our case, the penalty for delaying completion, for whichever side was delaying it, was $400 a day for 10 days (maximum delay allowable), then the whole of the remainder of the deposit, i.e. forfeiture, in our favour, if by then the buyer failed to complete. There were also financial penalties if we withdrew from the sale, but I can't remember offhand what they were. Their deposit was held in a trust fund by their solicitor.


They were 8 days late, so the price we paid dropped by $3,200. By then the house we were selling had been vacant for a few days. The buyers had already vacated their property and wanted to move in prior to settlement. We refused. Yes, for a few days we were financing both the old and new properties, but the $400 a day penalty (based on a percentage of the sale price) more than covered the deficit.


All the uncertainty that happens here seems to be like a bonanza for lawyers, conveyancers and the like. Even the removalists seem to have their noses in the trough. Note to self: never ever use a removalist who can't store our things in the event of delays moving into the next house.

dktreesea

Jhoney wrote: »

I understood that, but thanks for the clarity - however all that does is allow you to complete the purchase (which in this case we already know will happen at some point) allowing one to take possession - What it doesn't do is prevent the unexpected and ridiculously high interest rate bridging loan from being a burden without end for the buyer who has no idea when those funds will be coming up the chain.

Precarious in my view and if that was the house buying template, many would opt out. As would I.

I ask again, is there any scenario in which the buyer is protected under the bridging loan idea? so e.g OP is waiting on funds, vendor is not willing to vacate (forget why for a moment) OP has bridging loan...OR
same scenario but vendor wants recompense for delay from bottom of chain issue before completion (again, lets forget that that is not how it works) How much is OP(buyer) supposed to draw down? who pays the BL interest while everyone sorts out what is payable or not?

The vendor is only entitled to recompense from the person buying his property, i.e. if his buyer delays. I don't see the necessity for his buyer to delay at all. He should have a contingency plan in place, in case the sale of his own property is delayed.


What I don't get is why aren't penalties for non completion, be it by the buyer or the vendor, stipulated in the contract? Nor why there isn't a substantial deposit in the solicitors trust fund, for the buyer, that the vendor can then draw down on if the buyer fails to complete.


In the scenario you describe, where the vendor is delaying completion, the buyer wouldn't need to draw down on their bridging loan. The contract should stipulate what penalties would then come into play, i.e. how much less the vendor would eventually receive - or what penalties he would have to pay, for not going ahead. And the method this would take in the event he didn't cough up, i.e. a charge over his property.

sinizterguy

dktreesea wrote: »

I don't expect the people meant to be buying my house to make excuses and delay going ahead just because the way they thought the money was going to arrive didn't. I expect them to have a contingency plan in place, - for example bridging finance - to enable them to complete the purchase.

You can expect. That won't change a thing.

hcb42

I dont think the average buyer has deep pockets.

Plus we already know this is exceptional circumstances

Even our OP here who is talking about houses with a value most of us can dream of - he has still admitted he doesnt have suitcases of cash with £17K hanging around

I have bought and sold a lot more than most. Risks can be mitigated without committing to expensive loans should the worse happen. not all chains are that long either, most of mine have been 2-3 deep max.