Long delay between offer and exchange/completion

Baxter100

Hello All,

After a little bit of advice/clarification on a situation:

- We saw a house that we like come on the market over Christmas, and visited a couple of times fairly quickly (we are first time buyers, so no chain).
- We put an offer in on a house, just below asking price.
- The vendors considered the offer, however upon reflection decided that they will not be ready to move out of the house until August (after the daughter has finished school).
- They rejected the offer.
- They are obviously in no rush to move, so are leaving the house on the market and hoping to get a market-price offer.
- We are considering making the market price offer.

So a few questions really:

1. Is there any way to ensure that completion happens within 6 months of exchanging (Otherwise our mortgage agreement expires)? Can we get the vendors to sign something to say that they will stick to a completion deadline?
2. Should we try to put off exchaning as long as we possibly can to help with this? How is the best way to go about this?
3. If they pull out after exchanging (another change of mind), what do they actually lose? We know we would lose our deposit if we did so, but they are just selling and moving into a house they already own.
4. Is this a common situation (putting a property on the market, but not wanting to actually move for 8 months)? It all seems a little odd to us.
5. Are there any legal/practical considerations that we should also take account of here?

Thanks in advance!

stator

If you exchange contracts the date is fixed, they can't pull out. If they tried to you would take them to court and force them to sell or pay all of your fees.

It's best to keep the time between exchange and completion short because you never know what will happen and you don't want to be stuck having to buy a house you don't want. eg people lose jobs, people get sick etc. Your mortgage offer could be withdrawn and then you'd be screwed.

Hoploz

They have probably put it on to see what reaction they get, knowing they have to move soon. They might not have been expecting it to sell so quickly, and it doesn't really suit their timescales, and they are a bit surprised. You are going to have to sit this one out for a bit. They might take it off the market with a view to putting it back on in the spring (maybe get a higher price in the new season?) or they might have a good long think and decide to go for it now. In which case a higher offer will swing it.

I had the same thing last year. Saw the house in January and offered. They took it off the market, said they'd put it back on in March. March came and went, it eventually came on in July at 20% higher price. We moved in in September (yippee!) But we are totally skint!

Lots of people have vague ideas about selling, but it's only when you actually get a reasonable offer you realise the implications

Baxter100

stator wrote: »

If you exchange contracts the date is fixed, they can't pull out. If they tried to you would take them to court and force them to sell or pay all of your fees.

It's best to keep the time between exchange and completion short because you never know what will happen and you don't want to be stuck having to buy a house you don't want. eg people lose jobs, people get sick etc. Your mortgage offer could be withdrawn and then you'd be screwed.

Ok thanks. So if we know that they don't want to complete until August, we should look to leave the exchanging of contracts until shortly before the completion? Would this not put as at risk of having someone else come in with a higher offer, or the vendors deciding that they don't want to sell?

LateStarter

From my experience - you need to clarify the terms of your mortgage offer. I found out the hard way that my offer was valid for 6 months from the day the mortgage offer was made - even though I had an AIP and had paid a reservation fee on the product. When, after 5 months, I told the bank I was ready to proceed, they said they didn't believe I'd complete within the 6 month timefame. I had to re-apply and go through the whole application process again. (Lost the reservation fee too).

Best Wishes...

stator

Baxter100 wrote: »

Ok thanks. So if we know that they don't want to complete until August, we should look to leave the exchanging of contracts until shortly before the completion? Would this not put as at risk of having someone else come in with a higher offer, or the vendors deciding that they don't want to sell?

That's the risk I'm afraid. You have to balance out how much you want this particular house vs the risk of exchanging early and not being able to complete.
Personally I would keep looking elsewhere until they are serious about selling.

jonathanrolande

They sound pretty wishy washy, beware.

They may string you along. However if you exchange, they are legally bound to stick to the deal or lose thousands.

Baxter100

Yes all seems a bit odd.... we are treading fairly carefully!

In the event of the seller pulling out after exchanging, is it fairly straightforward process to recover costs? And what specifically would those costs cover?

stator

Baxter100 wrote: »

Yes all seems a bit odd.... we are treading fairly carefully!

In the event of the seller pulling out after exchanging, is it fairly straightforward process to recover costs? And what specifically would those costs cover?

It's not straight forward, you might have to take them to court, but you almost certainly will win. Potentially all of your costs resulting from not buying that house might be claimed. If you have to rent for a while, you could claim that. All your legal fees. If you were going to rent it out, lost rent. If house prices go up and you have to spend more on the house you buy instead, you could claim the difference.

It's not a situation you want to be in though, I'd keep looking for an alternative house until this seller are serious