Confused FTB....conditional exchange - good or bad?

JustJess

Hey everyone,

I wondered if you could offer some advice. Here is my situation:

I'm a FTB buying a flat which currently has a tenant in situ. The tenant is currently in the process of buying a flat nearby and is hopefully due to move out in a few weeks (all being well). His two months notice to quit ends on the 1st March, so he has to be out by this date regardless.

I am currently being pressured by the vendor and their solicitor to do a conditional exchange of contracts, being told that if I don't do this by next week then they will remarket the property. They are absolutely adamant that they will remarket if I dont conditionally exchange.

My solicitor is obviously advising me not do this until the property has been vacated and I have been to inspect it due to the risk of the property not being to an acceptable standard. I met the tenant when I viewed the property - he seems reasonable and was aware that he would have to move soon. The likelihood that he would leave it in a state seems unlikely.

I have no clue what to do next as I'm feeling very pushed by the vendor, and am not sure what risks (apart from the one above) a conditional contract would leave me with i.e. would I be able to walk away with my deposit if for some reason he doesnt move out? What other risks are there for me? Im just worried about what the consequences are for me if something goes wrong.

Thank you in advance! I know this question has been asked hundreds of times - Id like some impartial advice on my own situation:o

Better_Days

Not a daft question at all.

I've not heard of a conditional exchange. What are the condition(s) and whom are they upon?

Just because tenant says he will be out by 1 March doesn't necessarily mean that it will happen - his purchase may fall through or be delayed.

Or he may go and leave the property in a pickle. Much harder to sort out between exchange and completion - there is a thread on here about a flood in a property between exchange and completion.

What is your position regarding living arrangements - are you in rented now?

JustJess

I am living with my parents atm.

The conditions are a 3 month Long Stop Date (from contract date), with the Unconditional Date being either 1st March or 'the date that I confirm vacant possession has been obtained by the Seller'.

According to the vendors solicitor, all the risk will be transferred to them by undertaking a conditional contract. Unsure what that 'risk' is though - will be meeting with my solicitor next week to clarify the 'legalese' of the contract so hoping this will be cleared up.

Basically my options are:

Exchange with completion date to be after the notice to quit has expired

OR

Exchange on a conditional basis now with the contract being unconditional once the tenant has moved out.

pinkteapot

Option 3: call their bluff. How likely are they to both find another buyer and get them to exchange before you exchange when the tenant moves out?!

Exchange once tenant has gone and you can check the property's OK. Offer to have a short period between exchange and completion if you don't mind?

When_the_going_gets_tough

I would never exchange until you can physically verify that the property is empty of tenants. Do not be bullied - call their bluff and listen to your solicitor - thats what you are paying them for.

JustJess

Thanks Pink Teapot and When The Going Gets Tough - this echoes what I was thinking.

They have said they will remarket and inform the new buyer that they must exchange by 1st March (!!) which even I know is doable but unlikely! Hadnt considered the short time between exchange completion though.

And I definitely will not be bullied - wanted to get it clear in my head what the risks are etc to make sure I am doing the right thing for me.

Hoploz

I agree with everyone else ... It is normal to only exchange after the tenant has already left.

If you go with the conditional exchange then what happens if he decides to stay beyond the date, digs his heels in and sits there waiting for court orders etc? It could be months and months. It is unlikely to happen, but this is the whole point. You should wait.

Anyway, they might not get any other buyer, let alone someone who can move with such a short timescale. They are trying their luck, try and hold your nerve and not fall for it. They would be chucking in the probability of exchange and completion both happening on 2nd March, which you would be in a position to do.

G_M

Do not even THINK of any kind of commitment till the tenants have left.

If the seller wants to re-market the property, so be it - he will find the next buyer is smarter than you and will not even get as far as you have until the tenants leave.

Tell the seller you are interested in the property, at £x, and once the tenants have left you will re-view, check the property, and then, subject to condition at that time be happy to Exchange contracts.

Until then, you will not be taking any further action on the purchase (ie you will postpone survey etc till then), and may view other properties in the meantime.

I cannot stress strongly enough that you should not waste time or money on this purchase till the property is empty. And certainly not exchange anything, conditional or otherwise.

martindow

Are you getting a mortgage? They may well not agree to exchanging unless there is vacant possession, so this scheme could be a complete non starter.

pinkteapot

JustJess wrote: »

Thanks Pink Teapot and When The Going Gets Tough - this echoes what I was thinking.

They have said they will remarket and inform the new buyer that they must exchange by 1st March (!!) which even I know is doable but unlikely! Hadnt considered the short time between exchange completion though.

So they think someone will view, offer, and exchange within five weeks? :rotfl:

I know that's theoretically possibly but it's exceptionally unlikely.

Go back to the EA. Say you will view as soon as the tenant leaves and exchange immediately if you're happy with the property. Say you'll ensure everything is in place with your solicitor to exchange as soon as that viewing has taken place. Reaffirm that you're committed to the property. As I said before, if you don't mind having a short period between exchange and completion, offer to do that too.

Then sit back and see if they actually re-market. I find it unlikely. But don't panic if they do.