Pressure to exchange on purchase before sale

caughtinthemiddle

I'm in a property chain where my sale is progressing nicely and should be ready for exchange in about 2 weeks. Meanwhile the seller I'm buying from wants me to exchange NOW.

She says she's under pressure from her end of the chain; the estate agent says it's just a matter of trust, ensuring that no one will drop out; but I fear they are trying to force my hand - because if they want to complete before my sale goes through I'll be forced to pull out and will lose my deposit (ie, tens of thousands of pounds).

I'm in the lucky position where I can afford to pay the deposit for the exchange for my purchase without needing to exchange on my sale first - but I would need to complete on the same day as I don't have the money to pay the balance without my house sale money coming through.

I feel as if I should be able to read between the lines here, that there is something else going on that I've not understood.

So, before I take the risk of exchanging on a purchase prior to exchanging on my sale, can you help me? -
- is this normal procedure? or should I run a mile?
- she says the completion date can be flexible as long as the exchange happens now, but how would this be put in the contract if we can't yet fix a date? won't her chain require that the completion date also be fixed?

G_M

caughtinthemiddle wrote: »

- is this normal procedure? No
or should I run a mile? No, just refuse.
- she says the completion date can be flexible as long as the exchange happens now, but how would this be put in the contract if we can't yet fix a date? won't her chain require that the completion date also be fixed?

Completion date is (virtually always) required in the contract.

Sometimes on New Builds, a flexible date is used with a 'complete by' date as developers can't guarantee when the construction will end.

Can you afford to buy without selling? If yes, go ahead and end up owning 2 properties. If no, don't.

Sedge123

Don't. Our solicitor is s good friend and she said there is no way she would let us do this as its too risky.

stator

Do not do this!

SplanK

Agree with the above. Do not exchange at different times, it could land you in hot water.


You need to find out why there is such urgency in wanting to exchange now. Are they. or somebody above buying a new build or from a corporate entity who has imposed 28 day deadline and they are being bullies about it?


Don't be bullied into exchange before you are ready, and express concern up the chain that bullying and trying to force your hand could lead to people pulling out due to pressure forcing the chain to collapse and having to start from "day 1" all over again. Being "pushy" about it is one thing to ensure nobody is dragging their feet, however being a bully about it just is not on and in a lot of cases, these things are outside of your control!

caughtinthemiddle

Thanks, all. This was my gut feeling, but it's nice to be reassured by the weight of many voices.

I suppose I should have asked not 'is this normal' but rather 'is this reasonable'? - if we're ready to exchange then actually it's quite reasonable to expect it - as long as the completion date can be agreed upon. But that's where we'll have a problem, because I can't confirm the completion date until I'm also ready to exchange on my sale!

Does anyone know if there is a form of wording in the contract such as 'on or before' a date in the future that would give me a bit of leeway if the worst should happen and my sale should fall through?

Finally, the part where I feel I'm missing something - if I suggest having an 'on or before' completion date, the rest of the chain would also have to agree to this, wouldn't they?

(Unless she could agree a fixed date with the rest of her chain and hope that I catch up in time?)

Hoploz

Exchanging contracts contractually obliges you to proceed to completion. If you have not exchanged on your sale then you are not in a position to complete on the purchase.

You cannot promise what you may be unable to deliver. Your buyer could toddle off at any point up to exchange leaving you unable to proceed. They will just have to wait for your buyer to catch up.

Think about it - they are not going to dump you as a buyer as nobody new would be two weeks away from exchange.

G_M

caughtinthemiddle wrote: »

Does anyone know if there is a form of wording in the contract such as 'on or before' a date in the future that would give me a bit of leeway if the worst should happen and my sale should fall through?
As I said above, yes it's possible (New Builds often do this) but
a) what if your sale falls through and no new buyer found before the final 'on/before' date? Could you still afford to buy?

b) is there a chain lower down? If your own Completion date is uncertain, so must everyone else's dates be, as most peope are dependant on a sale to afford a purchase. So
i) everyone must agree the 'on/before' date AND
ii) when you finally agree a date (eg 2 weeks before the 'on/before' date) everyone else must then agree that date

Finally, the part where I feel I'm missing something - if I suggest having an 'on or before' completion date, the rest of the chain would also have to agree to this, wouldn't they?

(Unless she could agree a fixed date with the rest of her chain and hope that I catch up in time?)

This is a non-starter.

Stick to the tried & tested process and Exchange on both deals, with the same Completion date, when all parties in the chain are ready.

caughtinthemiddle

Right. Thank you, this is all very clear advice.

My solicitor said the same when I got hold of them today; my estate agent was also a bit baffled as to why the pressure but said it's all about personalities and it could be genuine and not just them being cheeky to me.

I suppose I should never have tried to be so reassuring in saying that it was possible - possible doesn't mean I should, and I am glad to have taken advice!

I will reply to my seller/estate agent and let you know what happens....

Hoploz

It sounds as though you have been speaking directly to your seller, and that's what has got you into this pickle. It's really best if things are done via a middleman, either solicitor or EA backed up through solicitors afterwards. This way these 'misunderstandings' don't happen. Perhaps the EA would have simply told her that it would not be possible due to the rest of the chain, and you wouldn't have had this worry.

(This is how a sale of mine once fell through the day before exchange was due ... Misunderstanding by my buyer resulting in him throwing his toys out the pram)

caughtinthemiddle

Actually it came from the estate agent first, and when I didn't believe him and said I wasn't keen (I thought he was just after his commission) the seller contacted me directly asking me if it was possible to exchange sooner. I then had a further conversation with the estate agent that began 'so you will have had an email this morning....'

So I'm pretty sure no one has misunderstood anything, I'm only worried about the implications for myself, as I know this estate agent is working for the seller and not for me.

Sorry to hear that yours fell through - what was the misunderstanding?