House sale falling through after exchange of contracts

mrschaucer

"She needs the mortgage and as its 100% retained until she does the work - we are all stuck"
No you're not. You haven't exchanged on your purchase yet, I understand, SO DON'T, otherwise you'll be in deep doodoos. Your solicitor will give your buyer a Notice to Complete, which she must do within a certain number of days. If she fails, then you simply rescind the contract with her, keep her deposit, and sell to someone else. Your sellers might even wait for you if you're very lucky.

Daletoon7

Thanks guys for your advice. I am just getting updates atm from the EA but have contacted my solicetor and will only act on her advice. Just a crap situation to be woken up with. Will have to wait and see how it pans out

slowpoke_rodriguez

Daletoon7 wrote: »

Apparently the mortgage offer dated the 17 nic stated they needed to do some work on the kitchen and bathroom to be able to rent it out. They have had months since then to do this work yet wait until after exchange to spot this mistake and then try and come to a solution. We are in a chain which had the buyer sadly pass away at the top of the chain so waited 6 weeks for probate (plenty of time to do the work) and yet still the exchange when the mortgage is 100% retained until the work is done. How did no one notice this - it's not just the financial issues - it's the stress and emotions it puts you through

I don't get this. Why would your buyer do work to your house before they've bought it?
Am I missing something?

Hoploz

It sounds as if your buyer needs to show funds are available to refurb. Hopefully that will just mean showing the lender proof of these funds, then they can go ahead following a 24 hour delay.

Sounds very odd to be retaining like this if the property is currently lived in and in working order, if not in A1 condition.

if you haven't yet exchanged on your purchase (lucky you!) then you don't really have a problem other than a waiting game. Your buyer could reapply for a new mortgage from a different company, for example.

If the worst happens and your buyer cannot secure funds to buy then you still have your home to live in, and have not committed to buying another property ... yet.

Good luck.

G_M

No sounds to me like the lender expects the buyer to Complete using alternatie funds/loan.whatever, then do the work, and then they'll release the mortgage.

If what OP says is in fact true.

Did I miss that you have not yet exchanged on your purchase? If so, no big issue.

* instruct your buyer to Complete
* do NOT permit access by builders etc
* if buyer fails to Complete, keep their deposit plus claim costs
* find new buyer

sorted.

Daletoon7

We have exchanged- Last week. Their end missed the 100 % retention of the mortgage offer leaving us delayed

Ozzuk

Just take a breath Daletoon7 and try and clarify your actual position. G_M is always spot on with his advice, the key question is have you exchanged on the property you are buying? If you haven't, then don't.

You'll get a nice lump of cash (deposit/expenses) from your failed buyers and hopefully the people you are buying off will wait.

Daletoon7

The whole chain has exchanged - including me and my partner on our new home

Out,_Vile_Jelly

This sort of situation AFTER exchanging is very rare.

You need to be 100% sure that you have "exchanged" in the accepted legal sense. If so you should be speaking to your solicitor (who may well never have encountered such a scenario) and clarifying what happens next. There are serious financial consequences for your buyer.

I really don't understand the stuff about funds for doing up the bathroom being a mortgage condition; I would get your solicitor to clarify this ASAP.

marsman802

Whilst very rare I guess you really want to be at the bottom of the chain in these situations...
Does anyone ever request an exchange on their sale before exchanging on their purchase?