Early exchange because vendor buying new build

alex_lee

Does anyone have any experience with buying from someone who is buying a new build ?

I am a first time buyer and just had an offer accepted. However , the vendor is trying to get us to do an exchange the contracts early - probably because they have a deadline to meet with the builder.

There a few problems and risks I can see with this
- The suggested exchange date seems far too ambitions (3 weeks ?) I will still need to apply for mortgage and do the survey and searches
- I heard that new build frequently gets delayed, some for months - How do they set the completion date ? I also heard it is a bad idea to go for an open ended completion date on exchange.
- A long gap between exchange and completion is a big risk as many things can happen during this time (jobs, mortgage offer, economy,illness etc..).

Any experience or advice appreciated!

anselld

Do not exchange until both parties are ready to agree to a fixed completion date. I am sure your Solicitor wouldn't allow any other option anyway.

AnotherJoe

I agree the exchange date is beyond ambitious into "not gonna happen" territory.
They may be looking to exchange quickly because of builder, or perhaps to get sale locked in. But your explanation more likely.
And yes, with a new build, if the finish date is several months away, then completion could be a very movable and uncertain date and you need to be happy to wait around.
And of course you are correct a lot could happen in that time.
I'd suggest first step is get an idea how far off being finished the new build is. Are they laying the carpets next week or is the ink still drying on the blueprints ?

nkbish0p

I was in the same position. Deadline to exchange was right at the start of Feb. The developer pulled out of selling to my vendor once the deadline passed. Thankfully my vendor found another property. I am still waiting to exchange!

danslenoir

Absolutely do not even consider an open-ended completion date.

What happens if you exchange now, and by the time completion comes around (which could, as you say, be delayed for months and months) your mortgage offer has expired and you can't get a new one, or there is a substantial change to your personal circumstances that would cause your lender to withdraw their mortgage offer? You will be absolutely stuffed.

IMO, as it is the vendor who has decided on a new build, they should be the party to bear the risks associated with that decision, not you.

hazyjo

Are you using your own independent solicitor, or a solicitor 'recommended' by the developers/builders?


If the latter - tread carefully. You really want someone to have YOUR best interests at heart.


As above, don't consider an open-ended completion and don't exchange without everything being ready to complete. You don't want to find they extend the date and your mortgage offer expires. Some are only valid for 3 months, others more like 6. The average purchase takes 3 months. Just be careful and take advice from your (independent) solicitor.


Jx

marksoton

New build developers usually get people to exchange early on. Maybe your vendor is under the impression that's the way all property purchases are conducted.

The time frame isn't achievable anyway but no chance would i agree to this stipulation. You and your solicitor need time to do the proper due diligence on the property.

mark5

Both my house purchases have had 2 weeks between exchange and completion. 4 weeks is probably the maximum I would want. Look out for yourself not your vendor and don't be bullied by the estate agent either, bigger bull**itters than Arthur Daily.

pinkshoes

DO NOT exchange without a fixed completion date.

If the build is delayed (likely!) and your mortgage offer expires, it could leave you unable to complete.

You might need to suggest the vendor moves into rented if their newbuild gets delayed.