Why exchange and complete on same day?

sleepymans

Hi all
After many months we are ready to exchange contracts on a BTL we are selling.
The deposit is in the hands of the solicitors and both sides have agreed everything is in place to complete on 21st.

My sol tells me he doesnt exchange and complete on the same day - he wants a week in between. Quite frankly so do I.

However the buyers solicitor wont budge.

What have they got to gain from this?

I want the certainty of exchange so I can deal with all the little things that need doing before completion and vacation.
Although the property is empty there are meter readings and cleaning and stuff to do which I dont want to do until all is legally confirmed.

As I say, I will be "on tenterhooks" waiting up to the last minute - and Fear they may try a "gazunder" if we dont exchange until the last minute.We have accepted a low offer as it is.

What can I do to get the exchange this week?
(I dont want to delay completion as I'm off on holiday on 22nd)

Any ideas/comments????

Debt_Free_Chick

Usually, it's because the buyer is getting a 100% mortgage so there's no deposit for you when you exchange.

I take your point about making arrangements in between exchange & completion, but all those things can be done in advance even if you e&c on the same day.

You need to weigh up what's important - exchange, so you have a contract in place, but with no deposit if things go t!t$ up? Or delay exchange and lose your buyer.

sleepymans

The buyer has already paid the deposit - it isnt a 100% mortgage situation.

And in any case I would have agreed to waive a financial deposit in order to get the contracts exchanged now.

As you realise the exchange is the legally binding bit and it is that they are delaying. I dont want to delay I want to do it now with exchange a week later. It is what both my solicitor and I want.
I cannot bear another 10 days uncertaintly unless there is a really good reason for it.
What has the buyer to gain by delaying until exchange? I still cannot see - unless its to gazunder us at the last minute.

(I have spoken to the EA who wont get involved!)

nobblyned

Aside from the gazundering you mention I can't see that they have much else to gain. Does any of their other behaviour so far indicate that they might try this sort of thing on?

System

I see no reason why exchange and completion can not be on the same day.

I am hazarding a guess that the gap between exchange and completion originated from the buyer providing the deposit and once that is paid then the solicitor would get the mortgage money transferred.

Providing all the finances are in place then both bits can be done on the same day.

Our joint exchange and completion occurred a day early as both our mortgage lender and solicitor were playing safe. Solicitor asked for the money a day earlier than needed and mortgage lender sent the money a day earlier than that.

Debt_Free_Chick

I don't understand - they've paid a deposit but you haven't exchanged?

I've not come across that situation before. I don't think the deposit is worth anything unless the contracts have been exchanged What does your solicitor say?

I agree - I can't see why they won't exchange. Perhaps they've just seen another property and might back out?

I think your Sol has to hand them an ultimatum - exchange now, or you'll put the property back on the market. However, only use this "threat" if you are actually prepared to carry it out - as they may call your bluff.

Tell your EA too ..... the thought that they might lose their commission might just shock them into getting involved!

Doozergirl

If you don't live there and it is chain free, then I wouldn't worry too much; if they did try it on, then I'd tell them, in simple terms, where they could put any revised offer Apart from obviously being messed around and lied to, at elast it will not affect your immediate circumstances.

However, it is is your home or you are using the money to purchase a home as part of a chain, then unless they were FTBs with a 100% mortgage, I would point blank refuse to exchange and complete on the same day.

daphne_descends

As it's a BTL you're selling I presume that if they did pull out, it would be annoying, frustrating etc but not loaded with problems like it would if you were in a chain - so what are they trying to achieve?

Refuse and if they want to pull out, so be it.

Richard_Webster

From the buyer's point of view as far as deposits are concerned it doesn't very much matter. If the seller is prepared to go ahead and exchange without a deposit then that's fine.

From the seller's point of view if he is not buying anything it doesn't matter so much, but if he is buying then he may actually be safer to exchange and complete on the same day if there is no deposit. The danger for the seller is that if he accepts no deposit on his sale his seller won't necessarily do so, so he can end up forking out a few thousand for a deposit which could be lost if the buyer lets him down and doesn't complete.

If you are a buyer and you have exchanged contracts with no deposit then although it is legally binding, if the worst happened you could simply disappear and the seller would be left with being able to sue you but with no likelihood of actually recovering anything. However the poor seller would have a house that his seller could fix a judgement on and/or keep any deposit paid by the seller if the deal did not go through after exchange.
So it is usually the seller that wants to exchange and complete on the same day.

A more likely reason why the buyer's solicitor doesn't want to exchange until the completion day is that he doesn't trust his mortgage lender. Some of the more obscure lenders are a complete pain to deal with and cannot be relied on the provide the money on time.

A faxed Certificate of Title to people like the Halifax, Nationwide, C&G and loads of other well known lenders will produce the money on time 4-5 working days later. However some of the funny ones require the hard copy before they will do anything. Say we are on a Friday and we want to complete the following Friday so he really needs the money electronically transferred by Thursday (Day 5). The solicitor sends the hard copy on Day 1 (Friday) and rings up the next day (Day 2 - Monday)) to see they have it. If it has arrived then he asks whether the money will come when requested. Gets told that it will be put before the "underwriter" who will look at it as soon as possible. Solicitor phones next day (Day 3 - Tuesday) : "Has the underwriter looked at it yet?" "He's not in today..." "Well, put it before someone else..." " I can't do that..."

Solicitor phones next day (Day 4)"has the underwriter looked at it yet?" "It's with him at the moment..."

There are various combinations of what can happen next, one example is:

Late in Day 4 a fax is sent to the solicitor saying that his client has not signed the lender's form XQZ34. Solicitor phones and asks where it says in the lender's explanatory material that the client had to sign form XQZ34. "Its our requirement...We'll fax you a copy but we need the hard copy back signed by your client before we can send the money..." Solicitor gets cross: "Your office is the other end of the country from my client, who does not live near me. How is he supposed to get it to you in the next day?"
"Don't know, but we can't send the money without it..."

Solicitor phones client and asks him to come to his office as soon as possible. Earliest client can come is afternoon of next day (Day 5 - Thursday). Client appears and signs form which is then sent by courier (at extra cost) so lender has it first thing Day 6.

Day 6 - Friday Solicitor phones and asks when money will be coming. "When we have Form XQZ34." "You've got it...it was delivered to you at 0815 this morning." "It's not on our system..." (We hope that eventually the money comes through later that day - only after the whole chain is kept waiting with their removal vans...)

And so it goes on. You can see that if the client hadn't been able to come in or the underwriter sat on the file for longer the whole process would have not produced the money in time...

This story is made up, but but I am sure that most conveyancing solicitors will witness to having had similar experiences with some lenders. If they have to go through that kind of nightmare they cannot be sure the money will arrive early on the day of completion, so they won't exchange until they know they are going to get it.

Even with quite mainstream lenders if completion is wanted say on a Friday with exchange being proposed on a Monday many solicitors will not exchange until they have checked the money is coming. Sometimes it is better to propose a slightly later completion date and then there isn't as much panic about making sure the money comes through...

brock-cruse

Hi
What Richard says happened to us. My buyers sol absolutely refused to exchange contracts until all the money for the house purchase ie the mortgage was with her. This is because my buyers mortgage was with a well known company that is known for delays in paying out monies. Apparently it has be known for them not to supply money on completion day! Hence even though my buyers sol requested the money a week in advance of wanted completion day(she even told them that completion day was the day before it actually was to ensure that she got the money on time)....it wasnt until 3.30pm on supposed completion day that the money arrived! As it was we made that exchnage day and kept to completion the day after (hope you are following this!). However if it had been our completion day we would not have been able to move as her sol only got the money then and it had to be passed up the chain. All this happened on a wednesday never mind a busy friday. Must admit it was a very nerve wracking exprience having exchnage and completion so close tog. Forutunately had an understanding removals firm.

sleepymans

Thanks Richard and Brock-cruse. This does at least give me a sensible reason why they are insisting on it being the same day, However it does worry me that the money wont turn up on that day anyway and so we will in effect get no prior notice whatsoever, just because the bank are inefficient!
If you think that through how could someone deal with removals, child-care, animals, and just "life"? Just at the whim of the bank?
As it is, exchange/completion could be delayed past 21st and I'll be away on holiday and therefore my only realistic option is to delay until I get back.
This really is ridiculously inconvenient.
I feel like telling the buyer to "$0D off" if they cant exchange and complete to my convenience. Why am I the one who has to jump through the hoops to his tune?

p.s. It'll be a Nat West mortgage - what are they like?