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Is it possible to insure against loses due to inability to complete after exchange?
Comments
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Because they are responsible for organising the process in a such way where that event (me losing job) had large financial and legal consequences. If I want to exchange and complete at the same time then I cannot lose job between exchange and completion. However if they insist that we have a delay between exchange and completion it is only fair that they should be prepared to pay for consequences.
Why? You're the one with the potential problem not them.
Exchange and completion is negotiated. They may have reasons for a gap. They're just as entitled to dictate dates as you are.
You really are living in cloud cuckoo land.0 -
I agree with you. But why should not the risk be a matter of negotiation as well? If they say they want 2 months between exchange and completion then I might agree if they are prepared to take on my financial risk. Otherwise the deal is off, that my persuade them to reduce the time.Exchange and completion is negotiated.
When we bought our first house 11 years ago we insisited on a 2 months delay between exchange and completion. There was no chain, the vendor was a company, I believe a delay was not a problem to anybody. We had a 2 months notice on our rent contract and did not want to pay rent and mortgage at the same time. At the time nobody highlighted the fact we potentially have a huge risk. The time between exchange and completion is discussed only in terms of convenience.
[rant : on]
On a general note why do we have such laws that force people to be dishonest. The buyer is committed from the time of exchange, but the bank is committed from the time of completion. A simple change that will require the bank to be committed from the time of exchange if the exchange and completion say a week apart will remove a huge uncertainty.
[rant : off]0 -
I agree with you. But why should not the risk be a matter of negotiation as well? If they say they want 2 months between exchange and completion then I might agree if they are prepared to take on my financial risk. Otherwise the deal is off, that my persuade them to reduce the time.
Because it's simple contract management. And the golden rule is you don't accept risk if you cannot control it. And if the deal is off YOU pay the price.
When we bought our first house 11 years ago we insisited on a 2 months delay between exchange and completion. There was no chain, the vendor was a company, I believe a delay was not a problem to anybody. We had a 2 months notice on our rent contract and did not want to pay rent and mortgage at the same time. At the time nobody highlighted the fact we potentially have a huge risk. The time between exchange and completion is discussed only in terms of convenience.
Then you need better representation.
[rant : on]
On a general note why do we have such laws that force people to be dishonest. The buyer is committed from the time of exchange, but the bank is committed from the time of completion. A simple change that will require the bank to be committed from the time of exchange if the exchange and completion say a week apart will remove a huge uncertainty.
Because it's your risk not theirs. See above.
[rant : off]
Look it's quite simple. Either you're confident in the sale or you're not. Your plan to shift risk isn't going to happen. End.
I have a risk meeting this week with my client, what they've asked for is unacceptable. Because there's too many things out of my control. No way will i'll be signing up to their proposals. It'd be commercial suicide. By Thursday evening that risk register will look a lot different!0 -
You are either neurotic or taking the ssip, I can't decide which.Because they are responsible for organising the process in a such way where that event (me losing job) had large financial and legal consequences. If I want to exchange and complete at the same time then I cannot lose job between exchange and completion. However if they insist that we have a delay between exchange and completion it is only fair that they should be prepared to pay for consequences.I came into this world with nothing and I've got most of it left.0 -
Because they are responsible for organising the process in a such way where that event (me losing job) had large financial and legal consequences. If I want to exchange and complete at the same time then I cannot lose job between exchange and completion. However if they insist that we have a delay between exchange and completion it is only fair that they should be prepared to pay for consequences.
Oh, dear. Failure to complete after exchange has much bigger financial and legal consequences than deciding not to go ahead before exchange. And I'm not sure you are well enough informed about the usual house buying process. For example, normally there is four weeks between exchange and completion - so everyone can get their practical arrangements sorted out, removal company, day off work etc. Not always, but usually. A period of time between exchange and completion is not a delay at all, it's usual practice. And, no, the others in the chain are not responsible at all for making arrangements to account for the risk of you losing your job.
If exchange and completion do not take place on the same day then every single person in the chain is theoretically at some small risk of losing their job between exchange and completion, or of something else untoward and unforeseen happening that might affect ability to complete. But the risk is tiny. Unless, of course, someone in that chain is going ahead in the full knowledge that the risk to their security of employment is more likely, much more likely - or even a certainty.
OP - your posts and questions strongly suggest that you have some real tangible concerns about your employment. It's your responsibility, if that is the case, to consider the likely impact on others in the chain - and yourself - if your mortgage lender were to do a check between exchange and completion and you have indeed lost your job by then. Maybe you're willing to chance it, your decision.
Have you checked the terms and conditions of your mortgage offer yet? What's in there about conditions under which the lender will withdraw the mortgage offer? Do yourself a favour and read it.0 -
If the timeframe between exchange and completion is short (say one week) I would like the bank to send money to the solicitor in advance before the exchange takes place? Is it possible? I will then have a small assurance that it will be more difficult for the bank to withdraw from the deal.
No, lenders don't like money sitting in the solicitor's account for that long, and anyway it doesn't matter where the money is - the lender is entitled to demand the funds back any time before completion.0 -
There is no link between my question and my employment situation.
Look, I have a life insurance, but I am not aware of my imminent death, I have a building insurance, but I do not expect the building to collapse soon. These insurances are in place not because I think that event is likely, but to protect me and my family against devastating consequences in the case this unlikely event occurs.
I have identified the risk that the lender can refuse to release the funds after the exchange with devastating consequences for myself. I want protection against that risk for piece of mind, not because I think it is likely to occur. I am surprised that the financial industry did not come up with the solution to mitigate that risk and everybody are happy to accept the status quo.
My other suggestion to pass the risk on the other party is clearly not acceptable to a lot of people. I apologise if my suggestion offended you.
As it stands it is clearly not possible to mitigate that risk and my only option is to negotiate as small timeframe between exchange and completion as possible.
Thank you all.0 -
I am surprised that the financial industry did not come up with the solution to mitigate that risk and everybody are happy to accept the status quo.
Such insurance would be very expensive, and for something with a very low probability. As I said one in 50 or so chance for the small proportion of those moving who actually get made redundant in that critical week. That's most likely why no one offers it.
That doesn't mean people are "happy to accept the status quo" it just means they are being realistic there's no way to ameliorate it at realistic cost, and it's obviously not possible to pass it up the chain.0 -
There is no link between my question and my employment situation.
Look, I have a life insurance, but I am not aware of my imminent death, I have a building insurance, but I do not expect the building to collapse soon. These insurances are in place not because I think that event is likely, but to protect me and my family against devastating consequences in the case this unlikely event occurs.
I have identified the risk that the lender can refuse to release the funds after the exchange with devastating consequences for myself. I want protection against that risk for piece of mind, not because I think it is likely to occur. I am surprised that the financial industry did not come up with the solution to mitigate that risk and everybody are happy to accept the status quo.
My other suggestion to pass the risk on the other party is clearly not acceptable to a lot of people. I apologise if my suggestion offended you.
As it stands it is clearly not possible to mitigate that risk and my only option is to negotiate as small timeframe between exchange and completion as possible.
Thank you all.
Dear lord. Just don't buy.
I seriously hope i'm never your vendor.0
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