Extended period between Exchange and Completion

Ara1985

da_rule wrote: »

Yep



Nothing has to be on the same day. In a normal chain you would complete on the same day as person A would need to move into house B and person B would need to move into house C etc.

As for exchange, that just happens when it happens. You can exchange and complete on the same day if needed. But there is no requirement for all people in a chain to exchange at the same time.

Thank you I understand now.

eddddy

da_rule wrote: »

As for exchange, that just happens when it happens. You can exchange and complete on the same day if needed. But there is no requirement for all people in a chain to exchange at the same time.

That's a very misleading thing to say.

It people in a chain all want to complete at the same time, it would be reckless madness not to exchange at the same time.

6am

What does your mortgage offer say about the conditions under which the bank can withdraw the offer before they release the funds for completion? For example my offer says "we can withdraw the offer where any information we have obtained materially changes and such change affects our decision to lend".

How secure is your job? Are you prepared to bet your deposit (30K I believe) that you will not lose your job during these 4 months between exchange and completion?

Ara1985

6am wrote: »

What does your mortgage offer say about the conditions under which the bank can withdraw the offer before they release the funds for completion? For example my offer says "we can withdraw the offer where any information we have obtained materially changes and such change affects our decision to lend".

How secure is your job? Are you prepared to bet your deposit (30K I believe) that you will not lose your job during these 4 months between exchange and completion?

I don't have the formal offer yet I have decision in principle. Valuation was put on hold when I was told the vendors property wasn't going to be completed until July as I wasn't sure how I wanted to proceed.

It will actually be 3 months if they accept to complete on 1 June considering we are entering into Feb and my mortgage broker said he will ensure the exchange doesn't take place any earlier than 28 days by delaying the process so that will take us up to beginning of March.

How 'secure' is any job? I'm working for a reputable company that isn't about to go bust and I'm not expecting to be sacked but who knows what can happen anything is a risk even if completing in a normal time frame.

AnotherJoe

Ara1985 wrote: »

I don't have the formal offer yet I have decision in principle. Valuation was put on hold when I was told the vendors property wasn't going to be completed until July as I wasn't sure how I wanted to proceed.

It will actually be 3 months if they accept to complete on 1 June considering we are entering into Feb and my mortgage broker said he will ensure the exchange doesn't take place any earlier than 28 days by delaying the process so that will take us up to beginning of March.

How 'secure' is any job? I'm working for a reputable company that isn't about to go bust and I'm not expecting to be sacked but who knows what can happen anything is a risk even if completing in a normal time frame.

Theres a lot more risk if its 3 months rather than a week between exchange and completion.

Though thats not the major issue.
The major issue will be creeping delay. House delayed by a couple weeks. Then another couple. Then a month, Then you time out. In the meantime a couple really nice houses you could have bought by then have come and gone

If your mortgage offer times out how confident are you that you can get a new one?
Because Ive seen a couple of posters here who this happened to , and were on the hook for £10k's because they had exchanged, timed out, and had no remedy.

Maybe it just takes one 1/4% rate rise to drop your mortgage below the level you need for example?

Its pretty much you taking all the risk here. I hope the house is worth it.

Ara1985

AnotherJoe wrote: »

Theres a lot more risk if its 3 months rather than a week between exchange and completion.

Though thats not the major issue.
The major issue will be creeping delay. House delayed by a couple weeks. Then another couple. Then a month, Then you time out. In the meantime a couple really nice houses you could have bought by then have come and gone

If your mortgage offer times out how confident are you that you can get a new one?
Because Ive seen a couple of posters here who this happened to , and were on the hook for £10k's because they had exchanged, timed out, and had no remedy.

Maybe it just takes one 1/4% rate rise to drop your mortgage below the level you need for example?

Its pretty much you taking all the risk here. I hope the house is worth it.

It won't delay and delay, thats the purpose of setting a date for completion and having a legally agreed written document that says they complete and move out on the day regardless of their property being built or not.

Gigervamp

If their new build is ready only a few weeks after your completion date, they're not going to go into rented, as the tenancy will be for 6 months.

Ara1985

Gigervamp wrote: »

If their new build is ready only a few weeks after your completion date, they're not going to go into rented, as the tenancy will be for 6 months.

Well then they need to find another buyer who's ready to exchange and willing to wait until potentially august, within the next week before they loose their reservation fee on their new build.

lush_walrus

It doesn't sound like you are the right buyer for the vendor. Unless you are in an area where flats do not sell, they are unlikely to put themselves into a situation that is uncomfortable for them such as you suggestion that they complete regardless. I presume from your threats you can buy another similar flat that you will be happy with at ease?

With regards to your vendors deadlines from their developer, if your sale does not carry through they will negotiate with the developer a new exchange date, despite the 28 days unless there is a massive waiting list the developers generally accepts a delay to exchange within a reasonable period.

New builds generally set a rolling completion date not a fixed date you are looking for, your vendor will be advised of this by their solicitor. The below link will be a useful link to educating yourself on the process of new build.

http://www.blasermills.co.uk/why-is-conveyancing-different-for-new-build-homes/

AnotherJoe

Ara1985 wrote: »

I am confused...Can they move out of the property I am buying before theirs is fully complete or not?

Before their new build is complete, yes. They could sell the property to you (they complete with you) and move into rented without completing on their onward new build purchase. They would split the chain in two.

What happens with their new build isn't your concern from then on.

Ara1985 wrote: »

So they move into rented, I move into the flat but they still own it!?

No, as above, you would complete with them, you would own it. The chain has been split.

They can then wait until the cows come home to complete on their new build for all you care.

This isn't the first time here that someone buying a new build expects everyone else in the chain below to wait for them. In your case its straightforward since its just the three parties in the chain. In some cases there might be several below.

Whether this works for them, I dont know, what I do know is that in your situation I wouldnt take the risk. Even if its low odds, its many tens of thousands of pounds you are risking.

You could certainly just wait for them, its the exchanging I wouldn't do.