Commit to sale a year in advance?

waterbaby

Hi all,

An elderly relative of mine lives alone in a large detached house. She is purchasing a flat, and that's going through now.

She can afford (not especially comfortably) to own the flat and the house together, but doesn't really want to have the responsibility of two properties. She's happy with this temporarily though.

A buyer is offering to commit to buy her property, but in a years time to give him time to sell his house. He has suggested that they sign the contracts now, but put this clause in.

I am unsure about this. It is a good thing as if the house is sold, the money will be forthcoming at the end of the year, at a price agreed at the time of signing. And if the house market does fall, she will have her money out.

But he needs the sale of his house to buy this one. If noone wants his house, how do you extract the money from him? If it doesn't sell, surely it can only fall through regardless? And then she would be a year on and back to square one. My mum did say that he would just have to lower the price. But I don't know how far he can go before he can no longer afford to buy this house.

She is seeing the solicitor, and I am very interested to hear his views about how enforceable this would be. I've been careful to stay neutral before I've heard his views.

My first reaction was that this proposal was unsatisfactory as it could hold her back for a year with a house that she doesn't need and an unenforceable contract. But if this proves secure, it would be really helpful.

One more thing - it was built for her family and she has lived in it for decades, and she is keen that it goes to someone she likes. And she feels that this buyer will take good care of it. I know it's sentimental not rational, but it is important to her nonetheless. So she's keen to sell to this buyer if possible.

What do others think?

slater14

I did something similair last year with a commercial property (so slightly different) -

My solictor drew up the contract with completetion to take place on a specified date 8 months ahead. At exchange of contract my solictor recieved a non-refundable 15% deposit and £1,400 for buildings insurance (as I would techinically not own the building although it was still in my posession).

So, to answer your question yes it can be done but I would ensure a hefty deposit to show good faith to complete the transaction in 1 year.

My thoughts at the time was the buyer was trying to hedge his bet on whether prices would rise or fall....I was confident they had peaked last year so wanted to ensure I locked him down in case he saw what was happening nearer to completion - this did happen - but I had a 15% deposit to keep if he didnt complete. He obviously felt it was not worth losing the deposit so with a little toing and froing we completed. Personally, I would have pulled out and lost the 15% as I feel prices are going to sink somewhat lower in the coming months and next couple of years.