4 Months between Exchange and Completion - What should i do?

n15h

Hi all,

I am a FTB currently renting and want to buy my first house (woooo).

I've had an offer accepted on a house that I like and it is £9K below the asking price. However the Estate Agent and Vendor are saying that it will take 4 months between exchange and completion.

This is because of the chain - in total there are 3 houses being sold, and it seems that I am at the bottom of the chain. The vendor can't move into their house until June/July as their seller can't move to their house until that period as that's when the seller's seller moves away (I hope that makes sense?).

Ideally I want to exchange and complete within 1 month so that I don't have to pay rent for 4 months as the mortgage rate I am getting is cheaper than my rent.

I am speaking to my broker today to get advice on the mortgage and also find out how long the mortgage offer will last. I also read that many home insurance providers will not insure a property for such a long time between exchange and completion.

I have asked the EA to ask the vendor to further reduce the asking price by £1K which would then cover my rent. They don't want to do this.

However I wondered if my request is unreasonable, and wanted to ask what others would do in this situation?


Thanks

silvercar

At least you know this from the start, rather than being dangled with false promises.

The length of your mortgage offer is key.

You have 2 options if no one will budge, find another property or be prepared to wait. Some would say that once you have exchanged it doesn't matter if you have to wait as you know the property will be yours.

Rambosmum

To be honest, 6 months isn't that long for a buying process.

Your options are:

1. Give your sellers an ultimatum (move in to rented or I walk)
2. Walk away and find a new house
3. Put up with it

Personally I'd go with number 3.

Our first purchase purchase took 6 months our recent sale took 7 months and most recent purchase 5 months. My friends purchase took 8 months. So waiting until June isn't that unrealistic anyway.

gettingtheresometime

So they want their cake and eat it as well.


4 months may not be a long time to buy a property but I wouldn't wait that length of time between exchange & completion for a non new build.

CommitedToChange

My 'we want a quick sale' sale is currently in month 5. There is no guarantee you'll be ready to exchange in a couple of months so will have a long period in between.

There's is no guarantee another sale on a different property will be faster.

It all boils down to do you want to this property.

ReadingTim

gettingtheresometime wrote: »

4 months may not be a long time to buy a property but I wouldn't wait that length of time between exchange & completion for a non new build.

Why not? Once you've exchanged, you're almost guaranteed to complete so it's simply a case of sitting out the time. The only real issue from the buyer's perspective is the length of their mortgage offer, but I'm sure this can be overcome.

With respect to the OP's dilemma, yes, I appreciate rent may cost a bit more than the mortgage; but if you walk away now, you'll lose all that you've spent on searches, legal fees and the likes - and I suspect that's a larger sum than the additional rent.

So there you have it - suck it up, or threaten to walk. But if you do, be aware that it'll probably cost you more than sitting it out. Your call.

n15h

Thanks all, it's given me something to think about.


I haven't had any of the searches, legal work or surveys done yet. I've obtained quotes for these but that's as far as I've got. All that's happened is my offer has been accepted and the listing has been taken off rightmove/zoopla.


The EA did say that the reason the seller accepted my offer of £9K below asking price is because I would have to wait until June/July. However, I'll talk to the vendor/EA to ask if they're willing to wait until June/July to exchange and complete in a shorter period.


It's just that it's my first time dealing with buying a house and all that's involved, and I thought to ask for advice from others who have dealt with house purchases before on the steps to take. I guess I'm just nervous/anxious with excitement!

searchlight123

n15h wrote: »

The EA did say that the reason the seller accepted my offer of £9K below asking price is because I would have to wait until June/July. However, I'll talk to the vendor/EA to ask if they're willing to wait until June/July to exchange and complete in a shorter period.

that really doesn't make sense. if you really want the house and you have bought it at a price you are happy with then it is more beneficial to exchange early and have a longer completion date as at least you are virtually guaranteed of getting the house. if you delay exchange your sellers may receive a higher offer and either sell elsewhere or ask you to match this new offer. all depends on how the market is moving in your area.
personally, i'd exchange early and wait it out. i do think i would ask for another viewing closer to completion date to ensure nothing has changed in the property whilst you have been waiting.

LittleMrsThrifty

I think you are getting confused between exchange and completion, which is natural the first time you do this.

Once you've had an offer accepted there is a lot of work behind the scenes to make sure that everything is in order. This can take several weeks. Once everyone has done all their paperwork then the chain can 'exchange contracts'. At this point you pay a 10% deposit and you are committed to buying the house. At the same time you usually set a date or a time frame for 'completion'. This is the date you pay the rest of your money and get the keys. Everyone in the chain has to exchange contracts and complete on the same day.

You will probably find that it will take until March or April for everyone to get their paperwork in order. You could exchange then with a completion date set for June or July.

As another poster said the crucial part will be ensuring your mortgage offer is still valid at completion. Normally they only last 6 months which will mean you can't apply too soon.

ReadingTim

n15h wrote: »

Thanks all, it's given me something to think about.


I haven't had any of the searches, legal work or surveys done yet. I've obtained quotes for these but that's as far as I've got. All that's happened is my offer has been accepted and the listing has been taken off rightmove/zoopla.


The EA did say that the reason the seller accepted my offer of £9K below asking price is because I would have to wait until June/July. However, I'll talk to the vendor/EA to ask if they're willing to wait until June/July to exchange and complete in a shorter period.


It's just that it's my first time dealing with buying a house and all that's involved, and I thought to ask for advice from others who have dealt with house purchases before on the steps to take. I guess I'm just nervous/anxious with excitement!

Ah - an FTB. Your query now makes a little more sense, but you've misunderstood the situation, and there probably won't be a 4 month gap between exchange and completion.

The position is that you've been told you won't be able to move in before June/July. While this may seem like a long time off, the average time between making an offer and moving in for a very straightforward purchase is about 3 months, so this is only a couple of months longer than average. No great shakes, and not unsurprising when there's a chain involved.

However, there's plenty to be done beforehand - all of the searches and other legal work needs to be done before you're in a position to exchange contracts. This all takes time, and to be honest, I doubt you'll be moving into anywhere before Easter. The question to ask is how certain June/July actually is, and that will depend on the other people in the chain. However, as no-one can move until everyone moves, what you find is that there's a long period of apparent inactivity, then suddenly everything falls into place, and the thing leaps into action within a few weeks.

So to answer the initial question, yes, the request is unreasonable as you don't seem to understand how the property buying process works, especially in relation to chains. However, it's your money, so you call the shots - if you don't like the timescale or the price and the vendor won't budge, walk away. But if you do, I doubt you'll be in anywhere else that much sooner.

Rambosmum

Searches, all the contract legal stuff, enquiries, further queries, your mortgage offer and surveys will likely take 12 weeks or there abouts. So then you only have 3 months between exchange and completion.

Once everything is done, there is really no reason NOT to exchange, in fact, there's every reason TO exchnage - they can't ask for more money, they can't pull out of the sale, they can't refuse to move out and the moving date is fixed (well they can do those things but there are large financial penalties for them if they do). You would only need to pay for your buildings insurance during that 3 months.