Selling flat to move to newbuilt

nkomp18

Hello,

I am looking to sell my current property and move to a new built which is going to be ready in October.

My flat is currently on the market and is getting healthy amount of viewings and even had an offer.

I have a lot of questions about how the exchange/completion system works and what must I do to ensure that I will complete roughly around the same date as the completion of the newbuilt.

My current buyer said they are happy to wait till October for the completion, but does that mean they can also pull out at any minute until then? What kind of guarantee can we set so that the waiting period will be binding?

need_an_answer

A buyer or indeed seller can always pull out up to the point of exchange.

I believe from memory it is about 1 in 4 sales that fall through so whilst it is not common,there is always the possibility. that possibility will always increase for leasehold properties which I assume your flat is one simply because of lease or management queries that cannot be satisfied,however also buying a new build may also throw up things that you may not be happy with going forward!

If either party pull out they will face the solicitors costs they have incurred to date in relation to their aspect of the sale/purchase.

speak to the solicitor that you will be using to sell your property and purchase the new one,that is what they are there for,to answer any questions you may have about the specific process

hazyjo

Your purchase is presumably dependent on your sale? I would be selling and going into rented. New builds often overrun, especially if we have a wet/rubbish summer. Most sales take around 3 months. If you get a buyer now, you will prob complete around mid-late May (one of mine took 5 weeks, another took 5 months). You'd have to find a 6 month rental (or one with a break clause) and maybe be prepared to overlap for a month.


tbh it's prob nearer 1 in 3 that fall through. You may well end up in a chain and anyone could pull out in that chain for any reason. You may find your new build is remarketed rather than them wait for you. Not sure what losses you'd incur.


Use an independent solicitor - not one the developer recommends or is associated with. FGS don't exchange unless you're exchanging on your current home at the same time. Your solicitor/lender shouldn't let you anyway.

nkomp18

Can we not exchange relatively early and then complete on a specific date?

(So that they can't pull out at the last minute?)

I have a cash buyer who says they are happy to wait but I want to be sure.

Also, I am assuming until the point of exchange I can keep my place on the market and accept new offers?

I don't want to move temporarily because that is inconvenient and I am lazy. I would rather sell it with a discount to someone who wants to play along with accommodating my laziness.
Unless of course they offer full asking price, in which case, fine, I'll move now

davidmcn

nkomp18 wrote: »

Can we not exchange relatively early and then complete on a specific date?

I think you mean exchange and then complete on a non-specific date i.e. one triggered by your newbuild completion. Yes, you can do that in theory. Depends whether your buyer is content to be tied in like that.

AnotherJoe

Yes you can create a long gap between exchange and completion but there will need to be a "back stop" suppose your new build slips by six months ? At least if they really are a cash buyer then there won't be any issues with mortgage offers expiring. You had better check they really are a cash buyer sometimes people mean they don't have a property to sell rather than don't need a mortgage.

hazyjo

nkomp18 wrote: »

Also, I am assuming until the point of exchange I can keep my place on the market and accept new offers?

Would you want to spend hundreds/thousands on a property only for the vendor to say sorry mate, someone else has offered more three months into the process (even longer if they've been decent enough to hang on). It is likely to take 10 weeks or so to get to exchange. I would never proceed with a purchase unless they agreed to take it off the market. Okay, some do - but more fool them as far as I'm concerned.

nkomp18

Well regarding the last point it works both ways. I am happy to commit to a buyer that I trust, but if it's a buyer I cannot trust it's a different story. Assuming I have no guarantees that they won't pull out at the last minute, then they also have no guarantees that I won't find a more reliable offer.

So hopefully they are happy to exchange early and complete on a certain date.

Also, if the newbuilt is delayed then I will move out at the promised time, that's my problem, not theirs. Not going to mess them about.

nkomp18

I know if it's a mortage buyer then they lose their deposit if they pull out after exchange.
If it's a cash buyer, what happens? Do they still need to put down a deposit? And does it work the same way?

davidmcn

Contract deposits aren't linked to whether or not the buyer is getting a mortgage. In any event they'd be liable for your costs if they breached the contract.

hazyjo

nkomp18 wrote: »

Also, if the newbuilt is delayed then I will move out at the promised time, that's my problem, not theirs. Not going to mess them about.

You won't have any choice but to move out if you've exchanged. Not out of decency - out of your legal obligations. Not a case of 'not going to mess them about', the house will be theirs from completion. You can't stay, even if yours isn't ready. Well, you can, but it'd cost you a bloody fortune.