Selling flat to move to newbuilt

Richard_Webster

Builder will want you to complete about 14 days after they have officially told you the house is finished. They may agree a "backstop"date some months after their estimated date to coincide with when your mortgage offer runs out - make sure your solicitor asks for this. If they can't complete by then the contract ends and they give you your deposit back.

When I was in practice and someone was selling and buying an as yet uncompleted new build the first thing I did was warn them they might have to move out in order to retain their buyers. The ideal is to tie your buyers to the same date formula as you have with the builder - but as others have said this could mean a delay well into 2019 and most buyers won't agree this. You have to assume the builder will be late.

Your solicitor should have warned you this sort of thing could well happen and asked if you if you had friends/family with whom you could stay for a few months.

Usually your buyer will not agree to sucha long delay

hazyjo

AnotherJoe wrote: »

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.

It could be that they have to sell but will then be buying with cash/no mortgage. OP, can you clarify?

nkomp18

I will need either a small morgage if I sell or a pretty huge one if I don't.
I prefer to sell.

The thing is, I am thinking of accepting a lower offer because the buyer pledges to be flexible with the dates. So I spoke to my solicitors and they will get a letter of confirmation from their solicitors that we will have a fixed completion date of October, but we will exchange as early as possible.

I think it's doable...

As for the newbuilt.. I won't assume it will be late because the date is being moved forward a lot.Was supposed to be 2019 and now it's September or October 2018. Scary when they move things forward...

hazyjo

I meant your buyer. Will they be in a chain, or do they have the cash available without selling? If they need to sell, they can't guarantee they will be ready to complete in October - however long off that may seem.


I wouldn't agree to it, nor would many others.


Good luck.

nkomp18

My buyer is a cash buyer and has no chain. I think they're chinese investors

hazyjo

Unusual for an investor to want to hang on. I hope you get to exchange without them dropping the price again significantly beforehand... they'll have you over a barrel by then. Not trying to scare you, but just bear it in mind!


I'm usually quite defensive re investors - they're not all bad lol - but there are many stories of investors dropping the price before exchange.

Richard_Webster

So I spoke to my solicitors and they will get a letter of confirmation from their solicitors that we will have a fixed completion date of October, but we will exchange as early as possible.

I think that means that the builder thinks he will complete in October but still wants you to agree to the 14 days after we tell type formula.

When you exchange the completion date or the means of ascertaining it must be fixed by the contract otherwise the exchange is meaningless.

You need the builder to agree a completely fixed completion date in October on the contract at the time of exchange
or
get your buyers to go along with the formula date and, yes, maybe, agree a price reduction in exchange for them doing that.

Do not get some vague assurance from the seller's solicitors with a formula on your purchase and agree a fixed October date with your buyer. You will end up moving out to let the sale go through.

nkomp18

I think I confused everyone.The last post is talking about a "builder" but I was referring to my current property that I am selling.

hazyjo

nkomp18 wrote: »

I think I confused everyone.The last post is talking about a "builder" but I was referring to my current property that I am selling.

But you are also talking about buying a new build. That is what Richard was referring to. Points you need to consider.

MataNui

nkomp18 wrote: »

I think I confused everyone.The last post is talking about a "builder" but I was referring to my current property that I am selling.

No. Nobody is confused. You are buying from a builder. They tend to not do fixed completion dates as new builds almost always overrun. The person buying your house will need a fixed completion date. Mortgage offers do expire and the sale needs to be complete before this happens. This is why most people wont go along with your builders woolly estimate of completion and will demand you give them a fixed date (or at least a fixed backstop date) before they exchange. Once you exchange you are tied to this.

So you will likely be in this position:
You have a fixed completion date with your buyer for October and have exchanged.
You have a floating completion with the house you are buying and have exchanged.
So when October comes you dont have any choice, its not about trust. You move out and thats the end of it. If your new place is ready and completes on the same date then thats great. If not then its tough luck on you. You check into a hotel or rent somewhere.