Estate Agent Lied to buyers about us moving out early

investme

Hi folks just looking for a bit of advice,

I'll try and keep it short.

I sold my house to first time buyers who agreed to wait for completion of the new build we are buying. That was made very clear when i accepted their offer, as it was a bit less than i wanted, but as i wouldn't have to vacate the property it offset possible renting and double moving costs.

Fast forward to now, trying to get to exchange, we have been ready for some time however the buyers were insistent on a completion date which new developers don't tend to give. The buyers have refused to exchange and would pull out of the sale unless the completion date is no later than their mortgage offer expires.

I had a lot of confusion trying to work out how or why they applied for an offer they couldn't extend, or why they applied so early knowing the original completion date was November October (it has been brought forward to September, but not guaranteed).

It turns out the estate agents had told my buyers and their mortgage advisor that we were willing to vacate the property and to go ahead. So the developer, myself and my solicitors were working under the knowledge the buyers were waiting until the build was done. Whilst the buyers and their party were working to completion being the date their mortgage offer expires (September).

Obviously me and my solicotrs have only just found this out and I am fuming. We are completely stuck else we lose £10k+ on fee's, options picked and reservation fees - not to mention the house itself (the last one left on the development). I have had to agree to exchange and hope for the best but is there anything I can do with regard to the estate agent?

If it completes on time there is a chance we will be okay however if not we will of course have to pay for two sets of moving costs and storage, not to mention wasted time off work etc.

I know estate agents can be sneaky but that is a pretty substantial thing to get wrong.

hazyjo

FTBs are often clueless about a lot of things. They have prob since discovered that there is a time limit on their mortgage offer. No, you can't 'choose a mortgage which guarantees it can be extended'. Some lenders will extend, some won't. It's often dependent on whether that product is still available (in some guise at least). If interest rates rise, it's unlikely they'll still be offered the same product.


I would suggest two options (some of which you've already covered): either you offer to pay for their new mortgage product fee (and hope the valuation is the same as the previous one, presuming they'll insist on a new one) and that they'll still lend the same and any new rates won't make it unaffordable; or you sell and rent somewhere short term, stay with friends or family, B&B or whatever. Yes, it will cost you more with moving costs, storage, etc.


Nothing you can do re the EA - maybe try to get them to reduce fees. I would keep it all as written correspondence (letter), and take it further. Find out their complaints procedure. Chances are it's a mixture of wrong info, misunderstandings, not remembering what they were told clearly, and a bit of wishful thinking.


Good luck. Let us know the eventual outcome.

pinkshoes

investme wrote: »

I have had to agree to exchange and hope for the best

So have you actually exchanged now?

I would have a look at local hotels or an air bnb place that would so you a deal for a few weeks if your new build isn't completed on time.

Surrey_EA

It would be interesting to know the circumstances surrounding: "It turns out the estate agents had told my buyers and their mortgage advisor that we were willing to vacate the property and to go ahead."

There are frequently three sides to every story....

As hazyjo says, it is not possible to specifically apply for a mortgage that can be extended. Sometimes the lender will choose to extend, sometimes not.

It does appear that somewhere along the line communication has not been effective. At exchange of contracts a completion date must be agreed. Sometimes a long stop/back stop date is agreed when a new build in involved and a precise completion date is not known. This is a date that cannot be gone past, but can be brought forward if it turns out the new property is completed in time.

Your buyers would be crazy to exchange contracts with an agreed completion date beyond the life of their mortgage offer.

What date were you expecting to agree as a completion date when contracts were exchanged?

kingstreet

Completion would be "on notice" there would be no date stated.

Surrey_EA

kingstreet wrote: »

Completion would be "on notice" there would be no date stated.

If a buyer has a mortgage offer with an expiry date, would they not be unwise to agree to an on notice completion?

They would be at risk of the completion potentially happening after their offer had expired.

investme

Surrey_EA wrote: »

What date were you expecting to agree as a completion date when contracts were exchanged?

The buyers were supposed to delay their mortgage application to accommodate the scope for our build to complete. if they had done this, the offer would have been valid until the end of November (roughly 6 months). It was always known we wouldn't have a firm date and would be on notice. I discussed this with the estate agents (and the buyers) several times shortly after offer. At some point since then, they got advised otherwise apparently from my estate agent to go ahead because we would vacate anyway

To respond to another poster above - We're not exchanged yet, although i have just given the go ahead with a fixed completion for the sale of mine and an 'on notice' for the purchase.

I am hoping it all stays on track

parkrunner

hazyjo wrote: »

FTBs are often clueless about a lot of things. They have prob since discovered that there is a time limit on their mortgage offer. No, you can't 'choose a mortgage which guarantees it can be extended'. Some lenders will extend, some won't. It's often dependent on whether that product is still available (in some guise at least). If interest rates rise, it's unlikely they'll still be offered the same product.

Not so much in this case, from the op


It turns out the estate agents had told my buyers and their mortgage advisor that we were willing to vacate the property and to go ahead.

Fosterdog

investme wrote: »

The buyers were supposed to delay their mortgage application to accommodate the scope for our build to complete. if they had done this, the offer would have been valid until the end of November (roughly 6 months). It was always known we wouldn't have a firm date and would be on notice. I discussed this with the estate agents (and the buyers) several times shortly after offer. At some point since then, they got advised otherwise apparently from my estate agent to go ahead because we would vacate anyway

To respond to another poster above - We're not exchanged yet, although i have just given the go ahead with a fixed completion for the sale of mine and an 'on notice' for the purchase.

I am hoping it all stays on track

If they had delayed their application there would have been an increased risk of them not being accepted, with you committed to buying your new build and having to find another buyer.

saajan_12

investme wrote: »

To respond to another poster above - We're not exchanged yet, although i have just given the go ahead with a fixed completion for the sale of mine and an 'on notice' for the purchase.

I am hoping it all stays on track

How far out is the fixed completion on your sale?

What if your vendor serves notice to complete on your purchase BEFORE the fixed completion of your sale? even if this is unlikely, can you fund the purchase?

What if your vendor serves notice to complete on your purchase AFTER the fixed completion of your sale? I would book removals now, with the possibility of either moving straight into new build if all the starts align, or into storage. Pack so that you have minimal things you need immediately with you in any temporary accommodation. Then you can squeeze into a smaller rental / bnb for a short term if needed.

kingstreet

Surrey_EA wrote: »

If a buyer has a mortgage offer with an expiry date, would they not be unwise to agree to an on notice completion?

They would be at risk of the completion potentially happening after their offer had expired.

As a newbuild specialist, this forms part of our lender selection as it should for anyone with a newbuild in their chain.

There are several lenders offering longer product drawdown deadlines (eg Halifax currently 31/03/2019) or a six plus six approach where you get a six month offer and can extend it for a further six (NatWest, Leeds etc).

If there is a purchase in the chain with completion on notice, everyone else in the chain is stuck with the same...

I'd say you are better off staying out of such a transaction if you don't like the idea of a builder having all the control.