New Build Chain Break

KHL

The person whose house we are interested in buying is buying a new house. The developer (Persimmon) has offered to buy our house as a chain break in order to get their sale. We are happy with the price they are offering but have concerns that there maybe pitfalls that we are not aware of.

We would have to exchange contracts within 6-8 weeks from now but the new build house is predicted to be ready between March and June next year. I assume the mortgage company will need to know a standard length offer is not suitable. Also, can we put a time limit on the contract so that it cannot end up being after June that we move? Does anyone know what would happen if Persimmon or the company they use to purchase our house went bust?

Thanks for any advice/ previous experience of this you can share.

franklee

Time limit is an essential IMO otherwise you could be in limbo for months, google long stop date. Mortgage offer expiring is an issue so could make that the time limit.

A long stop date means that if a developer fails to finish the property by a particular date, you are entitled to withdraw your offer to buy the property without incurring a penalty.

Hopefully your solicitor will be advising. Use your own choice not the developer's.

davidmcn

KHL wrote: »

Does anyone know what would happen if Persimmon or the company they use to purchase our house went bust?

If Persimmon go bust then nobody in your chain will be moving house so you'd be back to square one. I presume they'd sort out something else if their part-exchange company went bust in order that the move can proceed.

KHL

Thanks for the info

hazyjo

I'd sell and go into rented if I were that keen, or force the vendors' hand to go into rented.


Way too many 'what ifs' between now and next year. Chances are it will be delayed. I can't seen any lender giving you a mortgage with an open ended completion date.


How can you put a time limit on it? If it's not ready, it's not ready. If you are happy to say not your prob and the vendors need to move out and rent or stay with others if that's the case, then I would be making those demands now.