Buyer trying to negotiate after exchange

Grannyk

We were due to complete on a house sale/ purchase last Friday. After a very long process we eventually exchanged at the beginning of December selling to our neighbour (he gazundered us at exchange as well but we finally agreed a price and contracts were signed and exchanged) and buying a new build from a developer.

We moved out with 2 large removal vans last Friday (15th Feb),over the previous weeks I had moved my business from the garden office to a rented office nearby and we had given away/ sold a lot of furniture so there was a lot of activity (not to mention 2 days cleaning and picture hook hole filling to leave the house in tip top condition for our neighbour)

After a lovely post-move lunch in a nearby pub, waiting for the call to go and pick up keys, our solicitors phoned to say they had had a short email from our buyers solicitor stating that 'due to no fault of his own, he was not able to complete today. After a lot of confusion we eventually got hold of our buyer (who incidentally has spent the last 3 years telling us how rich he is) and was told that the mortgage company had down valued the property since their original survey in November. We were told then that the valuation was £615K, it was now apparently worth £595k. Our solicitor served the notice to complete and we also received the same from our sellers so we are in the 10 working day notice period. 6 days after the failed completion we got very short letter with an 'offer' of £600k (we exchanged at £645k).

Our estate agents have tried to impress on our buyer that he stands to lose a lot of money. At the moment he has hared over a 5% deposit of £32.5K and the contract states that in the event of non completion this should be made up to the full 10%. But for some reason he thinks he's only going to lose the money already paid and he thinks this is a better deal than buying a house that he doesn't think is worth the contracted amount.

Apart from the loss of credibility, what does he stand to lose financially (this being all that seems to matter to him). I have read other threads with similar stories of chain break down but they tantalisingly end without saying what happened.

Both sets of estate agents have confirmed that their costs are payable, we will also have both sets of solicitors bills to recover from him + all the abortive costs for mortgage, insurance etc.

Can we recover deposits for items for the new house (the new made to measure blinds that I have paid for, the new fireplace that we ordered etc) and costs for moving out of the garden office and renting elsewhere.

The big one is can we also recover the deposit the we will lose for out onward purchase?

Needless to say all our friends and other neighbours are outraged by his behaviour, perhaps I should say that he is a small time property developer so not new to house selling/ buying.

Anyone got any experience of this?

eddddy

If he doesn't complete, you'll almost certainly need to get a litigation solicitor.

How long is the chain above you? I assume they've all failed to complete because of this.

Each person in the chain will sue their buyer for failing to complete. All the costs will cascade down the chain and end up falling on your buyer.

That might be many tens of thousands - or much more, if property prices are falling.


(Out of interest, why is the deposit only 5%? Could your buyer actually be short of money?

There's a risk that if your buyer doesn't have any money/assets, and the damages bill bankrupts them, you could end up severely out of pocket.)

csgohan4

personally I would have refused to deal with him if he tried to gazunder before exchange, it's looking like it's coming back to bite you.

This looks like a mess and your buyer is to blame. I hope you get it sorted and I hope he gets what he deserves

Grannyk

The chain is only 3 and 5% is fairly normal with the contract stating 10% payable if defaulted. We're pretty experienced buyers/ sellers ourselves. Sadly we expected the pre contract negotiation but trying to do it with a contract in place seems to be pretty stupid.

He isn't poor (or so he likes to tell everyone) and our onward purchase is a much lower price. He's trying to buy other land and property in the area.

diggingdude

He isn't poor now but may be when this sorts itself out. Take him to the cleaners

D_M_E

You should now ignore him and talk to your solicitor.

Post exchange price negotion should not have been done - the price agreed at exchange should have stood, no further negotion should have been considered nor agreed.

However, should he fail to complete at the agreed price and agreed time then I think your solicitor gives him a few - very few - more days to complete then, if he still does not complete your solicitor serves specific performance on him (think that's what it's called) and if he still does not complete he is then responsible for all and every costs incurred by the chain, including anything you have spent or are responsible for in respect of your onward purchase.

You need to speak to your solicitor as a matter of urgency about this and also he would be responsible for any extra costs incuured by you for the extra work done by your solicitor to resolve - or not - the situation.

babyblade41

This is all very worrying as as everyone has said failure to complete and all the expense from all of the chain inc agent fees, legal fees and every other cost incurred will only be of any use if the buyer is solvent
Your solicitor should advise you first thing Monday morning and I would have thought that the other solicitors in the chain will be in contact as well

I find when someone has something to crow about they keep quiet, for those who have nothing to crow about shout the loudest.

My concern is if he has the finances to pay all the ongoing costs that will inevitably will be payable

Smi1er

eddddy wrote: »

Out of interest, why is the deposit only 5%? Could your buyer actually be short of money?

I did this on a place I bought. I simply didnt want the seller to have to much of my money at exchange.

I paid £10K but it was in the contract that if I didn't complete then the deposit would have to be made up to 10%

Grannyk

Thanks all, We're currently in the no mans land of the 10 day completion notice period. Our solicitors written to his outline the costs for failure to complete but we'll get a litigation solicitor involved when the 10 days are up. We haven't seen him since, he's gone into hiding with his blinds drawn and we only communicate via the EA and solicitor (as it should be). We're just getting on with life, walking the dog, going to and from work and telling anyone who asks, what has happened.
It's a naked attempt to con us out of the contract price, we don't have to sell (i.e. out of personal or financial necessity) we could stay and use the lovely sum that he's going to have to give us to help pay off the mortgage. We're bewildered by what he's trying to do and immensely p***sed off that he watched us move out and then move back in again. (albeit that we now have a nice clean house). I only wish I had got a company in to do the cleaning and decorating then he could have paid for that as well!

middleclassbutpoor

Hopefully he comes to his senses....

https://forums.moneysavingexpert.com/discussion/1806123/vendors-pull-out-after-exchange-of-contract

elsien

This is the thread that followed it through to the end.

https://forums.moneysavingexpert.com/discussion/1806123/vendors-pull-out-after-exchange-of-contract&highlight=buyer+failed+to+complete

It's a bit of a saga but if you read post 799 that gives an outcome of a 30k out of court settlement.