3-4 months between exchange and completing

Cbcb

We are first time buyers, very interested in a house where the sellers are buying a new build. They are clearly part of an assisted moving scheme (I believe David Wilson Movemaker) where they have put a small deposit on a particular plot and to guarantee this plot they have to use a particular agent and essentially get a quick exchange (4 weeks) but then they would wish to complete when their new build is ready (which is anticipated to be February).

This would leave us in a position of exchanging in the next few weeks (which we believe we can do as we are in the fortunate position to be cash buyers, and have solicitor lined up) but then we'd have around 12-14 weeks between exchange and completion.

Our main concern is insurance and the risks of something happening in that period. I've heard that it would be hard to get building insurance for 14 weeks before completion.

If we put an offer in, we are going to ask for a hard completion date of end of March, as we're not willing to wait for excessive delays on new build completion.

Would you wait so long between exchange and completion? Are there any risks we are not thinking about?

Thanks in advance!

Cb

Cbcb

To clarify, what I mean by 'hard completion date' is we would hope to complete in Feb, but would ask it to be written into contract that it wouldn't go past the end of March. They might not accept that of course, but we would have to have that condition.

Marvel1

Not something I would go for, anything can happen to the house and it's your problem.

quotememiserable

I don't think getting insurance will be any problem. Just try to buy it and you'll find out.

diggingdude

I assume you are getting a discount for waiting that long?

Fire_Fox

Are you intending to have a RICS survey carried out?

Where would the sellers and their worldly possessions go for the last few weeks, if their new build is delayed? How would it impact you if they failed to complete on time?

IMO, given your very strong position as chain-free cash buyers, it makes more sense to submit your best offer in writing ... on condition that they move into unfurnished rented accommodation for four months or so (likely have to pay six months rent).

Both sides then push hard for a swift exchange and completion.

gary83

I think even as cash buyers the idea of exchanging in the next couple of weeks is a bit optimistic, yes you aren't going to have to wait for mortgage valuations and offers and both sides can push hard for a quick conclusion, but you're still going to have to wait on local searches, the results of any queries your solicitor might raise.

hazyjo

I'd not wait. Let them sell and move into rented or stay with family.

You will probably have to agree a completion date at exchange. Different for new builds.

Wouldn't take the risk of their circumstances changing, nor indeed yours. Not to mention the risk of being 100% tied to that one property for so long.

Mickygg

I had the same thing many years ago. I just bought standard insurance saying I lived there. Obviously if anything happened it may have not been covered.

Remember if they say 4-5 months it could be double that. Mine was. I was told 3 months, ending up being 9 with various excuses ranging from weather through to losing building contractor.

FWIW I would never do this again. I nearly split from gf due to time apart and then once it was built I didn’t particularly like it.

da_rule

Essentially the seller would probably be looking for ‘completion on notice’ rather than an agreed completion date. This means that when they receive notice from the developer that their new house is ready they will then give you notice (of how ever many weeks you agree in the contract) and you will have to complete.

You can of course factor in a long-stop date into this, so if the notice to complete isn’t given by a certain date you can walk away with no loss.

As your sellers are buying new build, they won’t be obliged to insure their new property until completion. As such I would push for an amendment to the standard conditions of sale to make them liable for continuing to insure the house they’re selling.

I would also push for the contract deposit to be held to order and payable either on completion or within a set time of them giving notice to complete. This way there is no hassle of having to recover the deposit should the long-stop date be triggered.

AnotherJoe

gary83 wrote: »

I think even as cash buyers the idea of exchanging in the next couple of weeks is a bit optimistic, yes you aren't going to have to wait for mortgage valuations and offers and both sides can push hard for a quick conclusion, but you're still going to have to wait on local searches, the results of any queries your solicitor might raise.

The one time I bought as a cash buyer it took about 8-10 weeks and I didn't have any searches done so yep, 2 weeks sounds more than optimistic.
OP if the insurance is your only issue, I think that's a non issue.
My main worry would be twofold,
1. Your seller has an issue and cannot complete, and
2. The house is significantly delayed, by many many months.

You can only really mitigate this by making them move into rented (or at least move out) ASAP. Or take a discount for the risk.
Or the house is so fab you put up with it.
Which makes me think, there's a third risk, over this very long time period you find a much better house and of course you cant buy that one.