Asked to exchange 95 days before completion

FirstTime_Buyer

Hello,

Looking for some advice, I’m a first timer buyer who had an offer accepted on a house in September 2019. The sellers are buying a new build which is expected to be ready in April 2020.

This worked for me as I could save more and we agreed they didn’t need to move out and I was happy with an April move in date.

I’m being asked to exchange now even though the fixed completion date isn’t till April. I was initial asked for a £20k deposit but this has since dropped to just £1k.

Is this normal behaviour? I’ve been advised not to exchange so early as anything could happen from now till April and I’m basically locked into the process.

Happy for any advice with this being the first time I’ve done this kind of thing!

Thanks in advance.

Carrot007

New build. Fixed completion date.


These two points do not add up. They are just tryting to force you to stay to the likely builder floating completion date and not have to go into rented, unless of course you make a fixed date a part of the contract, though they would be insane.


Buying a new build means you get a few weeks notice on when you have to buy and is the least desirable of people to buy from. Unless they agree to move to somewhere temporary. Nearly killed my last purchase. I said. Sorry it's now or never.

Slithery

How long will your mortgage offer last for?

FirstTime_Buyer

Slithery wrote: »

How long will your mortgage offer last for?

It expires the end of April. A long-stop date of the 10th of April has been offered with a fixed completion date of April 6th but I still feel caution being asked to exchange so early.

diggingdude

i too would be nervous with that length of time, what incentive are they giving you for this (nice discount?) otherwise you are taking alot of risk and relying on others

ethank

Your sellers are buying a new build and are a dependant buyer. They must sell to you in order to buy from the developer. This means that they cannot exchange contracts on the purchase with the developer, unless they have exchanged contracts with you. If they did and could not complete, they would lose their deposit.

Developers do not consider a property sold until contracts have been exchanged. This is the point of legal no return. They don't want all of their plots tied up with people who might not be able to proceed. What you are being asked to do is completely normal for someone who is buying from someone buying a new build.

Based on their ability to offer a fixed completion date of April 6th. The house must be well into the internal works now.

sal_III

What exact risk are you thinking of with exchanging 3 months in advance if there is set completion date? You are not buying the new build, your vendor is, so they might have to vacate on 6 April if their completion date gets pushed back by the developer.

If anything it's in your interest to exchange now and fix the completion date, otherwise it might get pushed back by the vendor on account of their completion date getting pushed back by the developer.

As above your vendor likely needs/wants to exchange with you, before they exchange on the new build and developers are not going to wait to exchange on/close to completion date.

isplumm

diggingdude wrote: »

i too would be nervous with that length of time, what incentive are they giving you for this (nice discount?) otherwise you are taking alot of risk and relying on others

Hi

What risks are we talking about? I assume the OP is renting at the moment, so exchanging now would give the OP a clear date as to when completion is going to happen - also if it falls through, they should be able to sue for their losses.

Mark

SmashedAvacado

there's nothing particularly unusual about a long completion - the risks you have are:
1. your mortgage offer - will it remain intact
2. the condition of the property - is the seller going to look after it and do the things that need to be done through the hard winter that we might yet get
Otherwise, the risks are not really that different to buying on a short time scale.

Niv

SmashedAvacado wrote: »

there's nothing particularly unusual about a long completion - the risks you have are:
1. your mortgage offer - will it remain intact
2. the condition of the property - is the seller going to look after it and do the things that need to be done through the hard winter that we might yet get
Otherwise, the risks are not really that different to buying on a short time scale.

But isn't point 2 kind of a biggy? Leaking gutter? forget about it, the house is sold let the new guy sort it etc..

SmashedAvacado

Niv wrote: »

But isn't point 2 kind of a biggy? Leaking gutter? forget about it, the house is sold let the new guy sort it etc..

It certainly is. Obviously you can put an obligation in the contract to make routine repairs etc but its unlikely that they will want to spend money and they have no incentive to do anything that the absolute minimum. So if the property is a fixer upper it probably isnt much of an issue, but if not, then it could be more so. Most houses have one or two issues every six months that need dealing with.