Should we exchange?

Whty271

Hi, We are buying a new build home that is due to complete in August (delayed from March), the developer is trying to get us to exchange now however I have a concern that if anything went wrong with my job between exchange date and completion we’d lose our deposit and are back to square one saving for a deposit.

I’m currently furloughed until end of June and would expect a round of redundancies in August or October.

Is it reasonable to request the exchange and completion date be closer together?
Any other ideas?

GDB2222

It’s not just reasonable but essential. You  should have a simultaneous exchange and completion, and most solicitors are recommending this now.

vitaweat

Whty271 said:

Hi, We are buying a new build home that is due to complete in August (delayed from March), the developer is trying to get us to exchange now however I have a concern that if anything went wrong with my job between exchange date and completion we’d lose our deposit and are back to square one saving for a deposit.

I’m currently furloughed until end of June and would expect a round of redundancies in August or October.

Is it reasonable to request the exchange and completion date be closer together?
Any other ideas?

It's your money so you get to decide when you want to complete.  Definitely do not exchange contracts if you're unsure whether or not you'll be in a position to complete at the time you've agreed. 

GDB2222

I appreciate that the developer wants to get this sold ASAP, so that they meet targets, etc, but that’s their problem, not yours. Simultaneous exchange and completion will probably become the new norm with so much uncertainty about, and developers will just have to get used to it. 

blue_max_3

Developer's obviously want to have secured sales before the homes are finished. It's their rules or move on.
I honestly don't think you should be considering buying a property in your situation anyway. That seems crazy.

GDB2222

I’m not at all sure that you have to abide by the developer's rules. It depends how many buyers they have to choose from. 

numbercruncher8

If you don't know whether you'll be included in those redundancies, it doesn't seem sensible to exchange at any time. You then would have a mortgage, but no job. Obviously your other finances come into the equation, the size of redundancy, job prospects etc.

It would be very unusual to exchange and complete so far apart, the benefits of such are almost wholly for the developer. Can't see how it benefits you in any way. What if another property you like slashes it prices in the meantime? Don't know where you are in the country but where I am looking, it's already happening.

Of course there will be some games played like threatening you will lose the development, other people wanting to buy etc.
I should say once the market recovers, I don't see this being the norm, simply because it would be a system which has few upsides for buyers - if anything happens it is a real pain.

The chances of the unforseen are fewer on a FTB/new build but exchanging and completing on the same day in theory leaves you more vulnerable to small last minute changes, because they may know you've already made the commitments to move. For example, some item that adds £10-15 a month to the service charge may not be worth haggling over at that stage.

davidmcn

Whty271 said:

Hi, We are buying a new build home that is due to complete in August (delayed from March), 
I’m currently furloughed until end of June and would expect a round of redundancies in August or October.

Is it reasonable to request the exchange and completion date be closer together?

It doesn't sound like delaying exchange is going to be much help if you're fearing redundancies after completion anyway? Are you sure you want to buy at all if things are that precarious? 

Whty271

Cheers everyone, 
Are we best telling our solicitor we would like a simulatenous exchange and completion or should we talk directly to the developer ourself?

Although we are concerned about redundancy, we are not worried about being able to afford the repayments.

AnotherJoe

Whty271 said:

Cheers everyone, 
Are we best telling our solicitor we would like a simulatenous exchange and completion or should we talk directly to the developer ourself?

Both.

jonnym8083

Speak to solicitor or developer about a rider. We have just exchanged on a new build and there is an additional rider form stating that should anything happen with our income, job security or the builder due to Covid 19 then we can terminate contract and get deposit money back