Completion on notice during pandemic

leila96

Hello,

as the title suggests, we have found a house we love but it has been part exchanged. The people who own the house are living in the property until there new build is completed (expected no later than September). It was all going smoothly, notice of completion to be agreed along with a long stop date etc, until I realised mortgage companies can withdraw there offer at any time. I stupidly didn’t realise this was a thing they could do. 

Me and my partner have no reason to believe we will be loosing our jobs in the near future. However, Coronavirus has understandably given most people a small feeling of uncertainty that wouldn’t have otherwise been there. I’m a massive over thinker, but would you say it’s super risky having such a large amount of time, possibly 2 -3 months in which anything could happen!? Is there anything that can be put in place in this scenario? 

any advice on what you would do?

thanks! 

davidmcn

leila96 said:

until I realised mortgage companies can withdraw there offer at any time. I stupidly didn’t realise this was a thing they could do. 

But in practice they don't (unless of course there is a material change in your circumstances). You're in no greater risk than, for example, the people you're buying from.

leila96

davidmcn said:

leila96 said:

until I realised mortgage companies can withdraw there offer at any time. I stupidly didn’t realise this was a thing they could do. 

But in practice they don't (unless of course there is a material change in your circumstances). You're in no greater risk than, for example, the people you're buying from.

I didn’t realise until my mortgage appointment that they can withdraw for material changes, such as job loss. Obviously I have no reason to think of this as a concern other than the fact businesses across the country are/could become unstable depending on how the current situation progresses. 

A 2 week gap between exchange and completion would have a very small chance of someone being made redundant in that time, a 3 month gap would obviously increase those chances, especially with Coronavirus thrown into the mix. 

I could be completely overthinking it but thought there may be something which could be included into contracts to mitigate this. 

mattyprice4004

The only thing you could include would perhaps be some kind of get-out mutually agreed, but it's unlikely the other party's solicitors would be a fan of something like this. 

Usually the contracts include a penalty for non-completion, it'd be worth checking what this actually is in your contract. 

Falafels

If you're both still working, and there's nothing wrong with the property, there's no reason why a mortgage company would withdraw their offer. They need to make money after all!

In the general scheme of house buying/owning, 2-3 months is NOT a large amount of time, and from what you've written here there's nothing to worry about.

davidmcn

leila96 said:

davidmcn said:

leila96 said:

until I realised mortgage companies can withdraw there offer at any time. I stupidly didn’t realise this was a thing they could do. 

But in practice they don't (unless of course there is a material change in your circumstances). You're in no greater risk than, for example, the people you're buying from.

I could be completely overthinking it but thought there may be something which could be included into contracts to mitigate this. 

In theory yes, in practice no as everybody expects to be able to rely on the contract. The other party doesn't want to have to take on the risk of you losing your job - that's your problem. So if you don't fancy the risk then you either persuade the other side to postpone exchange, or go and find something else.

bucksbloke

You could ask for a coronavirus rider to the contract, which states in the event of mortgage being withdrawn in relation to a coronavirus issue - that your deposit will be returned. I know a lot of new build properties are currently doing this due to significant changes in the build window. 

leila96

mattyprice4004 said:

The only thing you could include would perhaps be some kind of get-out mutually agreed, but it's unlikely the other party's solicitors would be a fan of something like this. 

Usually the contracts include a penalty for non-completion, it'd be worth checking what this actually is in your contract. 

Thanks for replying. That’s interesting, presumed it would just be that we would loose our whole 10% deposit, is this sometimes a different penalty? 

leila96

davidmcn said:

leila96 said:

davidmcn said:

leila96 said:

until I realised mortgage companies can withdraw there offer at any time. I stupidly didn’t realise this was a thing they could do. 

But in practice they don't (unless of course there is a material change in your circumstances). You're in no greater risk than, for example, the people you're buying from.

I could be completely overthinking it but thought there may be something which could be included into contracts to mitigate this. 

In theory yes, in practice no as everybody expects to be able to rely on the contract. The other party doesn't want to have to take on the risk of you losing your job - that's your problem. So if you don't fancy the risk then you either persuade the other side to postpone exchange, or go and find something else.

Mmm, completely get what you mean. The seller is a developer as it’s a part ex house, no chain on either side, so would not impact any onward sales. However I imagine if I try and query there contract too much (as they want a 28 day exchange) they may ditch us and try and find another buyer.

leila96

bucksbloke said:

You could ask for a coronavirus rider to the contract, which states in the event of mortgage being withdrawn in relation to a coronavirus issue - that your deposit will be returned. I know a lot of new build properties are currently doing this due to significant changes in the build window. 

Thanks, I’ll look into this. Is that likely to cover instances such as redundancies caused by Coronavirus impacting what a lender is willing to give you? 

bucksbloke

leila96 said:

bucksbloke said:

You could ask for a coronavirus rider to the contract, which states in the event of mortgage being withdrawn in relation to a coronavirus issue - that your deposit will be returned. I know a lot of new build properties are currently doing this due to significant changes in the build window. 

Thanks, I’ll look into this. Is that likely to cover instances such as redundancies caused by Coronavirus impacting what a lender is willing to give you? 

Yes