Exchanging contracts without handing over the full deposit?

LJS95

Should I have concerns? I spoke to my developer (Barratt) and explained my concerns working in the aviation industry which is hard hit at the moment and the long gap between my exchange (Due now) and my completion date (November) and handing over a large deposit to exchange. They emailed me yesterday to say they were happy to exchange contracts having just paid my £500 reservation fee and that will be all? Something just seems a little fishy about it all, if my circumstances drastically changed and I couldn't complete could I be liable to other hidden costs? Barratt have said the only thing I will lose will be the £500 and any 'Upgrades/Choices' I would have paid for up front. I have emailed my solicitor for clarification but wondered if anyone else could shed some light on this.

One part of me thinks they are simply just desperate to get properties exchanged because many will have the same worries and are willing to work with me and another side of me thinks this sounds too good to be true?

Arefer

I have read about Barratts offering nil deposit option in a couple of recent threads such as this one:

https://forums.moneysavingexpert.com/discussion/6158889/exchanged-contracts-now-lost-job

Get your solicitor to ensure that this arrangement with Barratt and your maximum liability in case of rescission is properly reflected in your contract.

I was with a different developer before pulling out recently and my contract had the following term:

If the Deposit actually paid on exchange of Contracts shall be less than 10% of the Purchase Price then notwithstanding the payment of the lesser amount by way of Deposit the balance of 10% shall at all times remain due to the Seller and in the event of rescission or failure to complete through no fault of the Seller in circumstances giving the Seller the right to forfeit the deposit under the terms hereof such balance shall be the legal liability of the Buyer to the Seller as a condition of this Agreement.

If the above term is present, get it removed, and also any other potential liability such as Barratt's legal costs, etc.

LJS95

Arefer said:

I have read about Barratts offering nil deposit option in a couple of recent threads such as this one:

https://forums.moneysavingexpert.com/discussion/6158889/exchanged-contracts-now-lost-job

Get your solicitor to ensure that this arrangement with Barratt and your maximum liability in case of rescission is properly reflected in your contract.

I was with a different developer before pulling out recently and my contract had the following term:

If the Deposit actually paid on exchange of Contracts shall be less than 10% of the Purchase Price then notwithstanding the payment of the lesser amount by way of Deposit the balance of 10% shall at all times remain due to the Seller and in the event of rescission or failure to complete through no fault of the Seller in circumstances giving the Seller the right to forfeit the deposit under the terms hereof such balance shall be the legal liability of the Buyer to the Seller as a condition of this Agreement.

If the above term is present, get it removed, and also any other potential liability such as Barratt's legal costs, etc.

Yes there is something along those lines within my contract so I have emailed Barratt/solicitor and explained I’m not happy with it and basically change it or I won’t be signing the contracts! Will be interesting to see how they proceed but I have to cover all bases and keep myself protected in these risky times!

davidmcn

If you don't want to be contractually committed to buying the property (and it doesn't sound like you do!), don't exchange contracts.

Thrugelmir

If contracts are exchanged then Barretts will prioritise the build of the property over others. There's no benefit to the developer to expend huge amounts of time and resources for a buyer to walk away at the 11th hour. The deposit is a sign of committment. 

jamielutz1987

LJS95 said:

Arefer said:

I have read about Barratts offering nil deposit option in a couple of recent threads such as this one:

https://forums.moneysavingexpert.com/discussion/6158889/exchanged-contracts-now-lost-job

Get your solicitor to ensure that this arrangement with Barratt and your maximum liability in case of rescission is properly reflected in your contract.

I was with a different developer before pulling out recently and my contract had the following term:

If the Deposit actually paid on exchange of Contracts shall be less than 10% of the Purchase Price then notwithstanding the payment of the lesser amount by way of Deposit the balance of 10% shall at all times remain due to the Seller and in the event of rescission or failure to complete through no fault of the Seller in circumstances giving the Seller the right to forfeit the deposit under the terms hereof such balance shall be the legal liability of the Buyer to the Seller as a condition of this Agreement.

If the above term is present, get it removed, and also any other potential liability such as Barratt's legal costs, etc.

Yes there is something along those lines within my contract so I have emailed Barratt/solicitor and explained I’m not happy with it and basically change it or I won’t be signing the contracts! Will be interesting to see how they proceed but I have to cover all bases and keep myself protected in these risky times!

Please do report back on what they say. With all due respect, I highly doubt a large corporate like Barratts will (or can) simply drop that clause.

Sistergold

Why not just wait until you know what is going with work as all this will be causing extra stress on top of the stress of the uncertainty of your work? Or buy a property already built and get over with it quickly before anything happens at work? If you do buy an existing property you need to know what you will then do to keep up with your mortgage if you should lose your job for instance if you are buying with someone else where their salary can cover the mortgage while you find other work?