3+ month delay between exchange and completion

moodysocks

Hi all,

We had an offer accepted on a house yesterday. We viewed the place twice, asked lots of questions (although we clearly didn't do enough interrogation), and were told by no less than three estate agents that the vendor was buying a new build, part-exchange and that the property was ready and the vendor could move anytime. Honestly I asked this extremely directly each time ("is she in a hurry?" "is her house ready to move into?" "is she ready to move now?" ... you get the idea) and always got "yes yes she's ready to go".

Well, it turns out this isn't the case. She is selling through an 'assisted move' scheme and her new-build isn't going to be ready until November. The company handling her assisted move has been very clear that the exchange has to happen within 28 days of the memorandum of sale being issued (it hasn't yet). This would leave us with ~2.5-3 months delay between exchange and completion.

This has made me a little bit nervous, due to possible delays in the vendor's house being built, the possibility of a second lockdown massively delaying things, house prices plummeting in the intervening months. I'm uneasy with the deposit being held in limbo for so long.

Does anyone have any advice on how to proceed? We don't want to pull out of the sale, it's a great house in a lovely area. We'd be happy to wait, as we know that it normally takes months for a sale to complete anyway, it's the massive gap between exchange and completion. My thoughts are that we fix a completion date (say November 1st), and is there any purview for putting in something similar to a longstop/stop date clause in the contract? I guess these are questions really for our solicitor, but I wanted some thoughts before we instruct him at great expense!

Would love peoples thoughts, thanks.

greatcrested

Personally I'd walk away. There are other properties.

AK1212

I was involved in a similar situation as my vendors were looking into a new build to help complete the chain. I advised I would not exchange that far in advance of completion and that was the end of it. The vendors went back onto the market to look for a chain free property with success. 

All the uncertainties involved currently as you have clearly indicated seems that it may be more on the riskier side. 

Arefer

I walked away from a similar part exchange transaction recently as the vendors wanted to comple on notice with no fixed completion date. This was very risky especially in the current circumstances with possible further long delays, finding specialist insurers (expensive) to cover the long gap between exchange and completion, risk of mortgage offer expiring and not being renewed due to change of circumstances, lender's criteria or valuation.

pinkteapot

If you exchange without a fixed completion date then you ask your solicitor to include a long-stop date in the contract. If this date passes you can walk away penalty-free. You should make the long stop date just before your mortgage offer expires. 

That’s if you decide to get involved in this. The sellers want to buy a new build which always means early exchange with uncertain completion date. You could refuse and then their options are to exchange on their purchase before exchanging with you (very risky), or complete with you and stay in temporary accommodation until their new-build is ready. Whether they’re prepared to do anything like that will depend on their circumstances and how easily they think they’ll find another buyer offering the same as you. 

AlwaysPondering

We were looking at a new build whilst living in rental. The developers were saying that they wanted exchange within 28 days of the offer being made/accepted. But the house wouldn't have been available for about 6-8 months, so we'd not completed until then, and they wouldn't add anything in for a get out clause if the house wasn't ready.

We walked away, not worth it for us.

moodysocks

Thanks for all the comments, it's pretty much what we were thinking 

AlwaysPondering said:

 and they wouldn't add anything in for a get out clause if the house wasn't ready.

We walked away, not worth it for us.

This is a major concern of ours, do we want to risk dropping £2k on a solicitor on the assumption that the assisted move company will agree to a get out of jail free card and a fixed completion date, only to find they refuse?

We've told the estate agent we're pulling out, it's the best decision for us. Such a shame though!

bucksbloke

Developers always want to exchange contracts within 28 days, this is the only point at which they have a guarantee that a transaction would go ahead. It's typically why new builds are more popular with FTBs or those moving from rented.

Assisted move scheme works better if the house is a stock house (build complete with no buyer) as otherwise you end up with this long period of time waiting for a house. They should have really used part exchange for this transaction. 

Marvel1

They lied, so look elsewhere.