Exchanging Contracts On Notice.....without firm completion date......HELP!

helga42

Hello
We are fortunate enough to be cash buyers and have made an offer on a property that was advertised as “ No Forward Chain”.
Fabulous property and it ticks all the boxes but on our first viewing we were told by the seller that he is waiting for a new property that is currently being built on a development and the expected completion date would be December 2020 so there is actually a chain!
He advised us that if we needed to move quicker than that he would move in with relatives which suited us even better as we do have a property to sell and although we are not reliant on the funds to proceed we need to take any prospective buyers need to complete into consideration.

We made an offer on the basis that we could agree to a December completion date and that was accepted and the Estate Agent said it was probably better that we discussed the completion and other points directly with the seller.
We visited the property again but on this occasion after the offer had been accepted the seller is saying the build might be delayed (materials,weather,COVID-19) and he would not go into rented or move in with family as he has children!

He is now throwing all the new build jargon into the conversation like “Exchange on Notice” which I basically understand that to mean exchanging contracts without agreeing a completion date until his builder gives him a date for completion.
So it now seems as cash buyers who are ready to move forward we being asked to commit to a purchase with the possibility of a delay which means :
a) we are very much in a chain with an uncertain completion date.
b) if we have a purchaser for our property we will have to go into rented an incur the cost of rent and storage.
c) if the delay goes on past the 31st March we will loose out on the Stamp Duty Holiday and incur more additional costs.

All these extra costs could take us up to an extra £18k on top of a the good offer we have made.
I am beginning to think we are being asked a little too much of and perhaps as much as we love the house and it’s location I thought cash buyers were something to be welcomed not made to fall in line with the sellers timeline.
Anyone else had experience of buying from someone purchasing new and wanting to work to their schedule?
Should we walk away from this now because?

Thanks x

iwb100

If you are a cash buyer and don’t need a sale to proceed why wouldn’t you sell your house after the move? Or at least delay the listing of your property until a completion date for your purchase is clearer. Ultimately if your seller doesn’t want to move out temporarily then there isn’t much you can do bar threatening to pull out. But if his house is not likely to be ready till December or later then I suspect he won’t care too much as he will likely find a new buyer in that time. It’s worth a discussion though but I’d do it via his estate agent rather than directly and get something in writing then inform your solicitor. On initial viewings people will often say they will move out with relatives if necessary but I suspect it’s easy to say but not so easy to do when it becomes a reality and the cost of storing furniture is calculated....

Flugelhorn

I tend to feel that the person waiting to move into the property which is "completing on notice" should be the one to move out / stay with relatives etc - it shouldn't fall to those in the chain. I think I would be concerned that this will go on well beyond December 

Scotbot

In the UK it is the norm for people to refuse to move until the next property is ready. With a projected completion date of Dec 2020 it is quite possible further delays will mean you miss out on the SDLT holiday.  Start looking again and if you  find another property then withdraw from this one. You could tell the vendor the Dec date is non negotiable but I doubt very much he will do anything different, he can always find another buyer

Do not under any circumstances exchange on notice. You could lose out big time financially.

Tiglet2

helga42 said:

Hello
We are fortunate enough to be cash buyers and have made an offer on a property that was advertised as “ No Forward Chain”.
Fabulous property and it ticks all the boxes but on our first viewing we were told by the seller that he is waiting for a new property that is currently being built on a development and the expected completion date would be December 2020 so there is actually a chain!
He advised us that if we needed to move quicker than that he would move in with relatives which suited us even better as we do have a property to sell and although we are not reliant on the funds to proceed we need to take any prospective buyers need to complete into consideration.

We made an offer on the basis that we could agree to a December completion date and that was accepted and the Estate Agent said it was probably better that we discussed the completion and other points directly with the seller.
We visited the property again but on this occasion after the offer had been accepted the seller is saying the build might be delayed (materials,weather,COVID-19) and he would not go into rented or move in with family as he has children!

He is now throwing all the new build jargon into the conversation like “Exchange on Notice” which I basically understand that to mean exchanging contracts without agreeing a completion date until his builder gives him a date for completion.
So it now seems as cash buyers who are ready to move forward we being asked to commit to a purchase with the possibility of a delay which means :
a) we are very much in a chain with an uncertain completion date.
b) if we have a purchaser for our property we will have to go into rented an incur the cost of rent and storage.
c) if the delay goes on past the 31st March we will loose out on the Stamp Duty Holiday and incur more additional costs.

All these extra costs could take us up to an extra £18k on top of a the good offer we have made.
I am beginning to think we are being asked a little too much of and perhaps as much as we love the house and it’s location I thought cash buyers were something to be welcomed not made to fall in line with the sellers timeline.
Anyone else had experience of buying from someone purchasing new and wanting to work to their schedule?
Should we walk away from this now because?

Thanks x

I think it boils down to whether you are prepared to wait until your vendor's new build purchase will be ready to move into, while considering the risk of not completing by 31st March in order that you can save on the stamp duty.

As iwb100 says above, if you don't need to sell a property in order to fund this purchase, why are you tying them together, thereby adding a further transaction to the process?  

Considering your points:  
(a).  The chain consists of you and your vendor and a developer.  Don't make it more complicated by adding in the sale of your property too, because your prospective buyer may also be selling, thereby creating a further chain downwards.
(b).   Separate your sale from your purchase (you say you are cash buyers), then no rental/further costs incurred.
(c).   Could be a risk.  If you don't want to take this risk, look for an empty property or buy a completed new build yourself.

Caramac

We are in a similar situation to your vendor except we have an expected completion date of the end of November. We will however be moving in with family once our sale is completed. The situation isn’t ideal but I’d rather have our current house sold. Whilst we always complete any forms and answer any queries in a timely manner we are not actively chasing our solicitor unless requested to.

helga42

Thanks for all your input.
We have our property on the market because the stamp duty holiday may be attractive to buyers and may give us a better chance of selling. Plus you have to pay the stamp duty and claim it back if your purchase is a second home regardless of the holiday.
My main concern is sitting tight and waiting for the sellers new build and missing the stamp duty holiday.
The seller has had nearly 30 viewings in 8weeks and we are the only offer so he might not find another buyer who will wait until his build is ready.
Think we will ask for the December completion and see where that goes.

thanks x

iwb100

helga42 said:

Thanks for all your input.
We have our property on the market because the stamp duty holiday may be attractive to buyers and may give us a better chance of selling. Plus you have to pay the stamp duty and claim it back if your purchase is a second home regardless of the holiday.
My main concern is sitting tight and waiting for the sellers new build and missing the stamp duty holiday.
The seller has had nearly 30 viewings in 8weeks and we are the only offer so he might not find another buyer who will wait until his build is ready.
Think we will ask for the December completion and see where that goes.

thanks x

I mean you can’t exchange so any completion date set now is meaningless. In our recent move our whole chain was told during Covid it was exchange and complete on the same day. So no way is it wise or possible to exchange now. So even if a date is agreed it’s beyond anyone’s control when your sellers house is actually ready. Therefore, NOW you need to decide if you are prepared to wait around or not. You can try and persuade them to move out to progress your sale but the timescales are not in your favour. If it was me I would not do that and I’d just find another buyer prepared to work to my timescale. Or delay my sale a month or two. If he has a family and children I suspect your chances of persuading him to move out before his house are ready are low.

You are either going to have to find somewhere else or wait and hope the completion date can be before 31 March.

Carl2510

say they need to move out on the expected move out date or pull your offer simple as!

bucksbloke

Do you mean complete on notice rather than exchange on notice? Most developers want exchange within 28 days. 

numbercruncher8

If you need the stamp duty holiday it might be better to look for something that will complete, ie genuinely chain free.

In this situation it appears all too easy for the seller to string you along and say yes to all your demands but if something doesn't go to plan simply delay the exchange, knowing that by this time you cannot buy another property without going past the deadline for completion.