Exchanged contracts

Hyds1_12

Hi, 
I exchanged contracts on a new build on Tuesday 18th August. My question is, if I were to pull out at this point what would happen? I haven't yet paid the deposit, this is due to follow on Monday 24th August once my sale completes.
Thanks in advance.. 

RelievedSheff

You would be liable for the full amount of the deposit if you pull out now and possibly the developers legal fees.

You need to read your documentation that you have signed to find out the full extent of your liabilities. You have by exchanging contracts legally agreed to buy the property. 

davidmcn

Didn't your solicitor advise you what the contract meant before you exchanged? That is (partly) what they're meant to be doing for their fees.

Hyds1_12

Not really, we signed it back in lockdown! 

davidmcn

Hyds1_12 said:

Not really, we signed it back in lockdown! 

That's not much of an excuse.

ODEN33

Why do you want to pull out?has the value dropped?

RelievedSheff

Hyds1_12 said:

Not really, we signed it back in lockdown! 

You should have read it more carefully before you signed it.

Having exchanged contracts you are now legally bound to buy the house.

Davesnave

Hyds1_12 said:

Not really, we signed it back in lockdown! 

Irrelevant. You  exchanged two days ago, and until you did that you weren't committed to the purchase.

The solicitor should/would have asked you if you agreed to exchange. Did you use the solicitor the developer recommended, or did you find one yourself?

At the very least, you will be liable to lose that deposit if you don't complete..

greatcrested

Surely the time to ask either your solicitor and/or a forum what Exchanging Contracts means was.... before Exchanging contracts...

As the term strongly implies, you are now legally commited to a contractual agreement, having just exchanged it with the other party to that contract.

eddddy

Hyds1_12 said:

Hi, 
I exchanged contracts on a new build on Tuesday 18th August. My question is, if I were to pull out at this point what would happen? I haven't yet paid the deposit, this is due to follow on Monday 24th August once my sale completes.
Thanks in advance.. 

Once you exchange contracts, you are legally bound by the contract.

The contract might allow you to cancel in very specific circumstances, for example:

• There may be a 'long stop' date - if the new house isn't ready you can walk away
• There may be a clause that says that if the house is substantially different from the agreed plan, you can walk away   

Unless there's something in the contract that allows you to walk away, if you don't complete the purchase, you'd probably lose a 10% deposit as a minimum.


But you say something else that is worrying - why can't you pay your deposit until your current sale completes on 24th August? Why aren't you using the exchange deposit from your current house?

Hopefully, you have actually exchanged contracts on the sale of your current house.  You'd be in a super-risky position if you haven't.

(And presumably, you've got somewhere to live and store your furniture from 24th August onwards.)

mrschaucer

Hyds1_12 said:

Hi, 
I exchanged contracts on a new build on Tuesday 18th August. My question is, if I were to pull out at this point what would happen? I haven't yet paid the deposit, this is due to follow on Monday 24th August once my sale completes.
Thanks in advance.. 

Hesitate to ask - are you sure you've exchanged and not just signed the contract ready to exchange on 24th?