Is this normal or should we be worried? Exchange/Completion

nervousftbs

We tried to exchange today but our solicitor has just called to say that we can't because the vendor's bank won't release the funds until completion day (currently this Friday) so we are now doing a simultaneous exchange and completion on Friday. I asked if this was normal and he said it can be for the more obscure providers but most high street banks require 3-5 days for funds to be drawn down and allow this. The bank in question is Natwest. We are really stressed about this now as we are in a longish chain and it hasn't been exactly smooth sailing so far. We know the sellers are motivated to move and have basically packed up the house already and moved it to storage to make it easier for them on Friday so is this normal (not the simultaneous exch/completion but the lender not providing funds until the day of completion?) The solicitor said he was find out the exact reason but said he probably wouldn't get anything and we should just hope it goes OK on Friday. 

greatcrested

I don't understand.

Mortgage funds are normally needed to Complete, not Exchange, and are normally released by the lender in time for Completion.

That should not prevent Exchange.

AskAsk

i read that some solicitors are now advising same day exchange and completion because of covid 19 so it could be that vendor can't exchange until completion date.

greatcrested

AskAsk said:

i read that some solicitors are now advising same day exchange and completion because of covid 19 so it could be that vendor can't exchange until completion date.

That makes more sense than that Exchange is delayed because the lender won't release funds.

nervousftbs

Yes this was my question to our solicitor - my understanding is that in order to exchange, everyone in the chain needs to have confirmation from their respective lenders that they will release the money in time for the set completion date and once we have the confirmation  of that then we can exchange and the solicitor draws down the funds the day before but the vendor's solicitor is making it sound like they won't confirm the release of funds until Friday when basically they will either release them or they won't so we can't exchange because of lack of confirmation - i think (i appreciate i didn't say that in the OP but your confusion made me rethink) 

But if their solicitor is advising same day, why not just say that to our solicitor rather than this story about Natwest not releasing funds (or confirming release). We are in a chain of four and didn't think they advised same day exchange and completion for long chains as it is a lot of moving parts! 

AskAsk

it could be that banks are no longer promising to release funds in advance and so without this promise, the solicitor will have to wait for completion date to exchange.

i have heard other people say that they are in a chain of 3 properties and they have to exchange and complete on the same day.  someone said that they had to move into their inlaws for a week as they didn't want to be doing it on the last day, so they sold theirs first to break the chain down.

nervousftbs

Ok that makes more sense now - I've emailed the solicitor for clarification too and expressed concern over us all trying to do everything on the Friday with all of the moving parts and asked him to share the concerns with our seller to see if there's anything that can be done with the bank but I think we will just have to wait until Friday!  

iwb100

We just exchanged and completed in the same day in a chain. Guidance many conveyancers and indeed mortgage providers are working to now is exchange within 24 hours of completion to mitigate Covid risks. In most cases this means exchange and completion in the same day. Not sure it make much difference to you timings should still roughly be the same, you probably won’t even hear about exchange as it happens almost simultaneously with completion on the day. 

If you exchange early then in normal circumstances this is good as it provides certainty. But if you exchange early now...what happens if someone has symptoms or is told to self isolate or indeed a removals company pulls out or someone loses their job and therefore their mortgage offer etc etc...that’s why the gap between the two is reduced. 

nervousftbs

Thanks for sharing your experience! I think we have been fully geared up to have a bit of time between exchange and completion as that's what our solicitor has been leading us to so we were a bit shocked that's all! Selfishly we wanted to the certainty but I suppose nothing has changed really, I suppose we need to start worrying if it doesn't happen on Friday! 

Rambosmum

It was definitely a thing pre-covid (completing and exchanging on the same day) but it seems more common with COVID. I suspect it is partially because if you came down with COVID, or suspected COVID the day before the move, you would be placing multiple people at risk but would essentially be forced to complete regardless. Alongside other covid related financial risks, no-notice redundancy etc. Doing it all the same day reduces risk all round, particularly in a committed chain.

nervousftbs

Just to update for future - it isn't to do with Covid but due to it being an offset mortgage that only sends redemption statements on the day of completion so it has to be same day exchange and completion as the exact amount required can only be calculated on a specific day. So now we wait and hope for the best...