Help with chain issue

itwasntme001

Hello,

My aunt is selling her home and looking to move elsewhere (in Cambridge).  Offer has been accepted for her place, however she still needs to find a home to buy.  She definitely does not want to just sell.  Her contract with the EA says that fees are payable once the buyer enters into a binding contract to purchase the property.

Also she has been told by the EA that the buyer does not want to spend on the solicitor/survey yet until my aunt has found a place to buy to avoid wasting money.  My aunt insisted that the buyer pays to show commitment etc.  However, the EA said that is quite common for buyers to hold off on things until the seller has found a place.  In order to get the buyer to show commitment, my aunt emailed the agent saying that "if absolutely necessary" she would just vacate, even though that will never be her intention.

Her questions are:

- are any fees payable to the agent if, for any reason, the buyer or the seller (my aunt) decides to pull out before exchange?

- does the email my aunt sent affect anything in terms of fees payable to agent or forming a legal contract that enforces my aunt to sell even if she has not found a place to buy?

Thanks

bucksbloke

It depends on the contract that was signed. 

babyblade41

the contract will answer your questions, and no,  until the chain is complete not many would instruct a solicitor as your aunt may never find somewhere ... 

csgohan4

put yourself in the buyers position,  12 months down the line aunt hasn't found a house, buyer has already racked up bills for solicitors and getting fed up with waiting and may find somewhere else.

Where as in a chain, the buyer incurs costs once the vendor has found a place, which is entirely normal. Aunt insisting on commitment also goes both ways too

As Above I can't read the contract from here, what does it say ?

elsien

Aunt is better off being honest with the buyers. Why should they show their commitment while she insists on telling them porkies and still being free to walk away. Your aunt is being unreasonable. 
Has she considered renting if her search takes longer than expected? 

Slithery

Perfectly normal not to spend any money until the chain is complete.

eddddy

itwasntme001 said:

- are any fees payable to the agent if, for any reason, the buyer or the seller (my aunt) decides to pull out before exchange?

- does the email my aunt sent affect anything in terms of fees payable to agent or forming a legal contract that enforces my aunt to sell even if she has not found a place to buy?

You need to read the contract, but...

• It would be very unusual for EA's fees to be payable if the buyer pulls out.
• Many EA contracts have clauses that say the EA's fees are payable, if the EA finds a "Ready, Willing and Able Buyer" and then the seller pulls out.
• I wouldn't worry about the email that your aunt sent, it doesn't sound like there's anything legally enforceable in it

itwasntme001 said:

My aunt insisted that the buyer pays to show commitment etc.  

Put yourself in the buyer's shoes. The buyer is likely to insist that they want your aunt to pay something to show commitment. (Maybe your aunt will not seriously look for a new home, and leave the buyers hanging on for 6 months or 12 months, so they have to give up and walk away.)

The intention is probably that once your aunt finds a place to buy - both your aunt and her buyer will pay out on solicitors and surveyors etc - so both parties show commitment at the same time, and have similar amounts of 'skin in the game'.

itwasntme001

csgohan4 said:

put yourself in the buyers position,  12 months down the line aunt hasn't found a house, buyer has already racked up bills for solicitors and getting fed up with waiting and may find somewhere else.

Where as in a chain, the buyer incurs costs once the vendor has found a place, which is entirely normal. Aunt insisting on commitment also goes both ways too

As Above I can't read the contract from here, what does it say ?

The contract says fees payable if binding/unconditional contracts exchanged between buyer and seller.  No where in the contract does it say fees payable under any other circumstances.

With the email my aunt sent, does this constitute a legal/binding contract so that she HAS to sell irrespective of whether or not she has found a place to buy herself?

itwasntme001

eddddy said:

itwasntme001 said:

- are any fees payable to the agent if, for any reason, the buyer or the seller (my aunt) decides to pull out before exchange?

- does the email my aunt sent affect anything in terms of fees payable to agent or forming a legal contract that enforces my aunt to sell even if she has not found a place to buy?

You need to read the contract, but...

• It would be very unusual for EA's fees to be payable if the buyer pulls out.
• Many EA contracts have clauses that say the EA's fees are payable, if the EA finds a "Ready, Willing and Able Buyer" and then the seller pulls out.
• I wouldn't worry about the email that your aunt sent, it doesn't sound like there's anything legally enforceable in it

itwasntme001 said:

My aunt insisted that the buyer pays to show commitment etc.  

Put yourself in the buyer's shoes. The buyer is likely to insist that they want your aunt to pay something to show commitment. (Maybe your aunt will not seriously look for a new home, and leave the buyers hanging on for 6 months or 12 months, so they have to give up and walk away.)

The intention is probably that once your aunt finds a place to buy - both your aunt and her buyer will pay out on solicitors and surveyors etc - so both parties show commitment at the same time, and have similar amounts of 'skin in the game'.

Thanks, yes I will tell her that it works both ways so she will not insist on survey etc to be done by buyer until she finds her place.

So just to clarify the email will in no way come back to bite her if she does not end up finding a place?

NinjaTune

I'd imagine the buyers would like some guarantee that the exchange will take place before the SDLT holiday ends.

Your Aunt is being very deceptive by lying to the buyers.  If she has no intention of moving out without finding a property to buy then she should be upfront about it.  Instead she is giving false hope to them.  Not nice.

Buyers don't sit round forever, if your Aunt delays things for too long then they will walk away and she's back to square one.  

iwb100

Frankly your aunt embodies every problem that people present in house buying and selling chains. She has listed her property. Fine. She has a buyer. Fine. She hasn’t anywhere to go. Fine. But she should be honest and say that she needs to find a suitable property before she can move. Is she looking? She shouldn’t be after anything from her buyers but instead should be working on finding a house to buy. She should communicate frequently with her EA to offer up progress. And she should register with all local EAs with her house requirements in case something suitable arises. Obviously Rightmove searches and alerts daily.