Exactly why you don’t want a long gap between exchange and completion!

trex227

I would take that article with a huge pinch of salt. Failed completions after exchange due to a mortgage offer being pulled have always been a possibility but it is rare. In the past I worked at two firms for a total of 9ish years, both were big firms with a lot of transactions and I am only aware of 2 instances of this happening. One was some kind of fraud I believe and the other was the client getting a very expensive car on finance after exchange.

The 3 in 10 figure seems to be complete fiction- my spouse is a conveyancer and she’s had no completions fail for any reason this year and neither have any of her colleagues (failed completions are very stressful so it tends to be something that conveyancers are aware of when it happens).

[Deleted User]

trex227 said:

The 3 in 10 figure seems to be complete fiction- my spouse is a conveyancer and she’s had no completions fail for any reason this year and neither have any of her colleagues (failed completions are very stressful so it tends to be something that conveyancers are aware of when it happens).

happened to me once in 6 years so I had the same thought and I suspect its just written in a confusing way to make it seem more scary:

"as many as three in 10 buyers whose chains had collapsed, had ended up losing their deposits as mortgage offers were withdrawn post-contract"

of the buyers whose chains collapse post exchange, and who end up losing deposits, were due to offers being pulled.  So its not 3in10 of all purchases.   

If 10,000 people buy a house, 3000, of them wont complete (general long standing stat of 1in3 doesnt complete),  of those 3000, maybe only 10 of them collapsed post exchange (I suspect lower).  And of those 10, 3 were due to offers being pulled. 

so 3 out of 10,000.  

Numbers are obviously made up for easy maths but it feels more like real life than the 3 in 10 'statistic' 

AskAsk

there is bigger risk because of covid 19 that the sale will fall through between exchange and completion. 
another big risk is that someone along the chain dies from covid 19, which is very possible and so the whole thing collapse between exchange and completion.

some solicitors are very touchy about gettting the money from the lender first before they will agree to exchange.  we had this issue when we sold a flat recently as the buyer's solicitors wanted to make sure that they had the mortage money in their bank account before they would agree to exchange, in case the bank renegade between exchange and completion.

Scotbot

But the buyer has lost their deposit, everyone in the chain gets to keep the deposits excerpt the poor guy at the bottom. At 10% costs shouild be covered

scottishblondie

Scotbot said:

But the buyer has lost their deposit, everyone in the chain gets to keep the deposits excerpt the poor guy at the bottom. At 10% costs shouild be covered

If you get 10% of £330k from your buyer and put up 10% of £660k for your purchase, then you're out £33k if the chain collapses after exchange.  Unless you're downsizing to a cheaper place, you're going to lose something in this situation.

NatNat77

Scotbot said:

But the buyer has lost their deposit, everyone in the chain gets to keep the deposits excerpt the poor guy at the bottom. At 10% costs shouild be covered

What about those who are buying a higher value property than they're selling? That would be us and we'd be significantly out of pocket, so is something I'm concerned about. I don't particularly want to exchange and complete on the same day, if we ever get that far, but I think we might have to 

AskAsk

Scotbot said:

But the buyer has lost their deposit, everyone in the chain gets to keep the deposits excerpt the poor guy at the bottom. At 10% costs shouild be covered

but that has always been the risk for someone buying and the chain falls on its head.  you don't get the 10% deposit back.

Scotbot

AskAsk said:

Scotbot said:

But the buyer has lost their deposit, everyone in the chain gets to keep the deposits excerpt the poor guy at the bottom. At 10% costs shouild be covered

but that has always been the risk for someone buying and the chain falls on its head.  you don't get the 10% deposit back.

You get to keep the 10% deposit paid on your property, minus solicitors fees no doubt. Admittedly if you have paid a higher deposit you then lose out on the difference.

AskAsk

Scotbot said:

AskAsk said:

Scotbot said:

But the buyer has lost their deposit, everyone in the chain gets to keep the deposits excerpt the poor guy at the bottom. At 10% costs shouild be covered

but that has always been the risk for someone buying and the chain falls on its head.  you don't get the 10% deposit back.

You get to keep the 10% deposit paid on your property, minus solicitors fees no doubt. Admittedly if you have paid a higher deposit you then lose out on the difference.

i think if you were buying and paid the deposit but didn't get to move into the purchase, then you can get the deposit back, but you have to do so through the courts.  i thought you could ask the solicitors, who were keeping the deposit as they are not paid to the seller until completion would pay it back, but apprently not so.

TheProfessional

We exchanged 48 hours before completion last week. The whole way though I just thought the whole house buying process almost feels set up to be stressful. You have to put a lot of trust in your seller and buyer. Such a lot of money