Completion date - mortgage offer expiry

ccfc1972

Our buyers’ mortgage offer expires on the 16th January, so we are trying to rush the sale through. How long before the expiry date do we need to complete? Is it ok like a day before, or do we need a few days to make sure all funds are released in time etc?
I have no idea how it works. Would a date of say 11th Jan be workable? 

ccfc1972

Sorry to bring this back to the top, some people may have missed it. Does anyone have any idea?

annetheman

I think once you have an agreed completion date with you e.g. 16th Jan, the buyer can speak to the lender/ask their broker to ask for an extension e.g. 2 weeks or 4 weeks.

I think some lenders have charges for this, depends who they are.

GDB2222

There can be last minute snags, so it's risky to go right up to the wire. Allow a week, preferably two, before the mortgage offer expires, if possible. As annatheman says, it may be easy to get an extension.

ccfc1972

I don't think there's any chance of us getting a completion date until maybe the week before. They have said they can't get an extension, so we're in a very precarious position.

GDB2222

Are you in a chain? How much do you lose if the buyer fails to complete?

ic

If it expires on the 16th, you can complete on the 16th?  If you can exchange before that date but can't complete till after, the lender may extend - but they're not obliged to, and may rerun credit checks which may uncover a reason they choose not to re-offer.

ccfc1972

We are in a chain yes, our purchase won't be ready to complete until the middle of Jan at the earliest we've been told, so I'm sure we can expect that to be the end of Jan at the earliest. The vendors of the property we are buying are flexible and are ready to go any time.
I spoke to our buyers again today and they say that they've been told there is no way at all they can extend their offer, it's either complete by the 16th or it doesn't happen.
So as long as we have agreed a date for completion and it goes through, there shouldn't be a problem with the funds being in place on that date?

GDB2222

If you go for simultaneous exchange and completion on, say, 15 Jan, all those problems go away. Either, everyone is ready on the day, or they are not.  The worst that happens is that you owe some money for removals that don't take place. That's nothing compared to the financial mayhem that ensues if you exchange contracts but your buyer fails to complete.

ccfc1972

What are the financial implications if we exchange but don't complete?
Our solicitors said that the "very earliest" that we could look to complete on our property would be the 14th-15th January. That's if no other queries come up. I can't imagine we would be that lucky.

GDB2222

ccfc1972 said:

What are the financial implications if we exchange but don't complete?
Our solicitors said that the "very earliest" that we could look to complete on our property would be the 14th-15th January. That's if no other queries come up. I can't imagine we would be that lucky.

You lose your deposit on your purchase.

Plus, you are liable for your vendor's costs above 10%, if any.  If they are in a chain for a larger house, then they'll lose 10% of that price, and be responsible for all the losses up the chain, which they'll pass on to you. Plus all the legal and removal costs. Possible hotel and storage costs all the way up the chain.

Essentially, you are liable for the losses of everybody above you in the chain, however large those are.

If your vendors eventually sell to somebody else at a much lower price, you are responsible for their shortfall to the extent it's not covered by your deposit.  Similarly, up the chain.

In short, you can lose a great deal more than your 10% deposit. It's why I asked about whether you're in a chain. Of course, your buyer is responsible for reimbursing you, but they'll probably go bankrupt. As may you.