Same day Exchange & Completion

Amy32

Jamesdobo said:

@Amy32 I am quite surprised this is even a possibility to be honest. Like I said previously, as unlikely as it may be the consequences are awful. 

The thought of losing our entire deposit is very anxiety provoking. But my circumstances haven’t changed since receiving my mortgage offer so just need to hope that it all goes smoothly. We are due to exchange today and complete next week 🤞🏻

Jamesdobo

Good luck!! Im sure it will all be fine  

MWT

Jamesdobo said:

My main concern arises from reading story's of this happening, some of which had no reason to be withdrawn. 

I am self employed, potentially changing the way i work in April due to IR35 so this is a possible reason. I will not be out of work, however there is potential for the way I am paid to change. 

I just dont see why anyone would favour a period of time between exchange and completion if there is no chain. Although the possibility of withdrawal after exchange is low, the consequences are life changing. 

There is always a reason, as I said, it is not in lender interest to simply withdraw for no reason at all once an offer has been made.

Do you currently have a firm mortgage offer based on your current self-employed status, and do you have a reservation on a house yet?

As to why anyone would want a period of time between exchange and completion you have to look at both sides of the situation.

Even without a chain, your builder wants to be sure that as soon as the house is built he will get paid for it, so having both on the same day leaves them unsure that the house is really sold until the last minute. Good for you, but bad for them.

So hardly surprising that the builder will favour buyers willing to give a solid commitment that they will complete, by exchanging first.

Similarly there is the matter of arranging funds, especially when HTB is involved, this stuff takes a little time.

While you feel it is 'unsafe' to have a gap between exchange and completion, others need the gap or feel it is unsafe to proceed with a buyer that is unwilling to commit.

Amy32

Just to add our house is ready to move in to hence why we can exchange and complete in quick succession. Many new houses you will have to exchange and complete several months apart.  

Jamesdobo

The house is a new build but is complete and ready to move into. 

I have no reason to suspect my mortgage will be withdrawn as i have been completely transparent. But again, it comes back to the fact that it has happened to others and the consequences are dire. If the buyer pulls out and the seller needs to re-list its not anywhere near as damaging as the buyer loosing a deposit, is it? 

MWT

Jamesdobo said:

The house is a new build but is complete and ready to move into. 

I have no reason to suspect my mortgage will be withdrawn as i have been completely transparent. But again, it comes back to the fact that it has happened to others and the consequences are dire. If the buyer pulls out and the seller needs to re-list its not anywhere near as damaging as the buyer loosing a deposit, is it? 

If the house is built and ready then the builder is well motivated to agree to a short gap between exchange and completion as demand was obviously not there at the price they are asking.

What have they said to you about the Exchange date? Odds are they would welcome a quick completion if the house is standing empty...

Yes, there is obviously a different scale of risk between buyer and builder, but you are not going to get a builder to completely de-risk your experience unless they have no other options.

In this case you may find the builder quite amenable to a short gap, but if you are buying off plan in an area with high demand then much less likely.

Sotts

Once you exchange you and the seller are legally tied in. Why would your offer be withdrawn after exchange.   The lender asks for significant changes , eg change of job, change of employment status before exchange, not between exchange and completion.
If you insist on this, you're limiting your sellers as if there is a chain, this isn't practical.

davidmcn

Sotts said:

The lender asks for significant changes , eg change of job, change of employment status before exchange, not between exchange and completion.

Think you've misunderstood this - the lender will want to know about any material changes before completion. Whether or not you've exchanged is nothing to do with the lender. So borrowers are at risk if they are contractually committed to the purchase but the mortgage is withdrawn because of a change in circumstances. 

Rosemary1982

Hello, I had an offer withdrawn after issued by Santander with no reason given and no change in circumstances.  I’m now in the process of porting my current mortgage with NatWest to the new property and am insisting on an exchange and complete  on same day. We have no chain as property we are buying is empty so no reason we cannot do this.  The reason for the gap in exchange and complete is usually in place where there is a chain so all parties can prepare for completion. 

tripled

Jamesdobo said:

My main concern arises from reading story's of this happening, some of which had no reason to be withdrawn. 

I am self employed, potentially changing the way i work in April due to IR35 so this is a possible reason. I will not be out of work, however there is potential for the way I am paid to change. 

I just dont see why anyone would favour a period of time between exchange and completion if there is no chain. Although the possibility of withdrawal after exchange is low, the consequences are life changing. 

If you're not already, using a specialist contractor broker will help mitigate this. There are lenders who are comfortable with the different contract types, for example Accord explicitly advertise accepting outside, inside and umbrella on their website.