Seller delaying exchanging contracts - Buying house off of divorcing couple with children - problems

Scarlett2

Discovered a couple of weeks ago that the week we were due to exchange the seller stopped this process due to Divorce settlement not being in place.  All the chain our buyers and ourselves are ready to exchange contracts.

Has anyone else experience this at the 11th hour?  Any advice would be super appreciated

Scarlett2

Also I thought the sellers solicitors could hold the sell of the house within ESCRO for at least 4 months whilst they sort the issues out? Any advice please

t2havock

Start implementing a contingency plan now.  It should be simple enough to say you sell the house and the solicitor keeps the money whilst sellers decide on the split, but there is no way of knowing how amicable the settlements will be, what court proceedings will need to happen. How long those will take! Check there are no charges or restriction on the property (£3) on the land registry site, if your solicitor hasn’t already provided this. 

In our case the husband declared himself bankrupt half way through as they couldn’t agree on the split of the funds, and his creditors put a charge on the house stopping it being sold. Quite extreme but hoped someone had told me at the time to start looking at other places as had to do this 6months after wasting time and money and having to redo mortgage etc and missed duty saving plus properties getting more expensive and less Available.

lookstraightahead

It's a very tricky situation buying from divorcing couples. Obviously the sale of a property is well down the priority list and both parties will be seeking security going forward. Add children to this and it's extremely hard (I've been on the vendors side of the coin).

I would look for something else - it could take ages and ages. Remember one of them could end up homeless.

TBagpuss

It's tricky, and as you haven't yet exchanged neither you, or they, are legally bound.

It's normal that they won't exchange until a financial settlement is in place - while it might be possible for the conveyancing solicitors to hold funds that leaves the parties with no funds and nowhere to live, which is likely to be unacceptable for at least one of them, and in addition solicitors are generally reluctant to hold funds in this way as they then wind up unable to pay out the funds or close their file. 

Start looking for other options.

You can ask the agents if they have any additional information - is the situation that the sellers have not yet agreed a settlement, or is it that they have agreed a settlement but haven't yet got a formal order / haven't got the order back from the court.

If it is the first then it could take months - even in normal circumstances court proceedings within divorce can take 6-8 months for a financial settlement if things aren't agreed, and with Covid delays and court's prioritising more urgent cases such as child contact, the delays are longer.

If they do have an agreement but are waiting for the paperwork to be finalised then that would normally be much quicker - the court's online process is currently aiming to take around 4 weeks to approve orders (and mostly hitting that target) although if they are not done online then the wait can be much longer and will vary depending on the specific court involved.