Buying a house sold as part of a part exchange scheme

slhchk

I am trying to figure out all the parties / dependencies in my purchase transaction and in general how part exchange schemes work from the contracting standpoint.

I am buying a house that is being part exchanged for the new build. I am at a stage that I am ready to exchange, the "seller" appears on my contract is the new build developer (rather than the occupier). Am I right to assume the house is already sold (with contract exchanged) by the occupier to the developer when the occupier signed up for the part exchange scheme, so my transaction is not dependant on the transaction between the occupier and the developer? Or am I in a chain?

user1977

"Dependant" in what sense? If the occupier isn't going to move out until the newbuild place is ready, you're depending on the builders finishing their building. I expect the onward purchase is already exchanged - though if you're ready to exchange, this seems a rather late stage to be querying that.

eddddy

Has the 'occupier' already moved out of the house you're buying and is in their newbuild?

Or is the 'occupier' still living in the house you want to buy?

If they're still in the house, you're effectively in a chain of two. For example, you can't complete until the occupier's new house is ready and they complete.

If the occupier is still in the house, you might have to "complete on-notice" - so you won't know the date in advance. (And check for a long-stop date)

sheffield_soldier

I'm in the exact same position. 

The current occupier has to exchange first, then they will exchange with you. No other chain than that. We just have to wait for the house to be ready and I do expect some delays. 

slhchk

user1977 said:

"Dependant" in what sense? If the occupier isn't going to move out until the newbuild place is ready, you're depending on the builders finishing their building. I expect the onward purchase is already exchanged - though if you're ready to exchange, this seems a rather late stage to be querying that.

Initially, the vendors (developer) wanted to exchange on 20 September. It didn't happen because it took me much longer than expected to get my mortgage offer + conveyancing processing time after. The "sales progressor" representing the developer has been chasing me to exchange contracts. I've finally signed everything last Thursday and transferred the deposit to my solicitor last Friday and my solicitor has been ready to exchange since. The sales progressor even called me and said they want to exchange Friday afternoon. But for some reason, the exchange didn't happen on Friday, neither today. I spoke to the EA and he said "they are waiting for the developer at the top to be ready". But the sales progressor has been chasing me all week to exchange and now the developer is not ready?? I am just confused and anxiously waiting for exchange..

slhchk

eddddy said:

Has the 'occupier' already moved out of the house you're buying and is in their newbuild?

Or is the 'occupier' still living in the house you want to buy?

If they're still in the house, you're effectively in a chain of two. For example, you can't complete until the occupier's new house is ready and they complete.

If the occupier is still in the house, you might have to "complete on-notice" - so you won't know the date in advance. (And check for a long-stop date)

Yup - occupier is still in the house and completion on notice for me too. 

I am just wondering if I am dependant on the occupier for the exchange of contracts between me and developer, supposedly occupier already exchanged contracts with developer on the new build (don't they have a mandatory 21/28 days exchange policy)? 

slhchk

sheffield_soldier said:

I'm in the exact same position. 

The current occupier has to exchange first, then they will exchange with you. No other chain than that. We just have to wait for the house to be ready and I do expect some delays. 

I thought you have to exchange within 21/28 days for new builds? So occupier should have already exchanged with the developer. My offer was accepted and the conveyancing process started 2.5 months ago. This is the part I am trying to figure out.

sheffield_soldier

Wow, that's a long time. I know from speaking with the developers agent that poeple in the house we are buying are going to exchange very soon and then we will follow. 
They were clear from the start with me that it has to be within 4 weeks, not that I am moaning. 

slhchk

sheffield_soldier said:

Wow, that's a long time. I know from speaking with the developers agent that poeple in the house we are buying are going to exchange very soon and then we will follow. 
They were clear from the start with me that it has to be within 4 weeks, not that I am moaning. 

Maybe the developer is just busy. I’ve been waiting to exchange since last Friday…

tinytiddles

Having been on “the other side” of this - i.e the person buying the new build via PEx, the developers tend to be in no hurry at all despite what they say about the 28 days business. FYI it’s 28 days from issue of contracts, not from reservation.

They took blooming ages to do all of the survey work and issue the contracts and it ended up being me kicking their backsides to exchange contracts in the end (our new home was already built). I hate to say it but I think you’ll just have to be patient - when their buyer of our old house was getting a bit antsy with the developer they just said tough you’ll have to wait. 

slhchk

tinytiddles said:

Having been on “the other side” of this - i.e the person buying the new build via PEx, the developers tend to be in no hurry at all despite what they say about the 28 days business. FYI it’s 28 days from issue of contracts, not from reservation.

They took blooming ages to do all of the survey work and issue the contracts and it ended up being me kicking their backsides to exchange contracts in the end (our new home was already built). I hate to say it but I think you’ll just have to be patient - when their buyer of our old house was getting a bit antsy with the developer they just said tough you’ll have to wait. 

ahh that explains it. the developer was probably waiting for me to be ready to exchange to prep the contracts for the new build. So now they are getting ready to exchange with their buyer before I can exchange with them. thanks for the insight