Am I worried for nothing? Exchanging 3 months prior to completion.Stressing out

user1977

Thrugelmir said:

user1977 said:

Thrugelmir said:

cramsteems said:

aoleks said:

this could be financial suicide, don't agree to it any cost. extremely risky...

We are going to try and make it the sellers responsibility to insure the property between exchange and completion. 

The sellers insurance provides you with no protection. As you are not the insured under the terms of the policy. 

You couple that with risk only being transferred on completion (and presumably a condition that either party can pull out if there is significant damage).

Property suffering a fire during the period between exchange and completion is an expensive gamble to take. 

What's being gambled, if the deal is off? Seems to be more risky to be obliged to complete the purchase of a smouldering ruin, even if you do have insurance to sort it.

What I'm describing is how just about every purchase in Scotland proceeds, and there's generally a longer period between "exchange" and completion than in England.

LAD917

What works in other countries is unlikely to work here, as it seems like the developers / vendors are insisting on unconditional exchange. They're clearly going to reject anything that allows the buyers to pull out for any reason.

If I were in the OP's shoes, I'd probably take the risk as long as the completion date was guaranteed -- i.e., that the sellers must complete/move on that date even if the new build is not ready.  This assumes their jobs are secure (as they say) and their ability to get a mortgage is typical / they're not stretched to the brink.

Yes, it's a risk, but there are also risks in doing nothing: losing the house, potentially not finding something else for a long time, when mortgage rates will likely be higher, prices may be higher, etc.

We're talking about very low likelihood events - job loss, fire, etc. in the next 90 days.

MaryNB

user1977 said:

Thrugelmir said:

cramsteems said:

aoleks said:

this could be financial suicide, don't agree to it any cost. extremely risky...

We are going to try and make it the sellers responsibility to insure the property between exchange and completion. 

The sellers insurance provides you with no protection. As you are not the insured under the terms of the policy. 

You couple that with risk only being transferred on completion (and presumably a condition that either party can pull out if there is significant damage).

Section 5 of the Standard Conditions of Sale puts the risk on the buyer from the date of the contract, not completion. There is no onus on the seller to provide insurance unless specified in the contract.

cramsteems

LAD917 said:

What works in other countries is unlikely to work here, as it seems like the developers / vendors are insisting on unconditional exchange. They're clearly going to reject anything that allows the buyers to pull out for any reason.

If I were in the OP's shoes, I'd probably take the risk as long as the completion date was guaranteed -- i.e., that the sellers must complete/move on that date even if the new build is not ready.  This assumes their jobs are secure (as they say) and their ability to get a mortgage is typical / they're not stretched to the brink.

Yes, it's a risk, but there are also risks in doing nothing: losing the house, potentially not finding something else for a long time, when mortgage rates will likely be higher, prices may be higher, etc.

We're talking about very low likelihood events - job loss, fire, etc. in the next 90 days.

Thanks for the comment. We are leaning towards taking the risk, we have very stable jobs and no financial commitments currently or due to appear. Our mortgage is 4.5x salary which I assume is standard? We have the long stop date at which the seller must move out, I have confirmed this with the solicitor, if they don’t we should get our deposit back and could take them to court for not completing. Although if this does happen we will likely renegotiate completing but would need another mortgage offer as ours expires the day of completion.

lookstraightahead

Rather you than me, op. 
What people do for bricks and mortar 

user1977

MaryNB said:

user1977 said:

Thrugelmir said:

cramsteems said:

aoleks said:

this could be financial suicide, don't agree to it any cost. extremely risky...

We are going to try and make it the sellers responsibility to insure the property between exchange and completion. 

The sellers insurance provides you with no protection. As you are not the insured under the terms of the policy. 

You couple that with risk only being transferred on completion (and presumably a condition that either party can pull out if there is significant damage).

Section 5 of the Standard Conditions of Sale puts the risk on the buyer from the date of the contract, not completion. There is no onus on the seller to provide insurance unless specified in the contract.

Yes, I know that's the standard conditions. We're talking about a variation to those conditions.