Early Exchange of Contracts - Need some guidance

fragilecliche

Thank Hovblackctr said:

We were in the same position, it is only the 10% deposit that gets taken as a holding amount.

What you might not realise is that you have to insure the property you are buying from the date of exchange, just in case anything happens to it in that interim period.

Thank you, in our case, that could still mean losing close to £30k though, which still feels like a massive risk.

Yes, more than happy to get insurance etc. In place and we are prepared to progress if we can get to the point where they agree a fixed completion date. We don't mind exchanging contracts early if needed, as long as we get the appropriate insurances in place and have a guranteed completion date in there. What we don't want is to not have this in the contract, have our mortgage offer expire and then not be able to progress. 

What was the outcome for you? 

[Deleted User]

you'll never get a guaranteed completion date.   Absolute best case scenario you'll get a long stop date which is where you can walk away without penalty after this date.  You would usually tie this to your mortgage offer expiry date or perhaps after a renewal if lender allows.  

I would be looking for a 9-12 month mortgage offer and a long stop at the end of this.   If you get a bog standard mortgage with 6 month expiry then they are unlikely to give a long stop cause the property is barely scheduled to be done by this point

Hovblackctr

fragilecliche said:

Thank Hovblackctr said:

We were in the same position, it is only the 10% deposit that gets taken as a holding amount.

What you might not realise is that you have to insure the property you are buying from the date of exchange, just in case anything happens to it in that interim period.

Thank you, in our case, that could still mean losing close to £30k though, which still feels like a massive risk.

Yes, more than happy to get insurance etc. In place and we are prepared to progress if we can get to the point where they agree a fixed completion date. We don't mind exchanging contracts early if needed, as long as we get the appropriate insurances in place and have a guranteed completion date in there. What we don't want is to not have this in the contract, have our mortgage offer expire and then not be able to progress. 

What was the outcome for you? 

Yes we contacted our mortgage company (NatWest) and they extended it to the moving date. We are due to complete on15th December but actually sold in April.

NatalieAGC

I think it’s cheeky of them! I have sold my house - close to exchange now… and they know I’m buying new build - not ready yet.. I  plan to sell and go into rent for 6 months.. that’s normal thing to do. It isn’t fair to drag anyone into the long and potentially messy process. Anything can happen in that time. 

They either sell and move into rent or find another house.. IMO 

fragilecliche

Thanks all! Really helpful information. We've instructed a solicitor and will be pushing for a fixed completion date. Fingers crossed we find a way forward as love the house! 

Thrugelmir

fragilecliche said:

Thanks all! Really helpful information. We've instructed a solicitor and will be pushing for a fixed completion date. Fingers crossed we find a way forward as love the house! 

Too many variables. Weather, availability of materials, availability of trades. The list goes on. Building a house isn't something which can be scheduled months in advance. From the developers perspective they might as well sell to another party. Rather than commit to something over which they've no control. 

MWT

Thrugelmir said:

fragilecliche said:

Thanks all! Really helpful information. We've instructed a solicitor and will be pushing for a fixed completion date. Fingers crossed we find a way forward as love the house! 

Too many variables. Weather, availability of materials, availability of trades. The list goes on. Building a house isn't something which can be scheduled months in advance. From the developers perspective they might as well sell to another party. Rather than commit to something over which they've no control. 

I don't think they are expecting a confirmed completion date from the builder, just a date by which their vendor either has to have completed and moved out, or just move out into rented accommodation while they wait for the builder to finish...

Shift the risk onto the ones that are causing it by buying a new-build.

Thrugelmir

MWT said:

Thrugelmir said:

fragilecliche said:

Thanks all! Really helpful information. We've instructed a solicitor and will be pushing for a fixed completion date. Fingers crossed we find a way forward as love the house! 

Too many variables. Weather, availability of materials, availability of trades. The list goes on. Building a house isn't something which can be scheduled months in advance. From the developers perspective they might as well sell to another party. Rather than commit to something over which they've no control. 

I don't think they are expecting a confirmed completion date from the builder, just a date by which their vendor either has to have completed and moved out, or just move out into rented accommodation while they wait for the builder to finish...

Shift the risk onto the ones that are causing it by buying a new-build.

Then I'd suggest financial inducement of some kind. If the expectatation is that another party will suffer the hassle, financial expense and inconvenience of making alternative arrangements. Compromise has to be negotiated. Demanding simply make other parties defensive and entrenched. 

MWT

Thrugelmir said:

MWT said:

Thrugelmir said:

fragilecliche said:

Thanks all! Really helpful information. We've instructed a solicitor and will be pushing for a fixed completion date. Fingers crossed we find a way forward as love the house! 

Too many variables. Weather, availability of materials, availability of trades. The list goes on. Building a house isn't something which can be scheduled months in advance. From the developers perspective they might as well sell to another party. Rather than commit to something over which they've no control. 

I don't think they are expecting a confirmed completion date from the builder, just a date by which their vendor either has to have completed and moved out, or just move out into rented accommodation while they wait for the builder to finish...

Shift the risk onto the ones that are causing it by buying a new-build.

Then I'd suggest financial inducement of some kind. If the expectatation is that another party will suffer the hassle, financial expense and inconvenience of making alternative arrangements. Compromise has to be negotiated. Demanding simply make other parties defensive and entrenched. 

With respect, it is the ones buying the new build that are making the unreasonable demands here by insisting on a very early exchange and a completely unknown completion date, so I don't see where it is unreasonable to set a drop-dead move out date.

Failing that then I'd suggest finding a different property, just too much uncertainty in this one...

Thrugelmir

MWT said:

Thrugelmir said:

MWT said:

Thrugelmir said:

fragilecliche said:

Thanks all! Really helpful information. We've instructed a solicitor and will be pushing for a fixed completion date. Fingers crossed we find a way forward as love the house! 

Too many variables. Weather, availability of materials, availability of trades. The list goes on. Building a house isn't something which can be scheduled months in advance. From the developers perspective they might as well sell to another party. Rather than commit to something over which they've no control. 

I don't think they are expecting a confirmed completion date from the builder, just a date by which their vendor either has to have completed and moved out, or just move out into rented accommodation while they wait for the builder to finish...

Shift the risk onto the ones that are causing it by buying a new-build.

Then I'd suggest financial inducement of some kind. If the expectatation is that another party will suffer the hassle, financial expense and inconvenience of making alternative arrangements. Compromise has to be negotiated. Demanding simply make other parties defensive and entrenched. 

With respect, it is the ones buying the new build that are making the unreasonable demands here by insisting on a very early exchange and a completely unknown completion date, so I don't see where it is unreasonable to set a drop-dead move out date.

Failing that then I'd suggest finding a different property, just too much uncertainty in this one...

No one is making unreasonable demands. The decision lies with the potential purchaser. As to how much they want the property.  They'll be someone else who does want it if they don't. Will remain a sellers market as long as demand exceed supply. .