Being pressured to exchange/complete same day but let the current owners live in the property!!

[Deleted User]

Twins said:

Annisele said:

Twins said:

The estate agent is pressuring me to go ahead with the same day exchange/completion and to let the current owners stay in the property until the end of November which is the earliest they can move out. 

Is the estate agent proposing that his clients pay you any rent until they move out? If not, how kind it would be to give a gift of several weeks/months/years of free accommodation to these people you don't know.

If the estate is proposing that his clients pay you rent, then that would sound remarkably like a "sale-and-rent-back" arrangement. If you don't already have all the relevant permissions - and I assume you don't, or you wouldn't be posting about this - there's a risk you'd be breaking the law. (I'm thinking of sale and rent back, regulated activities, and financial services regulation). NB I'm not saying you would be breaking the law - or that anything bad would happen even you did break the law - only that I think it's a risk, and one you'd be foolish to take in these circumstances.

The EA hasn't proposed anything other than letting them stay in the house and telling us they'll keep it in "show house condition".  They haven't said anything about rent and we haven't even considered anything like that.   I just don't want to go down that route but thank you for putting it so plainly about what it looks like.   EA's are scum and will do anything for their commission.

They're trying to earn a decent living the hard way, sales based jobs aren't easy.

Ramouth

I’m assuming this is to stop you being in a situation where your existing house has been moved over to BTL mortgage but you are still very living in it.  I know mortgage companies are pretty hot on this.  

One solution that occurs to me is for you to complete as suggested, but for the people you are buying from to move into your now BTL while they wait for their new build to be finished.  Meanwhile you move into your new home and settle in.  That way you are not breaching any of your mortgage or insurance conditions.

GrumpyDil

Firstly you cannot complete on the new property and let the purchasers live there. Your mortgage conditions will require vacant possession so I don't understand why your solicitor would even consider it.

Secondly the requirement appears to be simultaneous completion so I would be asking your solicitors to confirm where they are getting the requirement to exchange and complete on same day?

As regards your onward purchase is the proposal to exchange with a fixed completion date or is it to exchange with completion on notice. This is usual for new builds where they ask you to exchange and then give you x days notice to complete. If on notice then this would further complicate matters as there would be no guaranteed completion date, although I suspect it would be before year end as this may well be a house they are targeted to sell by year end.

House buying is very stressful but having a clear understanding of the position will help you manage it. 

Twins

Thank you all for your comments and help.   @GrumpyDil it isn't the solicitor asking us to complete and let the current owners live in the property, it's the Estate Agent working for the vendor who's pressuring us to do this as they said there is no other solution.  

I have pasted the condition that is in our mortgage offer above which states that the completion must happen at the same time as the residential.  As I said, this won't work because the remortgage funds will fund the deposit on the purchase, which won’t be ready to complete for around a month. Current owners have stated there is no way they can move out before the end of November.  The deposit needed will have to be sent to the developer at the top of the chain on exchange as standard with a new build that our sellers are buying,  and we obviously can’t exchange without re-mo completing. 

This seems very unfair as once we complete on our house it turns into a BTL so we shouldn't be living here.  We can't complete on our onwards purchase because the vendor won't move out and the developer for the new build has already given us 3 extensions but said this coming Monday was the last one before he pulls out of the deal.  

Stressed being belief and can't understand why the solicitors can't sort this one out?!

user1977

Twins said:

As I said, this won't work because the remortgage funds will fund the deposit on the purchase

Ah! You hadn't told us you needed the remortgage funds for the deposit. But it now makes more sense. Can't the deposit amount be reduced or found from elsewhere?

Tiglet2

Twins said:

GrumpyDil it isn't the solicitor asking us to complete and let the current owners live in the property, it's the Estate Agent working for the vendor who's pressuring us to do this as they said there is no other solution.  

I have pasted the condition that is in our mortgage offer above which states that the completion must happen at the same time as the residential.  As I said, this won't work because the remortgage funds will fund the deposit on the purchase, which won’t be ready to complete for around a month. Current owners have stated there is no way they can move out before the end of November.  The deposit needed will have to be sent to the developer at the top of the chain on exchange as standard with a new build that our sellers are buying,  and we obviously can’t exchange without re-mo completing. 

This seems very unfair as once we complete on our house it turns into a BTL so we shouldn't be living here.  We can't complete on our onwards purchase because the vendor won't move out and the developer for the new build has already given us 3 extensions but said this coming Monday was the last one before he pulls out of the deal.  

Stressed being belief and can't understand why the solicitors can't sort this one out?!

@Twins you really must stop listening to the Estate Agent.  They are salespeople who are working hard on behalf of the vendor, not you.  They do not have sight of any of the legal paperwork being prepared by the solicitors, they are not an active party to the transaction, they can only phone up and down the chain and create Chinese whispers as they go.  Any advice they give you should be taken with a pinch of salt.  Many solicitors get frustrated with the mess that Estate Agents cause when they try to come up with all kinds of suggestions which don't work in the legal world, not to mention adding stress to clients when there is absolutely no need to.

The only party working on your behalf is your solicitor and they are the only party who really knows when you will be in a position to set a completion date. 

There most certainly is another solution (EA is talking rubbish). Please do not listen to this.  Speak to your solicitor.  Only they and the other solicitors in the transaction can decide how to handle it.

The part you have highlighted from Metro Bank merely means that they are not intending to release the re-mortgage monies to you.  Therefore, the re-mortgage and the purchase are being linked, so the re-mortgage will need to complete first, then the monies will be released to your solicitor acting on your purchase and, since solicitors can only hold onto mortgage monies for a couple of days, your purchase will need to complete within a couple of days after release of the funds.  It does not mean you have to exchange and complete on the same day.  

There will be no renting the house out to the current owner.  They will have to decide whether to move out into a rental to allow you to move in, or you will be asked to wait until the new build is ready.  The EA and the vendor need to acknowledge that your solicitor and your lender will not allow the vendor to stay in the property temporarily when you are purchasing with vacant possession.

TripleH

The key issue is that the vendors new build could be completed anywhere between end November and the election of a competent, sensible government!!.

Do you have any indication where their house is at in terms of completion?

To also reiterate, the moment you complete, the house is not theirs to decide to deal with.

I suspect they have probably exchanged with their developer so keeping you happy and not pulling out at such a late stage gives you much more power than perhaps you realise or the estate agent wants to publicly acknowledge.

loubel

Trying to combine a let to buy in a chain with a new build purchase was always going to be awkward. 

You don't have a deposit available to exchange in advance of completion and your seller has no flexibility on completion dates but has a developer pushing them to exchange.

The simplest way to resolve would be for the seller to sell to you and move into a short-term rental until their new build is ready but it doesn't sound like they want to do that. Has their new property actually been built yet?

TripleH

With a completion date of November, I would expect the new build has most likely exchanged as developers like commitment in advance.

I suspect its the final fittings etc they're onto now.

Twins

loubel said:

Trying to combine a let to buy in a chain with a new build purchase was always going to be awkward. 

You don't have a deposit available to exchange in advance of completion and your seller has no flexibility on completion dates but has a developer pushing them to exchange.

The simplest way to resolve would be for the seller to sell to you and move into a short-term rental until their new build is ready but it doesn't sound like they want to do that. Has their new property actually been built yet?T

That's exactly it.  Their new build has no completion date yet however, they have said they will move out beforehand but NOT before the end of November but that still won't be early enough as the builder wants to exchange ASAP and won't wait until the end of the month.   So now we risk losing the house because of this situation.  

I've been put under a lot of pressure from the estate agent to the point it's affecting my health and I've been unwell the past few days.  I don't think I can take much more of this.