Offer vendors money to move into rented to reduce exchange-completion gap

htcclub

A__L said:

If you are the reason that you don't complete you lose your deposit. If they are the reason after exchange then you get your deposit back + interest. It makes sense that they want to exchange before they move out and rent as it is a guarantee. Why do you think you will pull out after exchange?

I wouldn't of my own accord, I want the house. But I have seen evidence of the worst happening to people.

Surrey_EA said:

In a simultaneous exchange/complete, that would mean they take all the risk. Signing up for a rental agreement but without the comfort you'll go ahead. 3 weeks between exch/complete is far from unusual.

Yes its a lot of risk to them, but I am offering to pay their holding deposit though, and also budging by allowing 1-2 weeks gap

Surrey_EA

Paying their holding deposit when they will be expected to sign up for a 12 month rental contract probably isn't much help to them, still leaves them on the hook for a significant amount if you pull out prior to exchange and after they've signed an AST.

I'm not entirely sure why you're happy to agree to a 2 week gap and not 3, but perhaps that's the most sensible compromise, especially as they've found a specific property to rent.

I take the point that your job and your natural aversion to risk are affecting your decision, but the risk of something going wrong after exchange is vanishingly small.

Martico

Have you explored redundancy insurance? That would seem to be your main risk

housebuyer143

It's not fair to make them agree to a same day exchange and completion. My mate was forced into this recently and they ended up outside the house at 5pm waiting for the keys because they didn't get to exchange until midday at the buyers request. Then the buyer was happily moving into their house, however the delay meant the money took time to move up the chain and they couldn't move in. 
Had the buyer changed their mind at that point they would have been unloading their stuff back into their old house.

If you want to move then you need to take a degree of risk. You don't lose anything unless you fall to complete.

If you are overthinking it this much on your first one, you definitely never want to move.. significantly more to go wrong when you are in a chain.

user1977

Martico said:

Have you explored redundancy insurance? That would seem to be your main risk

I don't think that really exists since Covid came on the scene. In any event, it's not going to pay out a lump sum to compensate for losing a 10% deposit.

Martico

user1977 said:

Martico said:

Have you explored redundancy insurance? That would seem to be your main risk

I don't think that really exists since Covid came on the scene. In any event, it's not going to pay out a lump sum to compensate for losing a 10% deposit.

Gotcha, I wasn't aware of that. I was thinking that redundancy potential was the barrier in the OP's mind, so this would mitigate that risk and avoid the deposit loss as the sale would go ahead. 

htcclub

Martico said:

user1977 said:

Martico said:

Have you explored redundancy insurance? That would seem to be your main risk

I don't think that really exists since Covid came on the scene. In any event, it's not going to pay out a lump sum to compensate for losing a 10% deposit.

Gotcha, I wasn't aware of that. I was thinking that redundancy potential was the barrier in the OP's mind, so this would mitigate that risk and avoid the deposit loss as the sale would go ahead. 

Redundancy actually doesn't scare me so much, as I have savings and could get another job quickly.

What scares me, and it might be irrational, but for example a fraudster applying for credit in my name, or my bank pretending they did not see late payments from 5 years ago, then using that to pull the mortgage.

A__L

@htcclub I think these fears are normal. Are you buying on your own?

SDLT_Geek

htcclub said:

SDLT_Geek said:

So your sellers have found a rental.

There is a conveyancing mechanism called “a release“ which might be worth considering in this case.

A release is usually used so as to synchronise exchange of contracts in a chain, but might be useful here so as to synchronise:

(a) your sellers signing the tenancy and

(b) exchange of contracts on the sale to you

and so enable them to agree a shorter completion date.

The mechanics here could be that you instruct your solicitors to “release“ your purchase contract for a set period, usually to the end of the working day.  Terms such as the completion date and deposit would need to be agreed.

That commits you unilaterally, so that if your sellers “take you up” on the release, contracts are exchanged on your purchase without them needing to do more than tell you conveyancers.

Sorry SDLT_Geek, is it related to this screenshot, from the law society? https://www.lawsociety.org.uk/topics/property/formulae-for-exchanging-contracts-by-telephone

How many extra days could this give me do you think? The problem seems that even if I release the contract, I have effectively signed, but are you saying it allows completion earlier than the agreed date?

Yes, Formula C uses the kind of “release” mechanism I was suggesting.  By reducing the risk to your seller of being left homeless, it might encourage them to agree a shorter completion date.  

But in practice now the Christmas/ New Year shut down might reduce options.

user1977

htcclub said:

Martico said:

user1977 said:

Martico said:

Have you explored redundancy insurance? That would seem to be your main risk

I don't think that really exists since Covid came on the scene. In any event, it's not going to pay out a lump sum to compensate for losing a 10% deposit.

Gotcha, I wasn't aware of that. I was thinking that redundancy potential was the barrier in the OP's mind, so this would mitigate that risk and avoid the deposit loss as the sale would go ahead. 

or my bank pretending they did not see late payments from 5 years ago, then using that to pull the mortgage.

Have you ever heard that happening to anyone, anywhere? Some of your other concerns are at least vaguely rational, but that one's crazy....