Long time between exchange and completion.

LandM1

The vendors of the house on which we’ve had an offer accepted are proposing a completion date in the middle of October. Searches etc are done so they want to exchange as soon as possible. We are fine with the completion date but don’t see why we should be paying £50 000 so early or be insuring the property at this stage. Our solicitor says he’d usually suggest the start of October. 

They’re buying a new build and said they’re being pressured to exchange now and don’t want to do it unless we’ve exchanged and they’re ensured the sale. I don’t really think it’s quite right, also their solicitor apparently will be in charge of the funds. She’s their daughter! We are buying for cash and will be paying considerably over the asking price as it went to last and final offers. Am I being unreasonable?

CSI_Yorkshire

Exchange and completion dates are a negotiation.  If you're not happy with them, say no.  It would be normal for all of a chain to exchange at the same time though, so their request isn't particularly unusual.

Why does their solicitor being their daughter have anything to do with it?

Flugelhorn

Developers often push for exchange and then expect the whole chain to complete "on notice" sometime in the future. Re insurance - we had 8 weeks between ex and and comp and our solicitor said we would struggle to get insurance if it was over 28 days so the contract was amended to ensure that the vendor remained responsible for insurance for the whole period

TBG01

I don’t really think it’s quite right, 

On what basis? It's common for the seller to use the deposit for their onward new build purchase. This has been the case for years. 

also their solicitor apparently will be in charge of the funds

See above.

She’s their daughter!

And what are you implying?

We are buying for cash and will be paying considerably over the asking price as it went to last and final offers

Why would you think this makes a difference? You weren't forced to make an offer or pay the price you have.

Am I being unreasonable?

Yes.

jlfrs01

I was in the same situation as the OP's vendor myself when buying a new build 18 months ago. 

As Flugelhorn wrote, builders like to call the shots but if you agree with your Solicitor you could look to negotiate, either with the date or by offering a smaller amount for the exchange, or both.

It matters not the vendor's Solicitor is their daughter, she'll obviously be bound by industry regs, etc. It may be tricky if the vendors have signed contracts with the builder committing them to specific timeframes and deposits, etc.

EssexHebridean

Your solicitor will be checking that the deposit money is going to the correct firm, this is all regulated and it is protected. 

The advantage of an earlier exchange is that you do at least then have them tied in - so by all means say you want to push it to nearer the expected completion date but be prepared for the fact that this may mean the chain collapses - your sellers will need to exchange on their onward purchase until the same time as they exchange on their sale to you.

It is very commonplace for newbuilds to end up with a long gap between exchange and completion - and also sometimes for them not to have a "set" completion date - is this something that you are able to work with if it proves to be the case? 

saajan_12

LandM1 said:

The vendors of the house on which we’ve had an offer accepted are proposing a completion date in the middle of October. Searches etc are done so they want to exchange as soon as possible. - are you happy to be tied into the purchase for that long (ie not worried about job changes etc that might put the mortgage offer at risk)?
We are fine with the completion date but don’t see why we should be paying £50 000 so early or be insuring the property at this stage. - how much is the insurance.. unlikely to be much. Is the deposit £50k - if you could keep it in a high interest account for another 2 months that could earn you ~£500.. What % of the purchase price does that represent? You could suggest a lower amount is sent upon exchange, thought you'd still be liable for the full 10% if you fail to complete - that's a pretty standard clause your solicitor can draft. 
Our solicitor says he’d usually suggest the start of October. 

They’re buying a new build and said they’re being pressured to exchange now and don’t want to do it unless we’ve exchanged and they’re ensured the sale. I don’t really think it’s quite right, - why? That's pretty normal.. developers usually expect early exchange, and most people buying and selling would exchange on both transactions at the same time. 2 months difference is actually pretty good going, it can be 6-12 months for others. 
also their solicitor apparently will be in charge of the funds. She’s their daughter! - if she's an actual solicitor, then collecting the funds means she gives an undertaking to use them appropriately for the purchase or return them if due.. If she fails to do that then she would be struck off the professional register. Also she'd be covered by insurance which would make you whole. I don't think this is a worry. 
We are buying for cash and will be paying considerably over the asking price as it went to last and final offers. - well that might mean they are unwilling to bend as they have a popular property, and perhaps they think they'll get another buyer if you make demands they don't like. Am I being unreasonable?

What would you like to happen.. the whole chain needing to exchange together and early is pretty normal for a new build, and for 2 months its not too onerous on you. Is it fixed completion in Oct or on notice? So you could 
1) go with it.. really your losses are small (£500 + some insurance); or
2) renegotiate to £500 lower to offset the losses above (but then is it worth the hassle); or
3) refuse to exchange until Oct. Your seller wouldn't exchange on their new build, so if the developer pulls out, the chain falls through and some/all the parties in the chain start again, spending new money on mortgage, searches etc.