Help! Upper chain requires 2 weeks between exchange and completion

Benh86123

Hi all,

We're having a nightmare with buying a property for the first time.

To cut a long story short there is 3 of us in the chain (Us,our sellers & upper chain)

Property for upper chain requires works before they move in and they've been given permission to have the keys between exchange and completion.

As soon as a completion date is agreed the upper chain demands we exchange within a certain time and it isn't giving us enough time for our solicitor to request from our lender that funds will be available in time - as an example we had a completion date set for 27th October on Monday but we were told we had to exchange by Wednesday and we still haven't heard back from Santander.

The completion date has now changed (today) to 3rd November but we were told to meet this date we would need to exchange on Monday which again is impossible due to our solicitor now needing to request funds again for a new completion date.

Our sellers agents have told us to exchange before receiving this confirmation as chances of things going wrong are so small (we aren't going to do this and possibly risk losing our deposit)

I understand the upper chain needs time to get in and get some of the work done but surely this isn't our issue and our solicitor is just doing things the way things should be done?

Appreciate any advice anyone can offer.

Thanks,

Ben

housebuyer143

It's very common to have weeks in between exchange and completion. Your lender doesn't need to do anything before exchange as long as you have a valid mortgage offer. 
Your solicitor cannot request the funds until closer to the time and definitely will not get any money sent from the lender until the day before completion. 

What you seem to want is same day exchange and completion which isn't common and isn't recommended if you are in a chain so you would be unreasonable to expect this.. I am not sure what confirmation you are expecting from the lender? 

eddddy

So there are 3 parties in the chain...

• Each of those 3 parties is perfectly free to put forward their requests for exchange dates, completion dates etc

• Each of the other parties is perfectly free to decline the request - either because it's impossible, or it's inconvenient, or whatever

• But ultimately, an exchange date and completion date that works for all 3 parties has to be found - otherwise the transactions will never happen

So one party in your chain has requested that you all exchange on Monday 16th and complete on 3rd November...

...but you will be declining that request, because it sounds like your mortgage lender won't be ready.

So some more negotiation is required to find some different dates that will work for everyone.

It's perfectly normal, and not really a big deal.


(The estate agent is probably trying to make it sound like a big deal, because they want their commission asap.)

user1977

Benh86123 said:

Hi all,

As soon as a completion date is agreed the upper chain demands we exchange within a certain time and it isn't giving us enough time for our solicitor to request from our lender that funds will be available in time - as an example we had a completion date set for 27th October on Monday but we were told we had to exchange by Wednesday and we still haven't heard back from Santander.

This seems to be an odd and pointless additional paranoid step added in Covid times - up to then it was safe to assume that you could rely on a mortgage offer and funds would be forthcoming whenever the solicitors requested them, but then solicitors started to insist on asking the lender "are you sure we will get the money on x date?" and refusing to exchange until they got a reply.

I don't see the point, because even when we have had lockdowns and financial turmoil, lenders were not pulling mortgage offers (even if technically they could - but they still could even after the subsequent confirmation...).

housebuyer143

user1977 said:

Benh86123 said:

Hi all,

As soon as a completion date is agreed the upper chain demands we exchange within a certain time and it isn't giving us enough time for our solicitor to request from our lender that funds will be available in time - as an example we had a completion date set for 27th October on Monday but we were told we had to exchange by Wednesday and we still haven't heard back from Santander.

This seems to be an odd and pointless additional paranoid step added in Covid times - up to then it was safe to assume that you could rely on a mortgage offer and funds would be forthcoming whenever the solicitors requested them, but then solicitors started to insist on asking the lender "are you sure we will get the money on x date?" and refusing to exchange until they got a reply.

I don't see the point, because even when we have had lockdowns and financial turmoil, lenders were not pulling mortgage offers (even if technically they could - but they still could even after the subsequent confirmation...).

And even if the lender did reply and say no problems, I doubt that is legally binding and would have some caveat so if they found a reason to pull the offer before the completion date, they would still do it.

I can see the OP is scared about something going wrong but there is significantly a higher chance of something going wrong for everyone else in the chain with same day exchange and completion. Imagine all stuff in a van moved out and then being told that it wasn't able to go ahead that day. That happens significantly more I imagine than an offer being pulled last minute.

Benh86123

housebuyer143 said:

It's very common to have weeks in between exchange and completion. Your lender doesn't need to do anything before exchange as long as you have a valid mortgage offer. 
Your solicitor cannot request the funds until closer to the time and definitely will not get any money sent from the lender until the day before completion. 

What you seem to want is same day exchange and completion which isn't common and isn't recommended if you are in a chain so you would be unreasonable to expect this.. I am not sure what confirmation you are expecting from the lender? 

I don't want anything - I'm ready to exchange whenever.. the issue is that top of the chain needs 2 weeks between exchange and completion as they are getting the keys after exchange and there is lots of work to be done. 

The issue is our solicitor has said if they request funds like they have now for completion on the 27th October, if we don't complete on that date and its too long after the funds have to be returned.

So heres the scenario from today... we were told Upper chain can't complete on the 27th now so have to move it back to the 3rd November but to meet this date we need to exchange on Monday... how can we do this when our solicitor now has to request approval of funds again and the current wait time is around 7 days from Santander.

user1977

Benh86123 said:

housebuyer143 said:

It's very common to have weeks in between exchange and completion. Your lender doesn't need to do anything before exchange as long as you have a valid mortgage offer. 
Your solicitor cannot request the funds until closer to the time and definitely will not get any money sent from the lender until the day before completion. 

What you seem to want is same day exchange and completion which isn't common and isn't recommended if you are in a chain so you would be unreasonable to expect this.. I am not sure what confirmation you are expecting from the lender? 

So heres the scenario from today... we were told Upper chain can't complete on the 27th now so have to move it back to the 3rd November but to meet this date we need to exchange on Monday... how can we do this when our solicitor now has to request approval of funds again and the current wait time is around 7 days from Santander.

Your solicitor does not have "to request approval of funds". Like I said above, that's just an added complication invented by your solicitors.They already have the mortgage offer. That's all they need to exchange.  All they need to do is request the funds for the completion date.

Tiglet2

I think you're getting a bit too hung up on this.  Solicitors are used to dealing with lenders and will know when to request funds.  Sometimes they do have to return the funds if ordered too early, but it's easy enough to get the funds re-sent a few days later though you might find a second fee added for the two transfers.  Lenders will often say they need 7 days to send funds but they can do it very quickly if they need to.  Once all the parties have agreed on the completion date, leave it to the professionals to work out the rest.  Exchange dates are not set, completion dates are.

housebuyer143

Benh86123 said:

housebuyer143 said:

It's very common to have weeks in between exchange and completion. Your lender doesn't need to do anything before exchange as long as you have a valid mortgage offer. 
Your solicitor cannot request the funds until closer to the time and definitely will not get any money sent from the lender until the day before completion. 

What you seem to want is same day exchange and completion which isn't common and isn't recommended if you are in a chain so you would be unreasonable to expect this.. I am not sure what confirmation you are expecting from the lender? 

I don't want anything - I'm ready to exchange whenever.. the issue is that top of the chain needs 2 weeks between exchange and completion as they are getting the keys after exchange and there is lots of work to be done. 

The issue is our solicitor has said if they request funds like they have now for completion on the 27th October, if we don't complete on that date and its too long after the funds have to be returned.

So heres the scenario from today... we were told Upper chain can't complete on the 27th now so have to move it back to the 3rd November but to meet this date we need to exchange on Monday... how can we do this when our solicitor now has to request approval of funds again and the current wait time is around 7 days from Santander.

If you exchange then you will almost certainly complete on the given date. It's exchange dates that are set loosely, not completion dates. 
Having exchange and completion 2 weeks apart means it's significantly less likely the funds will need to be sent back. 

Lenders don't need 7 days to request funds, obviously it's preferred but if needed many can do it with a days notice. 

As said before, if you have a valid mortgage offer then that's all you need as there is no reason to think they won't pay out on the day. Your solicitor requesting funds for the completion date that isn't guaranteed doesn't really make sense, as completion dates are not set until you exchange.

The solicitor does this dozens of times a week, so they should be advising you. What the seller is asking isn't anything new - this is how most sales proceed and they do so with no problems. 

Benh86123

I get all that everyone has said above but what worries me and my partner is that our solicitor has stated on numerous occasions if we exchange before they receive approval from the lender and for whatever reason (we have a valid mortgage offer) the lender withdraws the offer we are liable for others expenses for breach of contract and to lose our deposit that we have saved for years.

I know there is a very very small chance of this happening but its scared the life out of us and our solicitor has stated it has happened before.

As ftbs we are guided by our solicitor.

housebuyer143

Benh86123 said:

I get all that everyone has said above but what worries me and my partner is that our solicitor has stated on numerous occasions if we exchange before they receive approval from the lender and for whatever reason (we have a valid mortgage offer) the lender withdraws the offer we are liable for others expenses for breach of contract and to lose our deposit that we have saved for years.

I know there is a very very small chance of this happening but its scared the life out of us and our solicitor has stated it has happened before.

As ftbs we are guided by our solicitor.

It sounds like your solicitor is just covering their backs but I understand it's scary. I would ask them how likely it is that this would happen and how they do exchange and completion with a gap in between normally. 
There is always a risk with anything unfortunately wherever way you do it, but mortgage offers are not normally withdrawn unless they find fraud or something so the risk is so low, esp with a small gap.