Help! Upper chain requires 2 weeks between exchange and completion

user1977

Benh86123 said:

Nope. We've signed and returned the contracts and there was nothing mentioned about the difference between the 2 deposits.

Admittedly this is far from the first time I've heard this sort of thing on the forum, but given you're paying your solicitor many £££££s to (among other things) give you advice about what the heck is going on, I would gently suggest to them that they ought to explain to you what the papery things with the words on them actually mean...

Benh86123

user1977 said:

Benh86123 said:

Nope. We've signed and returned the contracts and there was nothing mentioned about the difference between the 2 deposits.

Admittedly this is far from the first time I've heard this sort of thing on the forum, but given you're paying your solicitor many £££££s to (among other things) give you advice about what the heck is going on, I would gently suggest to them that they ought to explain to you what the papery things with the words on them actually mean...

It has been an absolute nightmare, we are suppose to be guided by our solicitor as we have no idea what the heck is going on. It didn't help that towards the end of our process our solicitor left and someone else has taken over, it was great before but the new conveyancer not so great..

Would I be right in saying that most of the time this 'risk of losing our deposit' probably wouldn't be mentioned and the process would just proceed as normal? I know as stated before there is always a risk but I'm guessing it probably isn't as emphasised as much to a client as it has been to us?

We just want the transaction to progress but our conveyancer is very 'robotic'.

Thanks for all your advice.

Ben

user1977

It's reasonable to explain to you what the consequences of a breach of contract (whether by you or the vendor) would be, or various other disaster scenarios (house burning down etc) - that doesn't mean they're at all likely to happen, but given the amounts at stake you ought to understand them.

As discussed above, the step about asking the lender to confirm they will release the funds is not something anybody here considers necessary (though not the only time we've heard about it happening).

But it is purely to protect your interests, so if you're content to take the (almost nil) risk then you should be able to instruct your solicitor to go ahead anyway, especially if it's actually obstructing the whole transaction from taking place.

Ksw3

Exchange deposit is usually 10% of purchase price but this can be negotiated prior to signing the contracts. I guess if 2 weeks was too much risk for you you could try and negotiate to a 5% exchange deposit. 

Your mortgage deposit is what % of the property you are buying in cash. 

For example, £300,000 House. 10% exchange deposit of £30k but you could have a 50% LTV and so you would have another £120k not at risk (unless the damages were ridiculous). 

If you're a FTB with a 10% deposit then it's likely both are the same but this is not always the case.

eddddy

This is going away from the original question - but perhaps it's worth clarifying some comments in this thread.

• If you fail to complete (breach the contract), the contract will almost always say that you lose a minimum of 10% of the purchase price.

• Even if you've only paid a 5% deposit at exchange - your seller would get that 5% from the solicitors, and then claim the remaining 5% (or even more) from you.

• If you're in a chain, and you fail to complete, you will be responsible for the losses of everyone in the chain. That could add up to much more than 10% of the purchase price of the property you were buying

But as others have explained, it's extremely unlikely that your mortgage lender would do anything that results in your failing to complete.

Benh86123

Thanks for everyone's comments.

I guess I'm right in saying that regardless of our situation, we would find ourselves in exactly the same situation if we brought any other house that as soon as we exchange if something was to go wrong we risk losing our deposit?

I think we're going to have to bite the bullet and agree to exchange before santander send back approval that funds will be released on the day otherwise we are going to go round in circles.

powergen_insider

Benh86123 said:

I guess I'm right in saying that regardless of our situation, we would find ourselves in exactly the same situation if we brought any other house that as soon as we exchange if something was to go wrong we risk losing our deposit?

Yes.  If you exchange and then don't ever complete, you likely lose your deposit regardless of circumstances.  This isn't a risk exclusive to your precise situation.

Really really rare though.

Surrey_EA

Benh86123 said:

Thanks for everyone's comments.

I guess I'm right in saying that regardless of our situation, we would find ourselves in exactly the same situation if we brought any other house that as soon as we exchange if something was to go wrong we risk losing our deposit?

I think we're going to have to bite the bullet and agree to exchange before santander send back approval that funds will be released on the day otherwise we are going to go round in circles.

Sales falling through between exchange and completion are astonishingly rare, as are mortgage offer being withdrawn after exchange, and only really happen when there has been a significant change in the borrowers circumstances.

I don't quite understand why your solicitor is insisting on requesting funds in this way.

EssexHebridean

Benh86123 said:

Thanks for everyone's comments.

I guess I'm right in saying that regardless of our situation, we would find ourselves in exactly the same situation if we brought any other house that as soon as we exchange if something was to go wrong we risk losing our deposit?

I think we're going to have to bite the bullet and agree to exchange before santander send back approval that funds will be released on the day otherwise we are going to go round in circles.

Hopefully your solicitor has already submitted the certificate of title (the document which officially asks for the funds) to Santander. The usual idea of doing that ahead of exchange is simply that if the lender do want to raise any final issues, they have a chance to do this, as well as ensuring that yes, the funds are ready and waiting.

Generally in the firm I work for, we do want to know that the CoT has landed - these days they are mostly sent by email, or even via an electronic form on the lender's or a third party website, so that confirmation is pretty much immediate. Santander still accept by fax - so when faxing one to them I will always get a report confirming that the fax has sent successfully. if it is particularly short notice we will give them a shout before exchanging just to confirm that they are going to be able to make the shorter timescale - but in your case two weeks is (or should be, assuming the transaction is pretty "normal") ample. Once the CoT is sent, most lenders will confirm a few days later that they have it, and that the funds will be released as requested. 

Hamlet22

Some conveyancers are unsure of their skill and will refuse to exchange without not only requesting mortgage money for the date of completion but actually receiving confirmation back that the lender will release it for that date. The better conveyancers don't need to do this and will exchange then request mortgage money. Most lenders ask for 5 days but almost all will do it within 3. Just comes down to the individual conveyancer - neither can be blamed professionally, as waiting isn't unreasonable, however annoying.