Buying New Build - Lost buyer

cocker100

Good evening,

I'm after some advice or perhaps reassurance to our situation:

I am in the process of buying a new build property with my new partner. We both have current houses that we own with our ex's that are being sold. Mine is being part exchanged and hers is being sold on the open market.

We have reserved our plot which was due to complete sometime in September, and the part exchange is all agreed (even my ex is happy with the price) however the sale of my partners house has fallen through as her buyer has lost their buyer, but they still do want her house.

Everything was in place, we were just waiting for a completion date. Mortgage is approved, the house builder has already sold my current house on (subject to contract) and we have paid for additonal upgrades on our new house.

So my question is will the builder allow us to keep the reservation past the expiry date which is in 3 weeks, or are we at risk of losing our dream home together and all the money we've already paid into it if we cannot sell it by then?

Thanks in advance!

Hoenir

You are at risk. If the property is built and finished. Then the builder will want it sold. 

Perhaps would have best to complete the sale of one the properties first. Prior to reserving. 

gm0

You should check your reservation document and contract terms most carefully. 

Many new build contracts have clauses about loss of deposit/reservation fee.

And also for the developer to be able to trigger completion of the purchase with a deadline - after a short notice period - basically "on demand" when they have finished the house.   Giving them flexibility on when that is and when the countdown timer starts.  Developers don't form flexible chains with 2nd hand sellers.  Cash or outright mortgaged purchase.  And some limited flexibility.

Bridging loans are not as common as long ago. But essentially credit provides the mechanism to unlock this. If one  sale is indeterminate at the point the developer looks like they are about to finish and trigger the completion countdown clock. 

This can very easily put you in a tough position where a chain sale exists fails and restarts. 
And isn't finishing and the developer now has finished and is asking for cash - exactly per the contract you signed.  

If that happens and if you don't sort it or bridge it - then they can dump you if that's what the contract says.
Keep the money. And sell it to someone else.  In line with the agreed terms. They will threaten this to get you to move things along by whatever means.  And if prices have risen - may actually do it.  Less likely if they think they will get less now.  Your PX complicates things depending on "when" that happens during the process.  Your conveyancer should be educating you on what risks you are running on that.

So apply a little game theory to what they say to you. And you to them.  Open and honest may not be your optimal approach to keeping them on the hook.  Keen keen. Moving along.  Making good progress etc.

Or sort out your own contingency bridging for the share of proceeds coming from the open market house via a broker or otherwise.  Hopefully you won't need to do it.  But you might.

cocker100

Just to close this off...........

Luckily we managed to find a new buyer for my partner's house and they are also cash buyers, so all good!!

Offer was only £1,000 less than the other and no chains this time.

Maybe pushed things back by a month or so, but because we can still proceed, the house builder is happy for the sale to continue.

Hugh relief!!

Thanks for your replies!