Buying house that is being Part-exchanged

mage_afereld

So my husband and I are first-time buyers. We are buying a house that the current occupiers have put up for part-exchange to buy a new build. 

We are up to the contract stage of the process but our solicitors are in a back in forth with the developer's solicitors who are selling the property about assurances regarding the title - as the current occupiers are the ones on the title currently and we would be entering a contract with someone who does not even legally own the property. Our solicitors are saying it's too risky as they aren't giving enough assurances about timelines etc. and are also telling us that our lender is unlikely to agree. 

This all seems reasonable, and logically makes sense. But as first-time buyers we are wondering whether our solicitors are just being awkward... we don't know. 

But today the exchange company contacted my husband and I asking about whether we have received the contract to sign - and have put a deadline for exchange for tomorrow! First we heard about it. And as far as we know from our solicitors it is not acceptable - and also comes without any timelines for completion. House was due to finish in January but the developer's solicitors have given no firm timeline. The solicitor also explained the contract needs to also go to the lender to okay - the exchange deadline has literally come out of nowhere and is completely not feasible.

Anyway - they are saying they'll put it back on the market if it's not done. 
I feel completely sick. We love the house and now it looks like we are going to lose it. 

Does anyone have any experience with this? Is our solicitor doing the right thing? Because all they keep coming back with is a contract signed from the current owners with them for the exchange, and our solicitor says it isn't enough, and that it it unlikely to be acceptable for anyone. Or is this just a tactic... 

We will be completely heartbroken if we lose it... Is this likely at this stage? We have said all along we aren't in a hurry... It would make no sense to put it back up in this market... we had our offer accepted at the very end of July! They are likely to get less for it. 

Any advice?

mebu60

Who is 'the exchange company'? Why are they contacting you and why are you doing anything other than referring them to your solicitor? Have you told your solicitor about this contact? If so, what did they say? 

quotememiserable

It means the builder isn't finished, and doesn't want to commit to a date. But they do want you to exchange so they know the sale is safe. Personally I'd offer to exchange provided they also agree to a completion date.

mage_afereld

mebu60 said:

Who is 'the exchange company'? Why are they contacting you and why are you doing anything other than referring them to your solicitor? Have you told your solicitor about this contact? If so, what did they say? 

They are acting for the seller (developer) and tend to contact us when they want our solicitor nudged a bit. That's why I wonder whether it's just another tactic, because it stresses us out and we ring the solicitor and gets them to act. But in this case I don't see how we can until the title issue is addressed properly. They have assured me they would be getting back to them today - although I've had no update. Everything happened after 3pm... 

user1977

Why does your solicitor think the contract needs to be run past your lender? That doesn't sound normal. The lender isn't a party to the contract.

Are there actually any title issues? Part-exchanges are pretty commonplace and I wonder if the problem is your solicitor being unfamiliar with the process, rather than the developer doing things oddly.

mage_afereld

quotememiserable said:

It means the builder isn't finished, and doesn't want to commit to a date. But they do want you to exchange so they know the sale is safe. Personally I'd offer to exchange provided they also agree to a completion date.

The house isn't that far off from being finished. The won't give us a completion date. We've thought all along they've been stalling. Our solicitor is saying we basically have to wait until the current owners complete on their new build and the title gets transferred into the developer name and then we exchange... because they aren't offering any other acceptable terms.

mage_afereld

user1977 said:

Why does your solicitor think the contract needs to be run past your lender? That doesn't sound normal. The lender isn't a party to the contract.

Are there actually any title issues? Part-exchanges are pretty commonplace and I wonder if the problem is your solicitor being unfamiliar with the process, rather than the developer doing things oddly.

This is also what is concerning us. But we have no way of knowing. We thought it would all be rather straight forward. The solicitor's issue is that the title is in the current owner's name and we would be entering a contract with a party that doesn't legally own the home, and not giving a timeline on when the title will change over.

sheramber

Your  problem is you are purchasing from the developer, who  doenl't own the house. 

The  current occupier owns it until they part exchange it.

mage_afereld

sheramber said:

Your  problem is you are purchasing from the developer, who  doenl't own the house. 

The  current occupier owns it until they part exchange it.

Yes, this is the issue. But these must be quite common-place. 

Woodstok2000

I'm not sure it's so common to be trying to buy the house from the developer this early in the process.  As others have said, you're trying to purchase it from someone who doesn't own it - your solicitors are looking out for your best interests here.

1) Is there a way to avoid the part exchange and buy direct from the homeowners?  I'm sure the developer doesn't want the hassle of dealing with the sale anyway.....

2) If they can't give you a firm completion date, can you speak to the developer and see what assurances they would need to avoid marketing the property until a completion date can be confirmed?  Maybe you could pay a small deposit to 'hold' the house until it's time to sign.  Again, they just want the house sold, so they should be flexible if it's going to avoid additional costs for them.

twopenny

Sounds like the developer is trying to pressure you knowing that you want the house and you are inexperienced.

They shouldn't be contacting you with 'threats' like that and a rush for completion. They should be going through their solicitor/legal team and yours.

Completion should be a joint agreement.

You are being pushed. Stand your ground. Have the legalities in place. You want to be sure you can move in securely and not find yourself there and something unexpected crops up.

If it does go back on the market then the current occupiers won't be too pleased and worried too. Who knows, you may get it cheaper if it's winter but unlikely because you've already made an offer. Worth a try though. At least it should be easier.