Buying house that is being Part-exchanged

Woodstok2000

twopenny said:

If it does go back on the market then the current occupiers won't be too pleased and worried too. 

The current occupiers won't care - they are part-exchanging the house so they've already sold it to the developer in effect, although that sale only becomes effective when they complete on the new house.

silvercar

Woodstok2000 said:

twopenny said:

If it does go back on the market then the current occupiers won't be too pleased and worried too. 

The current occupiers won't care - they are part-exchanging the house so they've already sold it to the developer in effect, although that sale only becomes effective when they complete on the new house.

They may have been offered a sweetener if their property is sold before their new one completes.

vic_sf49

silvercar said:

Woodstok2000 said:

twopenny said:

If it does go back on the market then the current occupiers won't be too pleased and worried too. 

The current occupiers won't care - they are part-exchanging the house so they've already sold it to the developer in effect, although that sale only becomes effective when they complete on the new house.

They may have been offered a sweetener if their property is sold before their new one completes.

If you mean "sold" as in, exchanged and completed on current house, before the sale on their new build completes, they would be homeless.  

They could buy the new build, and part ex to the developer, without the rest of the chain being ready, but it's dependant on the new build being ready first.

And soz, as this ^^ derails the thread a bit.

And as for the exchange company* muppets ... "thank you for the pressure tactics, but we will exchange when our solicitor is satisfied with everything, and gives us the go ahead".

And your solicitor needs to understand long stop dates, and realise it's a part ex. They do seem a bit green.

*There was one involved with the house, my cousin was buying, a few years back. Cousin + wife had just had an offer agreed on this place, when one of these "we hurry up the chain" companies phoned them... "so shall we set completion for xxx date then, then people can book removals"...

Wife of cousin got handed the phone, who shouted at them for a while, with her conveyancing solicitor hat on. Company crawled back under their rock, and kept quiet after that.

Idiots. Like you can set a completion date, when nothing has been done. And I mean they wanted them to set it, not just give a general "as soon as we're ready" answer.

Albermarle

But today the exchange company contacted my husband

To add to previous comments, it is not normal for a vendors conveyancer to contact buyers directly.

user1977

Albermarle said:

But today the exchange company contacted my husband

To add to previous comments, it is not normal for a vendors conveyancer to contact buyers directly.

I think this is referring to the vendor (or the agent which deals with this on behalf of the developer), rather than a conveyancer.

EssexHebridean

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.

I suspect it is because the agreement will almost certainly include a long-stop completion date. Lenders tend to prefer fixed dates, and if the likely date might take the OP past the point where their offer expires, the lender will be concerned on that basis. 

I agree with those suggesting you politely refer the "exchange company" back to your solicitor - they are the ones who know whether exchange is feasible at this point, you are not. 

user1977

EssexHebridean said:

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.

if the likely date might take the OP past the point where their offer expires, the lender will be concerned on that basis. 

It's the borrower who needs to be concerned rather than the lender! There isn't a risk to the lender, they can simply walk away if the transaction is out of time.

Obviously the borrower needs to be comfortable that there's a longstop date fitting in with their mortgage offer.

EssexHebridean

Lenders do get twitchy about all sorts of things that you wouldn't expect though, and some do seem to "micro-manage" transactions a bit more than you might prefer. That said, it's far from unusual for a lender to want to be certain that the completion date  will be while the offer is still in date (or that they are happy to agree a definite extension). 

saajan_12

mage_afereld said:

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. 

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. 

..
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. 

I don't really see an issue. You can't force them to sell you the house now or after exchange. 
*  If you exchange then most likely sooner or later they will complete, although timelines can be long.
*  If you exchange and they don't end up being able to complete, then they'd owe you your costs. 
*  If you don't exchange, they are unlikely to accommodate a fixed completion date because the house won't be vacant until the new build is ready. So they might just wait, or they might look for another buyer. 

So the key is just how long the long stop date is - you don't want to be tied in for months / years. If reasonable and if you have your heart set on it, I'd go ahead. 

mage_afereld said:
Our solicitors ... and are also telling us that our lender is unlikely to agree. 

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.
e?

This isn't usually any of the lender's concern as they aren't party to exchange. If you exchange and the seller can't complete, the lender would just not pay out the money (or your solicitor would have to return it if it was sent ahead of time). 
Have you asked the solicitor what they think is the issue with the lender? 

sheramber

The owners of the house may not go ahead with part exchange. They could have a change of circumstances, be made redundant , no longer on a position to buy. 

The developer  might go bust. Several have over recent years. 

I thought Part exchange is usually a last resort in case the seller does not get a buyer. 

The OP should be buying from the house owners, not the developer.