Was "Extended period between exchange and completion..." (now finally exchanged!)

chachi

To make a loooooong stressful story short, we are to exchange contracts on the sale of our house this coming Monday morning, having had it on the market since last fall and five weeks since agreeing to the buyer's offer.

The sale and buyers were always portrayed to us as being a chain-free arrangement, but Thursday morning we were notified that "due to the buyer's underlying sale collapsing, there was a slight problem with the sale" :mad:

The buyers and their solicitors have stated they still want to exchange on Monday, but are now wanting to delay completion until early August so as to allow them sufficient time to let out their existing property and/or to rearrange their finances. They investigated taking out a bridging loan and/or other methods to allow them to complete by end of this month as originally planned but decided the costs involved were too high for them to accept, so are effectively pushing those costs onto us now by delaying completion for so long.

We are not stupid and wholly recognise that we are better off paying the mortgage during May/June/July and completing in August than telling them to !!!!!! off and attempt to sell the house to someone else, both in 'final selling price' terms and in the likelihood or lack thereof of finding another buyer by then.

Obviously, this now puts us in a position of paying 3-4 mos interest on the mortgage during the interim period, which will be a bit of a strain on our finances as we have partially relocated and are paying rent on a flat in addition to servicing the mortgage debt.

It is suggested that we arrange an overdraft or secured facility to mitigate the financial constraints during the summer period, but are somewhat concerned about falling into a trap of creating a debt which will not get cleared as expected in 4 mos time.

What if anything could cause the sale to collapse and therefore trigger them being legally due the return of their 10% deposit excepting "us changing our minds and deciding not to sell to them" (which won't happen) ?

merlinthehappypig

chachi wrote: »

What if anything could cause the sale to collapse and therefore trigger them being legally due the return of their 10% deposit excepting "us changing our minds and deciding not to sell to them" (which won't happen) ?

Nothing, except the death of one or more of the other party, as far as I am aware.

Once they exchange contracts they are legally bound to complete on the date agreed and, if they don't, you get to keep the 10%. I doubt that, in practice, it's as simple as that, but that's the principle.

If one of them dies in the meantime the contract is null and void. That's what we were told when faced with a similar situation some weeks back.

My parents in law sold their house and had an extended period between exchange and completion on the request of the buyers who were waiting for the cash from the sale of a house in Spain. It didn't cause them any problems, but they didn't have a mortgage to pay in the meantime.

chachi

That's pretty much what I thought but my head's a shed at the moment from the "surprise news" ...

Going to have a sitdown with the buyers directly tomorrow upon my return (was already booked to fly back to London today for a brief holiday) and get a touchy-feely impression and hear it all from their mouths before nodding my head for Monday exchange.

Am I unreasonable to suggest they pay me £4k cash upfront (less than 1% of price) to cover my costs of acting as their bridge? That's what an old friend whose played the property game many times has just hammered into me over the phone ...

chickmug

chachi wrote: »

That's pretty much what I thought but my head's a shed at the moment from the "surprise news" ...

Going to have a sitdown with the buyers directly tomorrow upon my return (was already booked to fly back to London today for a brief holiday) and get a touchy-feely impression and hear it all from their mouths before nodding my head for Monday exchange.

Am I unreasonable to suggest they pay me £4k cash upfront (less than 1% of price) to cover my costs of acting as their bridge? That's what an old friend whose played the property game many times has just hammered into me over the phone ...

I happens all the time where buyers say they have no downward chain, or any other reasons to impede progress and they have. In the same way as your buyer is introducing last minute variations, to what he agreed, there is no reason why you can't with the £4 but it a case of going very carefully so as not to blow it.

chachi

Agreed ... have to be on tenterhooks when I / if I decide to raise the point.

We had originally agreed a price reduction as "the buyers wanted to complete within 6 wks" which has obviously now gone out the proverbial window and they obviously know the costings they were quoted for arranging their own bridging facility which I think would be at least double what I'd be requesting given my notional mortgage amount versus theirs.

Pretty much chewed my fingernails off the past 48 hrs :doh:

chickmug

As I have said for many years buying and selling house is like a game of poker. Get the valium out!!!!!!!!!

silvercar

If prices drop before August you will be quids in!

You could ask them for extra money, but if they have had to delay completion to sort out their finances, I doubt they have £££ to spare.

chachi

silvercar wrote: »

If prices drop before August you will be quids in!

Erm, how so necessarily? If there is an HPC between now and then and prices submarine severely (which I doubt will happen) one could argue they would have to consider walking away & throwing away the 10% deposit so as not to effectively buy into another immediate additional 5-10% loss ... the old adage about "not throwing good money after bad" could apply depending upon the maths.

silvercar wrote: »

You could ask them for extra money, but if they have had to delay completion to sort out their finances, I doubt they have £££ to spare.

I'm not wholly convinced that the short-term cashflow was the issue hence the request to meet with them face-to-face.

Perhaps I'm overanalysing the whole thing now, but them taking out a bridge facility means that they wear a 6-8% additional cost by floating the whole thing now without downward chain in place in addition to unlimited downside on the value, whereas this costs them nothing extra and caps their exposure at 10% loss + fees for three months free ride, or am I being paranoid?

chachi

update: nearly three weeks on but today they finally signed & exchanged contracts with us without a gazundering attempt.
:beer:

For those keeping score (and for the idiots suggesting people should make 30-40% under asking price offers and expect to be taken seriously) ours sold for a bit over 5% off asking price and/or roughly 10% off of last summer's peak realised sale price in our street.

JoJoArmani

nice update!

Hope you enjoy your new home in Cyprus!

chachi

Thanks, been here since October actually when I took the plunge as it were ...

Gotten very accustomed to good weather, excellent quality food, reasonably priced ciggies/petrol/etc, friendly people, cleaner streets/sidewalks, and an overall better quality of life :T

The whole water shortage situation is a bit of a PITA at times but it was easily foreseen when I moved so no real surprise there, and there aren't any cuts in the district I live in so not really impacting me directly just friends/etc I know.

For the time being, have a 3 bed/3 bath/3 balcony flat with a view of the sea to the south and the mountains/hills to the north, approx 160 m² or so, for €500 a month
:beer: