HELP-advice about pulling out after exchange

chickmug

markwelshwizard wrote: »

I think chickmug means that the developer may say "if you don't complete, we will sue you for £XXXX". We were wondering if anyone had an idea what £XXXX might be;

• A) 10% of the agreed house price

• Any losses made when house is sold to someone else + interest built up over that time.
• C) Cost of fixtures+fittings we picked
• D) All of the above

How many people think that the developer would be compassionate to our problem in "the current climate"?

Are we right in thinking that we are liable if the mortgage co. withdraws their offer due to illness.

My comments were made based on experience in a better selling market. My company were held in very high regard by all especially the customers so the man at the top bent over backwards to keep this reputation. But we were not prepared to let people pull out, if they had exchanged, unless there was a really good reason. Would you, or others selling a house, on this forum, let someone pull out of buying your/their house if they asked.

No idea what could be asked for in compensation if they let you pull out.

Your solicitor would not of let you exchange unless he was 100% certain the money would be in place for the proposed completion date.

The problem is that the contract is a legal document, which you have signed to say you will execute all the actions specified on the completion date. In other words pay up but I have never dealt with any case in 30 + years where a party did not complete.

poppysarah

chickmug wrote: »

Your solicitor would not of let you exchange unless he was 100% certain the money would be in place for the proposed completion date.
.

Unless of course you have a solicitor not acting in your best interests. IE: one picked by the developer.

silvercar

The mortgage offer is there, the question from the OP is whether they would be better not taking the mortgage and facing the consequences of not buying the property or fufilling the contract and then worrying they can't afford the mortgage and won't be able to sell the property on quickly.

chickmug

poppysarah wrote: »

Unless of course you have a solicitor not acting in your best interests. IE: one picked by the developer.

I though that went out a long time ago. In my early days (35 years ago) I recall Wimpy's conditions being the only way you were allowed to reserve a plot is if you used all contacts they specified.

I regularly come across buyers and sellers giving the same solicitor details. I am not up on the 100% position but find that if each person has been using the firm for a period of time that firm may feel able to handle matters, for both parties, but only if it is with separate partners. However some firms would refuse under any cicumstances to act for both parties.

I regularly speak to solicitors and they tell me of the increasing rules to which they work and with which they worry should they fall foul. So even though a solicitor may of been put forward by the developer I would be amazed if they dared suggest anything against your best interests. However perhaps where I work may not be the same in all the UK!!!!!!!!!!!!!!!

poppysarah

There've been a couple of stories this weekend posted on here about people having major problems with new build/developer solicitors. Things like being encouraged to sign for your new property without having sold your old one - something that should go on in a chain process so that if one thing breaks you're not stuck holding two mortgages.

Trollfever

I do not think that any independent solicitor would allow their clients to exchange contracts for the purchase of a property unless contracts had been exchanged for the sale of their property.

Community Legal Advice:

http://www.clsdirect.org.uk/

MarkyMarkD

I'm assuming that the OP is a FTB hence rendering Trollfever's comment irrelevant, but I may be wrong.

In terms of damages, the amount would be B+C using the terminology in the earlier post, i.e. the total losses incurred by the developer. The 10% deposit is a red herring as it's not representative of anything in particular.

I don't think that the fact that, if you disclosed the change in circumstances to the lender, that would make them withdraw the mortgage offer is particularly relevant either. At the end of the day, you signed a contract and exchanged contracts. It's legally your responsibility to go through with the deal. All you can do is throw yourself on the mercy of the developer.

Trollfever

Having re read the OP, apologies for the confusion.

markwelshwizard

Thanks for all your feedback folks, really helps us sort our ideas out. :T

Here's the beef;

We are FTB and the house should be a lovely family home for us, for the next 5-10 years, after having a pretty bad time renting for 3 years.

If we bought the house today we could get maybe 5-8k off the price we agreed in Feb, but we certainly would not have got a mortgage (we had a bit of trouble in Feb)

We have 18-20 months left of a good mortgage deal before we have to worry about the value of the home (remortgage-to get another deal, if they still exist...)

I think we will have some negative equity when our deal is up, especially due to the HLC, but we can afford the standard interest rate if we can't re-morgage.

It seems clear that breaking our contract is not a viable option unless the dev agrees, which they won't. Also seems like getting sued for breach of contract may cost us more than getting reposessed if things got really bad:eek:.

The contract could have holes in it, the solicitors are quite slap-dash, but a contract lawyer would cost us money (100's?) and stress.

My wife may be able to find a new job, but the stress of knowing she has to keep this one to pay the mortgage doesn't help.

We are not looking to make money on the house instantly, but it would be nice if we could sell it in 10 years time, but who knows what things will be like then...

I think we should just try and enjoy our new family home and stop watching the news/reading price crash threads.:rotfl:

chickmug

markwelshwizard wrote: »

I think we should just try and enjoy our new family home and stop watching the news/reading price crash threads.:rotfl:

Good point as reading this forum can be interesting but I feel it is not entirely representative of the types of people with who I deal from day to day in EA. Not a critiscism but a comment.

Good luck to you!