Advice - what happens if we cant exchange on new build?

pootle30

I really meant the title to be - what do you think will happen?We reserved a new build house in March which is due to be ready in August - of course we thought this would give us plenty of time to sell our house - but then the market came to a standstill. Since then the builder seems to be struggling to sell as well as only two other properties have been reserved since our over 3 months ago. The missives had to be concluded within two weeks and just wondered what anyone's views on the following are (ie do you think they are really likely to follow through with it if there is delay given we might be the only option they have to sell the plot right now?!)The missives say if we dont exchange by 3pm on the date of entry then interest will accrue at the rate of 10% per annum above base lending rate until full payment is made. Then it says that 14 days later they can place it back on the market.We do have a buyer in the pipeline but we're waiting on them selling their property so while we still hope to sell it might not be as quickly as we "need" to re any exchange date given to us by the builders.Any views would be welcome - especially if you have experienced anything like this in the current climate????? (i'm sure I cant be the only one!)

Doozergirl

I don't really understand the Scottish system but I am sure I have read on this boards that missives are not truly binding in the way that exchange is and that you can get out of them if needs be even though the strong suggestion is that you can't. Perhaps it does incur a hefty penalty though.

I don't know if that poster knew their stuff so perhaps I'm waffling and shouldn't have posted! (I am, worryingly perhaps, sober)

pootle30

thanks doozergirl, you are right, we can get out of the missives but i suppose what i'm saying is we do still want the house and trying to judge whether this is something that a builder can really afford to do given there's not a lot of buyers queueing up to take things off their hands. say for example the exchange could be delayed by us for another 6 weeks wouldnt it be in there best interests to just wait the 6 weeks as at least then someone will be paying them for the house. We would pull out if we really thought the interest would be charged and then they have no potential buyer. We will of course speak to our solicitor if it comes to it.

Doozergirl

I guess the developer will weigh up the options. It's better to delay and get their price rather than fight for interest etc and still end up with a lower price. They will, no doubt, do whatever suits them best. If it's a bad marketplace, they might just compromise with you.

pipsroadster

I thought for i moment i had typed the first post

We reserved back in October and have one note of interest also, other than that no sign of movement.

Breaching missives can result in huge financial penalities, try and negotiate with the developer, as you say, they will be struggling too.

Who is the developer?

pootle30

Its Miller Homes.

SquatNow

If you can legally get out of the missives without suicidal penalties then do so.

Realistically you have to accept that you are not going to sell your house in time.