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Seller wants to exchange with an open ended completion

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Bengangooly
Bengangooly Posts: 5 Forumite
in House buying, renting & selling
Hi, we put an offer in on a home - we knew it had an offer below asking price so we offered asking price. Our house has been valued and is in the process of going on the market. The seller is happy to take our offer but as our house is not on market yet he has asked to exchange as normal with an open ended completion. That means that we would have to pay 10% on exchange - according to the agent, exchanging takes around 55 days. Apparently the seller has some debts to repay which is why he wants to do it this way.
We can probably raise the 10% without having sold our house.
The worry is if we don’t sell then he will have our cash - however, several properties have sold on our street for our asking price, so I don’t think that’s much worry.
Has anyone done this before? How normal is it? Also, when would stamp duty be due, as I don’t think we could raise that without selling our house first?
Sorry for the long post - grateful for any help.

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  • kinger101
    kinger101 Posts: 6,284 Forumite
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    No. Just no. Find somewhere else (once you have a buyer for yours).
    "Real knowledge is to know the extent of one's ignorance" - Confucius
  • G_M
    G_M Posts: 51,977 Forumite
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    There is only one answer to this


    :rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:
  • Robstar123
    Robstar123 Posts: 5 Forumite
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    I am a Sales Progressor for an estate agent and if you were my client I would STRONGLY advise against this for both of you. Even if the vendor wants to exchange the deposit gets held in their solicitors account after exchange has taken place, they do not get it straight away. If then you fail to complete your solicitor will get put on !!!8216;notice!!!8217; which is around 14 days (not the same for every firm) only after that time will they get the deposit, also, most solicitors will not exchange until they have an agreeable completion date between all parties in the chain. Advice would be to find a buyer and do it properly. If your seller wants to move quicker then it is down to their agent to present them with an offer from someone in a proceedable position
  • hazyjo
    hazyjo Posts: 15,470 Forumite
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    Absolutely no way. I can't see any solicitor wanting to get involved with this either. Has disaster written all over it!

    Run for the hills and don't look back. Seriously.
    2023 wins: *must start comping again!*
  • SG27
    SG27 Posts: 2,773 Forumite
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    As everyone else says 100% no. There are so many things to go wrong and you could end up losing your deposit and more!

    And it will not help the vendor anyway they don't get any money until completion.
  • saajan_12
    saajan_12 Posts: 3,624 Forumite
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    Bengangooly wrote: »
    Hi, we put an offer in on a home - we knew it had an offer below asking price so we offered asking price. Our house has been valued and is in the process of going on the market. - you're not a proceedable buyer yet - usually you need to be on the market and have an offer accepted on your sale, before offering to purchase. The seller is happy to take our offer but as our house is not on market yet he has asked to exchange as normal with an open ended completion. - are you even ready to commit to the purchase? Survey done? Searches done? Mortgage offer?
    Also what does open ended completion mean - can you complete in 2 months? 2 years? 20 years?     That means that we would have to pay 10% on exchange - according to the agent, exchanging takes around 55 days. Apparently the seller has some debts to repay which is why he wants to do it this way. - The exchange deposit is retained by his solicitor (or passed up the chain between solicitors)
    not transferred to the vendor. That way if the vendor fails to complete,
    the solicitor has the funds to return to you. Vendor can't just use it before completion.
    We can probably raise the 10% without having sold our house.
    The worry is if we don!!!8217;t sell then he will have our cash - however, several properties have sold on our street for our asking price, so I don!!!8217;t think that!!!8217;s much worry.- Your property may sell and be ready/able to complete on your purchase, but what if the vendor fails to deliver possession to you? As its open ended, he doesn't have to complete on a certain day, and he's used your deposit for loans.
    Has anyone done this before? How normal is it? Also, when would stamp duty be due, as I don!!!8217;t think we could raise that without selling our house first?- Stamp Duty must be paid to HMRC within 30 days of completion, but if you have a mortgage (and often even if not) your solicitor will insist they have the funds before completion. It doesn't need to be by exchange though, so if your completion dates are tied together, stamp duty can come out of sale proceeds.
    Sorry for the long post - grateful for any help.

    Don't do 'open ended completion' - there has to be an backstop date else its meaningless. Also don't exchange on your purchase until all searches/surveys/mortgage offers are in place, and you should exchange on both at the same time. Otherwise you could be tied into a purchase without being able to fund it. Other properties on your street selling isn't enough assurance that yours WILL sell at the same time as your purchase.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    Bengangooly wrote: »
    Hi, we put an offer in on a home - we knew it had an offer below asking price so we offered asking price. Our house has been valued and is in the process of going on the market. The seller is happy to take our offer

    Thats because he is clueless
    but as our house is not on market yet he has asked to exchange as normal with an open ended completion.

    If you accepted, you would be clueless
    That means that we would have to pay 10% on exchange - according to the agent, exchanging takes around 55 days. Apparently the seller has some debts to repay which is why he wants to do it this way.
    Thats bonkers. he doesnt get access to that money. So he is clueless.

    We can probably raise the 10% without having sold our house.
    The worry is if we don’t sell then he will have our cash - however, several properties have sold on our street for our asking price, so I don’t think that’s much worry.
    yeh right ..... and Plan B is what ?


    Has anyone done this before?

    Hopefully not
    How normal is it?
    Its abnormal and stupid.
    Also, when would stamp duty be due, as I don’t think we could raise that without selling our house first?


    Irrelevant you wont get that far.

    Get a proceedable offer on your house before you continue.
  • jennhg88
    jennhg88 Posts: 253 Forumite
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    Run. Away.
  • Smodlet
    Smodlet Posts: 6,976 Forumite
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    Only thing I can add, spend a goodly amount of time reading this board. It really is time Davesnave, Dr Dafty, G_M and whoever else should be on the Examination Board set a paper which FTBs could sit before they are allowed to buy a property... Wonder how I would do? :o:D:rotfl: Not that I'm a FTB.
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