Delayed completion

ElvisPresleysCat · 27 September 2016 at 3:51PM

Hi,

Due to personal circumstances, I'm considering selling my property under the rather different 'delayed completion' option.

As far as I understand, everything goes ahead as in a normal sale except the completion which is set for a future time as agreed by both parties.

Can anyone offer any advice? Ideally pros and cons etc.?

Thanks!
Adam.

HouseBuyer77 · 27 September 2016 at 4:16PM

As in a longer gap than usual between exchange and completion but otherwise a perfectly normal sale?

Is there an onward purchase involved?

If no onward purchase there isn't too much risk to you. The problem with a long gap between exchange and completion is there's more times
for things to happen which prevent completion. For example your buyer may get their mortgage offer pulled for some reason and be unable to complete. That's a major problem for them (you can keep their deposit) but less so for you, unless you are dependent upon that money turning up (e.g. for your own onward house purchase).

There's also the risk major damage could occur to the house between exchange and completion or even total loss (house burns down) leaving you unable to complete. But that's why you have insurance.

eddddy · 27 September 2016 at 5:02PM

The main challenge might be finding a buyer ho agrees to this.

If they're an FTB, it might be easier. But if they have a property to sell, the whole chain beneath them will have to agree to your timescales.

danslenoir · 27 September 2016 at 5:38PM

eddddy wrote: »

The main challenge might be finding a buyer ho agrees to this.

If they're an FTB, it might be easier. But if they have a property to sell, the whole chain beneath them will have to agree to your timescales.

This.

I'd imagine that delayed completion would be a deal-breaker for most people.

I guess the kind of people who potentially would be interested to buy on this basis would be people looking at your property as an investment rather than a place to live in themselves. But then it would have to be attractively priced as investors are typically willing to pay less than people buying a home.

If you don't mind sharing, what personal circumstances have led you to consider this option your only one? I suspect it is going to have a substantial impact on your ability to sell and the price you are able to achieve.

G_M · 27 September 2016 at 9:06PM

The gap between Exchange and Completion can be anything the parties agree, from same day to........ 10 years or more.

Whilst 2 - 4 weeks is normal, longer time periods are common.

So the question is, what do you mean by 'delayed'? 2 months? 6? A year? More?

Obviously the longer this period, the harder to find a buyer who will agree.

Many buyers rely on mortgages, and banks give a time-limit on their offers. If Completion does not take place within the time limit, the buyer has to re-apply, with all the risk of rejection.

ElvisPresleysCat · 27 September 2016 at 10:56PM

Thanks for all the replies. By delayed, I mean 10-15 years. I was approached by the buyer who specialises in these purchases. There's no onward chain either. Once the buyer takes legal ownership of the property contractually, they assume control of the insurance, ground rent, repairs etc

I believe HouseBuyer77 nailed it as there is little risk to me. From the outset, the buyer will sink capital into in for repairs so stands to lose that if there are any issues. It gets a bit complicated, but I believe I will go for it.

Thanks

Adam.

G_M · 27 September 2016 at 11:26PM

You are mad.

Good luck with that. Please let us know what happens in 15 years........

Note:

Once the buyer takes legal ownership of the property contractually,......

You realise this happens at Completion don't you?

I'd also be fascinated to know what price you are agreeing.

ElvisPresleysCat · 27 September 2016 at 11:41PM

G_M wrote: »

You are mad.

Good luck with that. Please let us know what happens in 15 years........

Note:
You realise this happens at Completion don't you?

I'd also be fascinated to know what price you are agreeing.

Why am I mad? The property is in negative equity plus there is a loan on top. The buyer is taking all of that off my hands and in return - eventually - gaining a property.

The price agreed would allow me to walk away break even - the place isn't worth what I paid for it and needs work doing.

Were I in a position to sell it at profit, I would, but I have other things going on.

A.

G_M · 28 September 2016 at 12:05AM

I get very frustrated when posters ask for advice and then drip feed information in response to replies. So can't be bothered to expand on my comments - off to expand in bed instead.

eddddy · 28 September 2016 at 6:54AM

This scheme is a million miles away from what your initial question implied.

The potential risks might be massive.

I'm guessing you 'hand over' your property to somebody between exchange and completion - and they do whatever they like with it. Probably renting it out.

So just one example risk:

You will be breaching the terms of your mortgage. The bank might call in the loan. If you cannot pay back the loan, the bank might repossess.

Your buyer might then sue you for breach of contract and you have to pay them 10 years rent plus other damages.

The list of risks could be endless. Show the contract to your solicitor.

Edit to add...

If these were good schemes, mortgage lenders would be promoting them, reputable companies would be offering them, etc. What do you knpw about the person/company you're talking to? Are they reputable, or are they a bunch of dodgy shysters? (I know what my guess is.)

mrginge · 28 September 2016 at 7:39AM

This is a scam, simple as.
This 'buyer' will disappear as soon as they have extracted as much income as they can from your property.

PLEASE READ BEFORE POSTING

Delayed completion

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