Doing work between exchange and completion(22 Posts)
We have an offer on our place, and had an offer accepted on a house. All seems to be going through. The house we want to buy is vacant, and we would like to do some work between exchange and completion - gutting of carpets and built in furniture, plus a new heating and hot water system and electrics brought up to current standard.
It would be amazing to not live there during those works.
The cost of the works is approximately 2% of the purchase price, and we are putting down 10%.
Anyone done this?
I'll follow this thread with interest. Our potential new home is a TOTAL wreck and it would be amazing to do some simple stuff eg secure the garden and knock down a couple of walls prior to moving in!!
Yes, we did it, this place was vacant and the owners agreed to use ripping up the carpets, doing extensive rewiring and restoring the solid wood floors.
If the sale had fallen through, the owners would have benefitted from significant improvements to the place.
But of course the sale went through and yes, it was great to get it all done before we moved in! We were able to get the place professionally cleaned after all the work was done, too.
Oh, and we also sorted the garden, which was totally overgrown after being vacant for 4 months.
Thanks Poppy. Where you a nervous wreck for the time between?
We did this but it was about 15+ years ago so things may be different.
In our case we were told that we could do works but if the sale fell through then we would have to return the house to its original state and reinstate things if necessary ie. if we'd ripped the kitchen out and then the sale fell through we would have had to reinstate a kitchen to at least the standard of the original one.
As it was the type of work we were doing was actually improving it (mainly clearing the garden of massively overgrown weeds and triffid-like plants!), installing a loft hatch etc
Thanks Norbert. We'd also be improving, although they could ask us to replace carpets. But to be fair, we wouldn't pull out if the purchase and if they did, we could, I understand, force a sale through specific performance of the contract? I've clearly been googling too much.
We weren't nervous because we were definitely making improvements. I found the estate agent photos of the living room a few days ago and the state of that carpet was appalling, whereas we uncovered and restored the beautiful wood floor underneath.
Are you in a chain? Could be risky if you are.
Our buyers are in rented. The house we are buying us vacant, so just three in the chain.
We did this with a vacant house and it was fine. We probably spent 25k or so before we owner the property. It was a complete wreck when we bought it and in the two weeks before completion we put in new boiler and heating, replaced water pipes, rewired and replastered. It meant that although lots was still to be done it was habitable as (for some unknown reason) we decided to live in the house while work was done.
Obviously it is a risk but you just have to weigh that up...
We wanted to do this, and the vendors agreed. Not nearly so significant, we just wanted to send someone in during the week before completion to fit a shower in the bathroom. Didn't happen though.
It was all arranged, until the vendor's solicitor got wind of what his client had agreed to and basically put a stop to it. He convinced the vendors that it was a silly thing to do because if the workmen that we employed damaged the property, we could then insist that the vendors were responsible for getting it put right as it would still be their property. Very frustrating.
Frustrating maybe, Brienne, but as a solicitor I would also advise against this from both sides. There is only a small risk of the sale falling through between exchange and completion, but it does happen. I would be more wary as a seller because of the risk of serious damage being caused.
If a decent solicitor hears of this, I would expect them to be advising both sides not to go ahead.
And, of course, it depends on the vendors agreeing to it/their solicitors saying its OK, which they may not do.
You can ask your solicitor to negotiate an Access Agreement between thee two dates although the vendor doesn't have to grant it.
I'd ad that DH and I are both solicitors and the solicitors on both sides were fine with it in the circs. We understood the risk was ours to take because we were adding value.
Personally I would use that time to take measurements and ask the vendors if builders etc could visit to offer quotes.
I say this because we have lost a property after exchange (as have a number of people I know). It is not totally uncommon in our part of London for people to relist their properties as soon as the market rises a bit if the sale is taking a while or scrap moving plans altogether for some reason.
We asked the same thing in our current house, which was a wreck, but our solicitor felt we would not be wise. I was desperate to get going (38 weeks pregnant, no kitchen when we moved in) but I'd have been gutted if it went wrong.
On the other hand, it could all be fine so it's up to you. Good luck with the new house and renovations!
Thank you all for your comments. Ruby, that is precisely my concern. We're in London and the market is moving very quickly. I want to know our legal position should the sellers pull out after exchange? We would have given the deposit, and spent circa £15k on work, so would we be able to pursue them for not completing? Whether we do the work or not, if the seller pulls out after exchange, we would need to pull out as well of our sale as I don't want to step off the ladder. Not sure where we would stand.
I think it is commmon for people to re-list houses after accepting an offer and if the sale is taking a while, but when you exchange you also set the completion date and usually for the near future, so I don't know why anyone would go to the expense of exchanging and then pull out, in order to get a better price?
I only know of one person whose buyer pulled out after excahnge and that was because his business / job went tits up and he didn't think he could afford to buy any more. And then he sought financial advice, and the deal was back on but with a delayed completion date.
My questions would be around insurance, and who pays or is responsible if the work causes a fire in the house, or one of yur workmen has an accident as a result of somethig to do with the house, for example.
Also, if you are intending to re-wire, that sounds like quite a big job - I would not agree to an extended period between exchange and completion in order to allow my buyers to do work on my house before moving - I would want the completion speeded up because otherwise I am paying the mortgage / losing out on interest for the benefit of my buyers home improvements!
I would make sure that both solicitors are fully aware of the arrangement before going ahead.
Prices in our area went up by about 30 grand while we were trying to buy our property. Two months after our buyer pulled out after exchange, it was back on the market for an extra 50 grand. I agree, Blu, it is unusual for vendors to pull out after exchange but we found it does happen.
I've just remembered that our problem with doing work pre-completion was also related to the insurance. We would have had to get buildings insurance to do our work (in case of any damage etc) but we didn't own/rent the property so every insurance company we spoke to was unwilling to insure us.
Hope you get the answers about the legalities, OP.
Thanks Ruby. My solicitor has said he wouldn't recommend it, but is wiling to ask the vendor the question. And I understood we needed buildings insurance from exchange, so that doesn't tally with your experience! Is a minefield!
Ah, well, having given you totally useless advice Fuf (), I really hope it all goes well and you're in your new home quickly.
Bloody house buying. It's a nightmare.
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