In a chain: DO all parties Exchange ON THE SAME DAY?(13 Posts)
Am seriously confused now.
We are about to draw a line in the sand for exchange with our vendors as they are pratting us about. We know why: the top of the chain (to which bear in mind they're effectively committing US!) is becoming protracted (something about surveys taking more time to arrange in Cornwall??).
We are buying off Party B. They've had an offer accepted on Party C's house. Party C have had an offer accepted on D in Cornwall which is an end of chain.
The vendor's EA tells us today (6 weeks after acceptance) that all parties in a chain conventionally exchange on the same day.
Well, surely Party B NEED a guarantee of our money via exchange in order to pay Party C who can then pay Party D?
Surely WE need to exchange 1st?
Everyone exchanges on the same day, but in order going up the chain
I am no expert, but I guess it depends on how each house is being funded. I.e. what is personal funds and what is mortgage etc.
(But I could be talking through a hole in the head).
I don't think that's really necessary. It's usual to complete on the same day so you all move up the chain, but not really necessary to exchange on the same day. The only reason for doing so really is if other people further up the chain feel nervous about exchanging with those further down, without having exchanged with those up the chain. They are left a bit vulnerable if their sale falls through ie they've exchanged with you but their sale falls through, they're effectively bound to sell their home without having somewhere to go to.
We have been in exactly that position. We exchanged with the person buying our flat, before we exchanged on our next purchase. That purchase fell through, but we went ahead with the sale of our old flat, put all our stuff in storage and are living at my mum and dad's temporarily while we wait for our next purchase to go through.
OK. I can see the point you're making but surely it'd better to be cashed up and 'homeless' rather than having to pay out for another house before you've been paid for/sold your own? Isn't that bridging loan territory?
If there's a chain, there CAN only be one or other of those scenarios, surely, other than to exchange all on the same day (ie the entire chain) AND complete all on the same later day. What are the chances of THAT happening? DOES it?
IF so why did our vendors agree to a maximum completion date with us if they won't exchange?
The exchange hold up may not all be entirely down to your vendors. Often people agree to anything to get a sale.
I have only moved twice in England (I am Scottish), first time we were moving from rented and our seller was moving to a house where someone had died, so there was only 2 of us in the chain. Our latest house is a new build, so only us and the builder.
I think this is why chains can be a complete nightmare. I would imagine your vendors said they were prepared to sell and rent, but actually hoped to find something to buy in time to avoid that scenario. having done that, they probaby now want to avoid the hassle of moving twice, hence you're now stuck in a chain. You can call their bluff of course and set a deadline.
Well, fimbo, our vendors OFFERED the rental option as a failsafe! Whilst I think our solicitor is a tosser I now know our vendors are stalling!
Incidentally, our solicitor acting for us, the people at the bottom of the chain, he's also acting for the people (Party D, above) at the top of the chain! He doesn't know we know that.
I guess so! I guess he wouldn't be ethically allowed to act for both parties as in us buying, them selling but he IS one stage removed, by coincidence. We're buying using him, our vendor's sellers are using him for both buying and selling.
Exchange normally occurs on the same day so everyone at least has the reassurance of a commitment to move on a particular date. At this stage the money is really a paper transaction only, no funds actually move to the next party the solictor just has them available to transfer. The completion dates don't have to match though if someone can, say, stay with relatives and use storage to cover the interim period or has alternative funds to complete a purchase earlier than their sale. However if the funds are required upwards then it is normal to complete in order of the chain ie. you first, so vendor can use that money etc. A 4 stage chain isn't that long and should fall into place once the paperwork is done. Ask your solictor what to confirm what date the other parties are aiming for or the ea.
This is what I think happens
Party D's sol gives a "release" to Party C's sol; basically an undertaking over the phone they can commit to exchange and will do so if Party C comes back before a specific time.
Party C sol then speaks to Party B sol & gives them a release and it goes down the chain.
When Party B has a release from Party C, they can commit to exchange with you.
Exchange with you happens.
Party B then goes back to Party C within the alloted time & confirms the exchange. This then goes up the chain until all parties have exchanged.
I may have got it the wrong way round, and it may start at the bottom of the chain with the "releases" go up, and then come back down again. Can't think which makes more sense! I have done it a long time ago as a trainee solicitor.
Exchange involves series of undertakings given over the phone between solicitors, each gives a time to come back to each other, each time given would usually be 10 mins before the last time given, so the phone calls all happen on the same day and everyone does exchange up and down the chain on that day. And yes, you would all be completing i.e. moving on the same day as well. That's why chains are a nightmare!
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