To ask buyers to cover costs of delayed house sale?

[AbuelaGetTheUmbrellas]

Would really appreciate advice on this. My husband and I sold our house STC at the end of last year. The house was up for auction. We sold it before the auction- buyers requested an extension on the exchange and completion date, which we agreed to. We exchanged a few weeks ago, and are due to complete tomorrow.

Buyers are now requesting a further 3 weeks extension on completion date as they have not secured their mortgage yet?! I think this is madness - they shouldn’t have looked at auction properties if they didn’t have the funds in place. They have risked their deposit by behaving this way. I’m not a Dick, so I’m happy to give them an extension rather than run off into the sunset with their deposit BUT I think they should cover the additional interest payments on our mortgage for the 3 week delay (it’s just under £2000). Is this a reasonable request? My husband is saying we should just absorb the cost ourselves!

I don't understand how you exchanged without them having their mortgage set up and ready to go?

I wondered the same, but it's happened now and since the solicitor's advised that they can put the buyers on notice to complete in 10 days or forfeit the deposit that's exactly what I'd do

Better ask said solicitors why they allowed to exchange to take place as well

Good grief, this thread is full of misinformation, misunderstanding and bad advice.

Discuss this with your solicitor and only your solicitor.

The Exchange of contracts formally engaged both parties to complete in the day named at exchange.

If your buyers fail to meet their contractual obligation to complete as agreed they will be liable for your reasonable costs as caused by delay, extra rental, interest, deposit for removal co, extra legal bills or whatever. And as your solicitor says, you can serve a notice to complete and ultimately if they fail to complete you will get their deposit.

That’s how it works.

Discuss your expenses with your solicitor.

As a buyer you are 'allowed' to exchange without having the money available.

The source of funds AML checks are for a different purpose.

Any lawyer would advise their client to not exchange without a mortgage offer in place (if needed). But it's just that advice.

If the client instructs you to go ahead then you do as instructed. Making sure you have warned you client of all the risks.

Also it's not for the seller:s lawyer to ask for proof of funds.

I

I would expect my lawyer as a seller to ask for confirmation that the buyer’s funds were in place. Whilst I expect it is not a legal requirement it would be highly negligent to not do so. Just wastes everyone’s time and risks the seller being stuck with extra costs.

But the seller gets to keep the 10% deposit if they have exchanged contracts and it all goes tit's up !

According to the Halifax it's a legal requirement to have a mortgage offer in place before you exchange contracts

You can ask but I expect they'll just say no.

Speaking from experience. I don't regret asking though.

So really depends on whether you want to pull the plug, keep the deposit and sell to someone else, or wait three weeks. They sound like players though.

But if you have your dream property to move to and you need the full funds for your own completion then failure to complete on your sale will break the chain and you will be liable for the deposit for the house sale above you. So you may end up losing a higher deposit plus your dream house. Keeping your deposit is only beneficial if you were selling a 2nd property for instance, where you can just relist without any issues.

What has your solicitor said to you?

@thebellagio initially solicitor and estate agent/auction house told me not to muddy the waters by asking the buyer to pay the interest on the mortgage caused by buyers delay. They advised me to take the buyers offer which was:

• a further deposit of 5% (we already had a 5% deposit received when we exchanged).
• an extension to completion date of 3 weeks, plus a further 2 week notice period (giving them a total of 5 more weeks to complete).

Their advice was based on the fact that we only had 5% deposit, (because buyers requested a 5% deposit on exchange instead of 10% when we agreed terms of sale) but the buyers were willing to give us another 5% deposit if we extended the completion date by 3 weeks. Both estate agent and solicitor said the risk of asking the buyers to cover the £2k mortgage interest was that the buyers could decide to risk the option of aiming to complete during the 2 week notice period, rather than pay the £2k, but if the sale fell through we would be left with 5% (£40k) deposit instead of 10% (£80 k).

Estate agent also told me that buyers informed him some weeks ago they had secured their mortgage. Solicitor stated buyers solicitor told them mortgage offer had only just been received. Based on mumsnet advice and the discrepancy in buyers’ story I decided to go against the advice ofestate agent and solicitor and offered 3 week extension to completion with no 2 week notice period
further 5% deposit to bring total deposit to 10%
buyer to pay the additional mortgage interest on completion (£2k)

All the time my husband, solicitor and estate agent were advising me to take the buyers initial offer which would have left me £2k out of pocket. I held firm as Mumsnet said I was not being unreasonable. The buyer accepted my offer. The solicitor confirmed additional deposit has reached their account.

Thankyou Mumsnet!

But the 5% deposit situation wasn’t mentioned on this thread until now.

Fingers crossed for you OP, but if this situation rumbles on, please post in property / DIY or Legal rather than AIBU, and give full facts and figures!

Good luck!

I'm pleased you are happy OP, but I think you are still £2k out of pocket aren't you because of the delay?

And what happens in 3 to 5 weeks time when they want another extension to completion ?

Pull the plug I say ASAP

Buyers requested a 5% deposit on exchange instead of 10% when we agreed terms of sale but the buyers were willing to give us another 5% deposit if we extended the completion date by 3 weeks

I don't know what the hell they're playing at, unless there's an inheritance coming their way (currently being probated) and they're hoping not to need a mortgage at all

However at least you've now got a 10% deposit, which should soak up some of the pain if this falls through completely

MN would probably have told you just to accept the 10% deposit as no-one knew you’d only got 5%.

Next time don’t dick around with buyers offering only 5% deposit.

You say delay is 3 weeks but what if after 3 weeks they still have not got funds secured? If solicitor has said you can legally ask for sale to complete in 10 days or keep deposit I'd do that. They should get a bridging loan in place. They won't because that would cost them a couple of thousand and they'd rather make you lose money. I'd want to complete or go to auction.

Yep, absolutely clueless.

Do this.

Should have done it as soon as the OP found out

No way should anything have happened with a mortgage being place to start with though , solicitor sounds like a clown to me

Without a mortgage !