Longstop completion - pro's and con's please!

[cazzabazza]

Advice needed please!

We accepted a very good offer on our London flat 2 months ago when the market was booming. We haven't yet found a new property to buy, and until now our buyers have been happy to wait. Had a chat with our estate agent who said they're likely to be getting a bit restless and wouldn't be surprised if they've started looking elsewhere.

Our agent told us the market is cooling and they're no longer getting offers over asking price, there is a lot more good quality stock around and there are fewer buyers than in recent months.

He's advised us to consider a longstop completion. This is where we exchange contracts now, agree a completion date in the future, something like 3 months' time, and just hope that we find something in the meanwhile.

If our buyers pull out, we would be unlikely to get the same offer again, and wouldn't be able to sell as fast as before.

I can see that it could work in our favour in that we'd lock in a good price for our flat, and that having exchanged contracts would put us in a much more favourable position to have an offer accepted on a property we like.

But I'm just worried about what would happen if we didn't find anywhere in that time scale, or if we were not able to complete on the same day we've agreed with our buyers!

Any advice would be most welcome!

If you didn't find anywhere in that timescale, or couldn't arrange the completions to tie in, would you be prepared to move into rental? Is the price they are paying worth that? If not, there is your answer!

NB 3 months is not very long - conveyancing is likely to take at least 2, so that only gives you 1 month to find a place to buy. Then you will need to hope that they have no delays in the chain above them, etc etc. It's pretty unlikely that you will be able to tie the sale and purchase to the same date if you do this, so its all down to how much you want the sale, and how easy it is for you to rent/bedhop for a while.

Don't lose sight of the fact that the estate agent is driven by his commission. He wants the certainty of that. He doesn't care if you end up renting for a year and the market goes stratospheric in that time. So you'll need to be really sure that this works for you not the agent.

Could you sell it straightaway and move into rented? That would seem a lot more straightforward to me.

Agree with Ithink as well - the EA has his own interests at heart here - have you done any research yourself? It's pretty easy to see what's going on with the London property market by watching Rightmove etc.

I'm also curious as to why you're finding it hard to find a place. Are there good reasons or do you think your expectations are realistic? I'd be getting restless if I were your buyer too if I am honest.

After 2 months you should offer either rented or longstop. If you choose longstop and aren't going to be ready in 3 months then you move into rented anyway.

We accepted an offer 4 weeks ago and its looking like rented for us. I wouldn't expect to given more than 4 weeks grace to be honest. On the plus side it will put us in a better, no chain position when the right house does come up.

Which part of London are you in? I'm reading all sorts in the press but in my area of SE London it's still sealed bids on good properties...

Thanks, I just keep hearing such mixed things about the market if our buyers pulled out and we had to re-sell. I guess no one really knows just at the moment. We're in NW2 and apparently EA's are finding the open day/sealed bids thing isn't really working any more around here. Hopefully prices will just stabilise rather than start to drop, in which case we'll be ok.

My concern with a long stop completion and going into rented accommodation is that I think it'll be pretty difficult to a find short term flexible let for a family of four that's not ridiculously expensive. We don't want to get tied in to a 6 month or longer contract as it will make it difficult when we do find a property and are ready to complete.

I think our expectations are realistic in terms of what we're looking for as we've seen several properties worth making an offer on but not got them for whatever reason. We don't want to rush and potentially make a mistake in terms of location as this will hopefully be our long term family home (and we can't afford to move again soon!). It's taken time to research different areas in terms of value for money, commuting times, and good schools, etc. but I think we now know exactly what we want. Just hoping we get something soon, so stressful but it's comforting to know so many others going through the same process!

Have 2 friends that have done this. I agree that the market is uncertain but you also have to factor in the practicalities. If the offer that you have accepted is very good, isn't it more than likely that the difference between the offer, and what you might get if the market cools, is more than the rent you'd lose even if you had to sign up for a 6 month rental but only used it for say 3 months?

Both sets of friends hadn't found anything by the time the long stop date came - one set moved back in with parents temporarily, one set got a holiday cottage for 3 weeks until their purchase completed. Both were happy that they'd sold regardless of the time scales not lining up exactly.

We were in a position once where we had an offer accepted but the buyers couldn't find what they were looking for. We pulled out, there was no end in sight and we were desperate to move.

We are currently in rented between moves. It was an easier decision as we've relocated but I'm so glad we've done it. We lost our first buyers as they couldn't get their mortgage and had to remarket. It has really taken the pressure off not being in a chain. There have also been a few issues with our purchase and the stress has been much less knowing we will not be stuck.