Advice please: cost caused by seller's delay

[moniack]

Hi, I'm a first time buyer in London. BF and I had our offer accepted on a house at the beginning of Dec 2015. We were told there was no chain but the seller was very, very slow with providing legal documents (only got them by the end of Feb and still some outstanding questions). It turned out that there is not only a chain, but a very complicated one with selling two to buy one, family inheritance issues blablabla... The seller said twice that they were going to exchange but then later cancelled because their seller couldn't exchange with them that day. From what the agent told us, they missed the April 1st stamp duty deadline because of their seller's fault. They had to re-negotiate and their seller agreed to compensate for that. It seems that if we pull out now, it's going to leave them over a shit creek without a paddle. But both BF and I are really pissed off, they just assume that we are desperate and never going to change our mind so they would only exchange when it's completely safe for them, not to mention lying to us from the very beginning. We are now thinking of asking for a reduction, not a greedy one, just to cover the last two months rent, something 3k, less than 1% of the house price.

People who have sold houses before, could you be so kind to advise if it's a reasonable thing to do. We can afford to lose the house as we actually budged higher than this current house and the stamp duty thing may cool down the market a little bit now. But I don't want to create bitterness and worried they might accept and then do some damage to the house before they leave. (they seem to be quite selfish people judged from their behaviour).

Thanks again.

10- 12 weeks is usually an accepted period of time for straightforawrd no chain sales.

Anything other than that when you were told there was no chain I would be muttering to your estate agent about pulling out/ wanting a reduction. If I had messed buyers about with any of my house sales I think I would have accepted I had to stomache that.

That advice changes completely if you have exchanged.

I suggest you get everyone in the chain to agree a completion date to work towards as a longstop date. Ask, via the respective estate agents, that they check with their solicitors when it will be feasible to complete. No one will exchange unless 'completely safe' to do so because you are contractually committed when you do. A solicitor who allowed a client to exchange in such circumstances would be negligent.

It sounds as though they want to exchange but aren't as far along as they thought or communication from their solicitor isn't great.

As a FTB you only have your purchase to deal with. Anyone else in the chain has a sale and a purchase and both can take longer than anyone would like and are not very likely to be at the same stage. You feel you have very little control over either. I don't think they assume you are desperate - what they are dealing with is incredibly stressful.

If you try to chip the price now you could cause a further delay. If your vendors can't afford their purchase with a reduced sale price on their property then the chain collapses. If you have to start looking again, chances are prices have gone up and it's more expensive for you to buy four months down the line. Plus you lose the fees you've paid out and incurred to date.

It's not the best, but patience is required, especially when you are the first link in the chain. Our vendors told us they were chain free, but then they found somewhere they wanted to buy. These things happen.

I don't think it would be unreasonable if their seller has compensated them for the delay, that you in turn ask for a small reduction to cover your rent and inconvenience. No harm in trying!

Personally I wouldn't ask as it could further delay the chain. I would push for a completion date, or withdraw if I'd changed my mind about the purchase. Patience is necessary in these situations.

The "delay" has saved you a couple of mortgage payments so why are you out of pocket? Timeframe doesn't seem unreasonable if you are due to exchange/complete imminently. Just keep pushing for a final date.

I would not start messing about with lower prices and 'compensation ' unless the April 1st deadline also incurred specific expense for you and you had told them from the outset that you wanted to avoid that. House buying is long, slow, tortuous and delay- ridden as a matter of course.

If you want the house and believe that it is progressing, albeit slower than you would like, then just hang in in there.

No one will, or should, exchange until it is 'completely safe'.

The "delay" has saved you a couple of mortgage payments so why are you out of pocket?

In our housing market a mortgage is an investment as well as payment for accommodation whereas rent is simply payment for accommodation.

Taking a 25 year/300 individual monthly payments mortgage - when you make the final 300th payment you then get, in a sense, all your money back (more or less) - you own a house.

If you make 300 rental payments you get nothing back at the end.

So, each mortgage payment the OP doesn't get to make is a share of that return lost.

Each rental payment is one of her 300 payments lost, from an investment perspective, that she now has to find again.

Each mortgage payment is buying her house - each rent payment is buying a house for somebody else.

The OP's loss is kind of intangible but it is very real - but I suspect there is little hope of compensation - it's unfortunately just one of those things.

Well that's all very well but for the first few years most repayments are of interest and make no inroads to the capital.

When it comes down to it - the OP is a FTB and if she pulls out now, she'll lose money and the next place they find to buy is likely to be more expensive because of the market in London. They'll also need to apply for a new mortgage, pay for a survey, etc, etc. Is it worth it for the sake of a few weeks, however frustrating?

Plus, we don't know whether what has been communicated to the OP has come direct from the vendors or from the EA.

We're in a chain - my third house move, DP's umpteenth. Believe me it is incredibly stressful and you have little control. DP takes it all in his stride but had to have words with our solicitor at the end of last week. It has not been plain sailing.

I agree with wowfudge in that prices will probably have gone up since your offer was accepted so even though you've had to pay rent in the interim, the purchase would cost you more (actual house plus stamp duty etc) had you negotiated the sale now. Just hang tight.

You'd only be entitled to compensation if you'd already exchanged and the seller delayed completion beyond the contract date.
Other than that "each party bear their own cost".

You're not under contract yet and neither is the seller.

I do agree that the aggravation and the extra rental payments etc are a nuisance for you. However you cannot claim against anyone.

Our previous home took exactly 4 weeks and 3 days from time of offer until completion in a chain of 4.
This is very unusual but our seller had been given a repossession date by his bank and I was 36 weeks pregnant so our seller (top of chain) was highly motivated and those below us knew that I'd be less motivated to move once I'd given birth. And there were three sets of mortgages involved.

However current home was a no chain purchase. (We didn't need to sell to buy) and the vendors were executors of the estate (probate). It took 6 long months from date of offer to completion!! And this after vendor had specifically accepted our lower offer on the basis we could complete quickly!

We never did find out why it took so long but didn't mind in the end either.

So it can go either end of the scale. 12 weeks isn't horrendous.
I know that's not what you want to hear.

Comfort yourself with the fact that your new home will have gone up in value before you've even completed.

*Well that's all very well but for the first few years most repayments are of interest and make no inroads to the capital.

When it comes down to it - the OP is a FTB and if she pulls out now,....*

Who said she should pull out?

If you read what I said - it is that the OP has, and will continue to, suffer a real loss as long as she is renting rather than being permitted by the vendor to get on with paying off a mortgage - that's a fact - although it's one that seems to have pressed your buttons - the OP is undoubtedly stressed too!!!

And although the OP may take some comfort from the thought that her prospective purchase may have gone up in value - because she hasn't exchanged - the vendor could at any time turn round and put the house back on the market for more money - so I doubt she derives too much comfort from that thought at the moment.

Which again illustrates why she is losing by being prevented from progressing her purchase.

You're in a chain, which is a pain, but whether you like it or not, without FTBs, the housing market dies, I wouldn't rush to blame them for all your woes - problem's are as often caused by mimsies in the middle who want to play both sides their way.

evrybuddy the OP, in her first post, stated

"It seems that if we pull out now, it's going to leave them over a shit creek without a paddle."

The OP made reference to pulling out.

Which brings me on to your comments about me blaming FTBs 'for all my woes' - where have I stated that at all??

And, let's face it, while the OP isn't paying off her mortgage yet, neither is she having to pay for any maintenance works on the place she rents as they are not her responsibility. The failure to complete seems to be with the OP's vendors' vendor from what has been stated.

It's twaddle to say the OP has 'suffered a real loss as long as she is renting' as nothing is contractual until exchange, it is all done on trust. That's the risk you take when buying and selling property in this country.

Hi. Many thanks for all the advices! It's a great forum with very warm people. Yes, we have considered our financial loss of pulling out and find it acceptable. The only concern is the next one is just going to be as slow. (has been more than 17 weeks now, far longer than 12 weeks, and still haven't exchanged).

There is one thing I don't understand, some of you said no one would and should exchange until they feel completely safe, but their "safety" is at the expense our uncertainty. And why should they think leaving us waiting is completely safe? In my opinion, better secure the buyer first, as if seller pulls out, you still get the buyer and will be a cash buyer next time. But if buyer pulls out, you won't be able to complete your own purchase as you need the money from your own purchase (at least it's the case for our seller). I don't know why they don't do that, and thus come to the conclusion they must think we are desperate and easy to manipulate. Please advise if I'm wrong.

Also, I doubt it's just our vendor's vendor's fault. They have never been honest with us. First, they were extremely slow in providing the documents. And even told us once that the documents were already on the way and would be there next working day, but it turned out, after chased them after a couple of working days, that they hadn't even got all of them. Second, only some two weeks ago, when it was already way too long for a no chain sell, did they reveal there was actually a chain. In this case, we feel we can gezunder them a little bit because of their dishonesty. Rent is a loss while mortgage payment is investment, not to mention we have a large deposit that makes mortgage payment a lot less than rent. Yes, like some of you said, they are not entitled to compensate, but their vendor are not entitled to compensate them, too, but they did.

there is nothing stopping you reducing your offer - the risks have been laid out in the advice above. Your vendors will not see things in the same light as you and may well leave you looking for anther place, so an additional 6+ months of rent.

@wowfudge

It's twaddle to say the OP has 'suffered a real loss as long as she is renting' as nothing is contractual until exchange, it is all done on trust. That's the risk you take when buying and selling property in this country.

That's nonsense - a contract has nothing to do with anything - the blunt point is that everybody who is renting is losing when compared to everyone who is buying - that's why people buy. It has nothing to do with the specific OP issue - it is an objective truth that renting is a loss compared to buying.

• a mortgage is an investment with a potential (almost certain) future return -
• rent is a payment with absolutely no future return

By not progressing the sale, the vendor obliges the OP to pay rent, thus denying her the opportunity of growth on her money. This is where the notion of compensation arises. But as everybody generally accepts - it is very difficult to get compensated for vendors' messing about.

Well that's all very well but for the first few years most repayments are of interest and make no inroads to the capital.

It makes no difference what proportion of your mortgage payment is interest or capital - as put simply your return is the amount you get for your house - you don't divide it into interest or capital.

If the OP sold her house in a year and made £10,000 profit it would be of no consequence how little capital she had repaid.

Of course, if house prices were static or fell it would be significant

To Caroldecker,

We think the chance that they will start looking for another buyer when they are about to exchange with their vendor is very low. We think although it's a seller's market in London, it's not as easy. Plus, because it's a seller's market, if they fail to complete, their seller is likely to pull out, and the next potential seller certainly won't compensate them for the stamp duty. If it sounds like bullying, then that's because they have been bullying us in a seller's market for so long.

To evrybuddy,

Thank you for clarifying things for me. We think rent in the period of prolonged purchase is a loss, and yes, they are not obligated to compensate. But if they can claim compensation from their seller without exchanging, then it would be hypocritical that they don't see our loss.

But OP, they were able to quantify their loss to their seller. You can't quantify your loss, it just smacks of 'well they got some money off, so we're going to try it too'.

Personally, I feel that gazundering, in most circumstances, is unethical.

17 weeks isn't a very long time. Yes, it's above the average, but I've often experienced much longer conveyancing times than that.

I'm afraid that it's quite frequent that you don't get the whole, or truthful, story when you enter into a home purchase situation.

I'd advise against, I think you'd live to regret it. Both morally and financially.

To Gazelda,
Financially there is a risk, and we understand and accept that. I don't know why I should feel morally "wrong" since they had been lying to us for so long. If dishonesty is the rule of the market, as you implied, then it's hypocritical to say only the gezundering buyer is unethical while seller's lie is just "the way it is".

Also, we are not trying to take advantage because they got extra money (in fact they didn't, the government did), we just want our loss to be compensated. And, if more buyers pull out or ask for reduction when they find they are cheated, then it would prevent sellers from lying.

Gazundering does seem far worse to me than what your sellers have done, I don't see 17 weeks as exceptionally long either. I am in the middle of this too, we are renting, trying to sell a house that is empty and trying to buy, I am not expecting to move before September.

We have said we are chain free but that might change, it sounds more incompetence than outright dishonesty.
I do get your point that it shouldn't just be accepted as the way that it is though, the whole house buying process in England is protracted and maybe too much is based on good faith.

Can tell you are FTB. 17 weeks is nothing for a chain. 12 weeks would have been minimum, if no chain. Ok, they weren't honest about chain. But you now realise there us one. You need to decide if risking requesting another reduction is ok. Ie if they pull out, are you ok with that?

OP - It's all very well agreeing with the poster whose views support yours, but your view that it is safer for your vendor to exchange on their sale to you before they are able to secure their purchase shows a lack of understanding of the house buying and selling process. The vendors are selling two properties and will have two lots of removal costs if they have to move into rented between sale and purchase. Renting means they will need to find fees, deposit, etc at a time when they are also going to have to pay other expenses (solicitors' fees, etc). Plus, in the London market they could find themselves priced out if they sell at the price agreed with you in December then have to look again now for a new place to buy.

Mind you, in London they could well find another buyer at the drop of a hat and you could find you get outbid on everything you look at if you pull out of this purchase.

When did you get your mortgage offer confirmed? That was the date when you were proceedable - I bet that wasn't 17 weeks ago.

When you do stop renting, you will of course get your deposit back. You could always use that to make an overpayment on your mortgage to make up for lost time.