Waiting for seller

[Sarahljones]

Asking on behalf of a friend. She is buying her first house. Owners are selling to move into another property they are renovating. They are well progressed and nearly ready to exchange. Now the sellers are saying that their new property will not be ready for at least 2 months and possibly up to 3 or 4 months. Would you wait or try to find somewhere else? And if you waited, would you wait to exchange, or exchange now and have a very long time before completion? She loves the house and doesn’t want to lose it, but it seems like a long time.

Sorry if this isn’t clear. Because the property the sellers are moving into won’t be ready for several months, they are looking at 3 months before completion is possible, despite the sale to my friend being nearly at the point of exchange.

I did exactly that with my house. We exchanged in October with a fixed completion date in January. Their house wasn't ready and they had to move into rented.

What’s your friends situation? If she loves the house and isn’t under pressure to leave where she’s living then I would wait it out. If not I would threaten to look elsewhere and suggest the buyers move into rented - that would be the decent thing for them to do.

They would move into rental but there is hardly anything available in their area. I’ve advised her to just exchange now, even if it means agreeing 3 months between exchange and completion, as at least she will have some certainty. Interested in other views though!

It depends if she knew this when she offered, or if it was likely. Assuming she didn’t know this, I’d personally start looking around elsewhere with different agents, the vendors must know that’s a risk, and see what’s out there. She doesn’t need to pull out yet, you can pull out any time up until exchange in England (assuming England) with no financial penalties apart from what she will have already spent on surveys and fees.
Note this is very frowned upon on mumsnet, but she’s spending possibly the most money she’s ever spent, she should make sure she is getting the right deal.
I’d also caution about exchange with long completion in the current market - the last thing she wants to do is tie herself in to a higher price that if completion is sufficiently far enough away her mortgage offer may no longer be valid.

@Martinisarebetterdirty. Do you mean that her mortgage offer could be revoked? Or just that if it expires she won’t be able to get it extended?

If the market drops (as expected) and her mortgage offer expires before completion she may not get the valuation she needs again. If she’s exchanged she’s then liable for costs.

Assuming of course she doesn’t have pots of cash lying around to cover any shortfall in an updated valuation!

There is the stamp duty saving to consider too if they don’t complete by 31st March 21

Yep makes sense. I think her mortgage offer came through in September and is valid for 6 months, and of course 31st March is a hard deadline. She certainly doesn’t have pots of cash!

Has anyone else had a long gap between exchange and completion? Any other pitfalls?

The problem with a big gap between exchange and completion is that the mortgage company could change their minds either due to a change in your friend's circumstances or a general change in the mortgage market. Given its the sellers that want the long period between exchange and completion, I would only agree if the usual financial penalties for non completion were waved if your friend had a change in circumstance or can no longer get a mortgage.

@QueenStromba I don’t have much experience with this. Can the mortgage company just change its mind then? Can they do this at any point?

The vendors should go into rented and just put up with something that’s not quite right for a few months. I think they are being very cheeky. What happens if they still won’t/cannot move after the first delay? Just do it again? They are making excuses. I wouldn’t exchange. I would continue looking. If your friend is a good buyer they should accommodate her and move out.

I agree with pressing them to move into rental and start looking round at other properties

The mortgage offers are usually time limited. They might, in future, ask for a greater deposit or change the conditions in some other way. Your friend needs to ask about this. That’s why the vendor is being very short sighted.

[quote Sarahljones]@QueenStromba I don’t have much experience with this. Can the mortgage company just change its mind then? Can they do this at any point?[/quote]
I don't think it's normally very common but it happened a lot this year due to covid.

www.unbiased.co.uk/news/mortgages/thousands-of-homebuyers-lost-deposits-in-property-freeze

I don’t think the vendors are being deliberately difficult. They live in an odd place and there is really very little to rent

@QueenStromba I had no idea this was possible!

I was told by my mortgage broker yesterday that if lenders could put a stop to new lending at the moment they would - they’re tightening up the rules all the time and who knows that the next few weeks/ months are going to bring.

It's annoying, that's for sure.

But for those posters suggesting your friend starts looking for something else, it could quite easily take 3 - 4 months, to get to the same stage on another property, and then she'll be financially worse off as she'll have to pay another load of legal fees and mortgage arrangment/valuation fees.

Exchange contracts with a fixed completion date seems the least worst option, at least then she knows when the end point will be.

@Coriandersucks

I was told by my mortgage broker yesterday that if lenders could put a stop to new lending at the moment they would - they’re tightening up the rules all the time and who knows that the next few weeks/ months are going to bring.

They could if they wanted to!

But lenders make money by lending money.

@Mildura that was my thinking. Also she is v picky so she won’t find what she wants immediately

If I agreed to a long period between exchange and completion which I’d be highly unlikely to do for all the reasons listed by pp, I’d want the vendors to pay for my additional rental costs, i.e. reduce the agreed house price by three months rent. Why should the buyer absorb these costs because the sellers house isn’t ready?

@LemonadeFromLemons I think she is going to suggest this, but I guess it depends whether she is willing to walk away if they refuse