Longer period between exchange and completion

[Ladyof]

If we agree a 6 to 8 week wait between exchange and completion could you think of any potential negatives between this?

The reason is the person we are potentially buying from don't know when they can move abroad with
Covid and they cannot go into rental as disabled and it is so hard to find something that suits.

During a pandemic i would worry in case any parties got seriously sick and became unable to move or even died. I believe this is why a lot of house sales are being exchanged and completed on the same day at the moment.

We needed a 3 week gap, a bit unusual but worked out well, the chain wouldn't have been happy with any longer than that though, it tends to make people uneasy.

You need to insure the house from exchange, as you will be forced to take on any damage that occurs between the two dates.
What happens if the move abroad falls through?

It used to be the norm for at least four weeks between exchange and completion. You have to put down a completion date on exchange, though this can change, but only by a day or two. I don't see how exchanging helps in this case, other than it gives you both security, but it doesn't give the seller any longer time to find a place - he will be legally obliged to sell you the house on or very near to the completion date.

I'm in he same position as a seller as I need longer completion. It's exactly that - for security! My buyer messed me about for a while, not saying it's hte case with the OP, but I will need to rent aymway and if things fell through with a quick completion I'd be stuck.

Longer completion gives time to find a rental / arrange airbnb - for then gives the more time to move abroad but also to have a plan B - knowing that if you put a deposit on a place you won't lose it (plus all the packing needs to be done in advance as there is a lot to pack).

*for them / gives them

They still have to leave at completion. Do they realise that?

A gap is useful as it gives time to do all the stuff you can start before exchange.

@bilbodog

During a pandemic i would worry in case any parties got seriously sick and became unable to move or even died. I believe this is why a lot of house sales are being exchanged and completed on the same day at the moment.

But what would happen if seller did die? Would the house sale still complete on the planned day? Wouldn’t the contract still stand?

It's very standard when buying a new build, the gap can be months.

As the buyer, the biggest potential negative for you is that after exchange, you forfeit the deposit if you don't then complete - and the greater the time between exchange and completion, the more chance there is of something going wrong.

Not that that's likely, but for instance - when the first lockdown started, it made some banks panic and withdraw mortgage offers they'd made at a high loan to value. There were people who'd already exchanged and no longer had the means to complete, so they lost their life savings. I've also heard of this happening where people have lost their jobs between exchange and completion (the mortgage offer was conditional on a regular income which they no longer had)

I had this when I bought my current home - we had 8 weeks between exchange and completion at the request of the vendors. As the buyer, it is very difficult (and expensive) to find insurance that will cover you for such a long period - standard maximum is 30 days before occupancy. My solicitor had a clause entered into the contract which meant that in the event something catastrophic happened (eg the house burned down), the costs would be borne by the vendors, We exchanged and I took out my own insurance as soon as I was able (30 days before I moved in). It’s entirely possible, but make sure your solicitor does similar.

Ypsilanti can two insurances overlap? As a vendor can I keep my existing insurance an then the buyer will start his - as you say - 30 days before the move? I can't remember cancelling y insurance as a vendor before until I moved.

I live abroad and there are lots of people unable to relocate here due to border restrictions which change all the time. I would be very nervous relying on their ability to move abroad in determining a completion date. If they don't have the possibility of moving into rented should plans change do they have any other options? It's very risky from their side as well as yours.

@CatAndHisKit

Ypsilanti can two insurances overlap? As a vendor can I keep my existing insurance an then the buyer will start his - as you say - 30 days before the move? I can't remember cancelling y insurance as a vendor before until I moved.

I think so, yes. As seller, I’ve never cancelled mine between exchange and completion either, but I guess some people might.

We had a long exchange time as the house we were buying still needed to find a rental .
Instead of the normal 7 days we had 4 weeks.
Obviously there is a risk as if anyone pulls out before exchange they still have to pay any charges and deposits back . We had a covid clause put in too just incase anyone in the chain got ill during that period . Think that’s pretty standard these days .