Vendor wanting to delay completion

[Paddingtonthebear]

A property of interest has come on to the market but the vendor does not want to complete the sale and vacate for 6 months.

What are the pros and cons of this? the main issue I can think of is mortgage offer only being valid for 6 months. Anything else?

As long as you lock in the sale by exchanging, there aren’t many issues.

The probably would be if they don’t want to exchange until nearer the completion date, and you have the issue of the sale falling through hanging over you the whole time

You might also want to discuss some sort of indemnity in case there was a big change to the stamp duty rates between exchange and completion but that would probably depend on the value of the property

At least they’re being upfront with any potential buyers instead of stalling just because they want to. I know a handful of people that has happened to

@SW1amp exchanging so far I'm advance is really not a good idea! If the OP god forbid was made redundant or became ill/suffered a life changing injury which would impact her employment/income then the mortgage offer would be withdrawn and the OP still liable for 10% of the purchase price because she had exchanged.

What is the reason for the delay?
Will they 100% be in a position to move in 6 months?
What are are their plans for an onward move? Is there a chain that could collapse?

The 6 months wouldn't worry me as long as I was certain it wouldn't get pushed back.

If completion is to be delayed then exchange should also be delayed, to protect the buyer against changes in circumstances. I'd be really reluctant to sink time, effort and money into a purchase that was subject to so much uncertainty (and uncertainty always increases with time).

Why does the vendor want to delay so long? They should delay marketing the property rather than completion.

We had a 4 month delay between exchange and completion, and those sorts of gaps are becoming increasingly common due to the fucking stupid policies on not letting people view houses until their own house is under offer

If you can’t begin your own house hunt until you’ve effectively wrapped up the sale on yours, it is going to mean a long gap unless you’re able to do a short term rental in between, which the vast majority of people can’t do

If someone is so worried about redundancy or job loss that they can’t risk an early exchange, they probably shouldn’t be buying a house at all..!
Mortgage offers are rarely withdrawn by lenders between exchange and completion unless the borrower flags up they can no longer afford to borrow
If the redundancy happens the month/day before or month/day after completion, it’s the same outcome ultimately

We had this - 8 months in this case. Is it rented?

We just thought it seemed like an obvious one for falling through before exchange and I was worried what might happen to the place between exchange and completion. Sounds mad but it just felt like a bunch of unknowns and there's already loads of that in the process when it goes well.

It is unlikely, sure, bit it CAN happen and its a big risk . Imagine, you have a car accident and suffer catastrophic injuries and can no longer work. Now imagine if you had paid an exchange fee upwards of £25k before this happened and could not get it back? As I say, unlikely but not impossible and personally not a risk I would be prepared to take.

Not rented. Vendor relocating but date is based around exams

@MalbecandToast

It is unlikely, sure, bit it CAN happen and its a big risk . Imagine, you have a car accident and suffer catastrophic injuries and can no longer work. Now imagine if you had paid an exchange fee upwards of £25k before this happened and could not get it back? As I say, unlikely but not impossible and personally not a risk I would be prepared to take.

But how is that different from it happening the day after you move in, and having the house repossessed and losing the same or more?

Or it happening in the standard few days between exchange and completion?

It’s a very bizarre attitude to take when you buy a house

Of course if could happen any time, but if your already in the house you can try to work out alternatives e.g. paying the mortgage on one wage or with the benefit of PIP etc but if your not and the mortgage provider pulls out you've lost everything. I'd be very surprised if a solicitor would be in favour of exchanging contracts 6 months before completion.

Well, DD's offered on a house at the end of March and completed 21st September, so it might take that long anyway! especially with Christmas and Omicron thrown into the mix.

@PlumManor oh absolutely the difference though is your daughter won't have paid 10% of the purchase price which is completely unrefundable 6 months before moving in.

@MalbecandToast
I get that but a) the mortgage company will only withdraw if you tell them, so why wouldn’t you crack on and then work out what to do?
B) it’s SO vanishingly small that it’s a very strange thing to treat as a big risk
C) it’s only going to become more common given that so many agents will only now let you view houses once your own is sold

Agents in my area now will not accept offers from anyone who isn’t in a secure sale - under offer and ready to or already has exchanged
Or you are expected to take our bridging finance to fund the exchange and then delay the completion for months so you complete with the funds from your sale

The only way a chain can support this is with big gaps between exchange and completion, so it’s going to become the norm in a lot of areas, particularly expensive areas where people are in a position to take out bridging finance

People who have a blanket refusal to do it will only be able to move if they are willing to take on a short term rental
And presumably that is ‘too big a risk’ for you as well, because if you have your massive car crash a few weeks into a rental and therefore can’t house hunt, you’re stuck there but paying twice as much as a long term rental

No I am all for rentals actually I do it every time I move. Big difference though between losing say £9k on a six month lease and £45k in exchange deposit but its cool, everyone has their own ideas about risk. I get that I'm risk adverse when it comes to money. If you are happy to risk losing exchange money with a long gap that's co for you

Wow @MalbecandToast please can I sell you insurance?!

I don’t think I’ve heard anything as bonkers as someone willing to sink £9k to mitigate a one-in-a-million chance of losing £25k

OP, If you were really worried about something like malbec describes, you can take out a critical illness and accident insurance policy to cover you but a lot of mortgage companies will probably ask about this at the application process if you’re going for a high earnings multiple anyway