Exchange but delay completion? Is that ok?

[MrsTwentyNine]

Hi!

Sorry manic few days and I've ended up creating another thread in my frenzy but hoping some of you can help.

Vendor needs to find onward property as initial one fell through. We are the buyers - and our buyers need to move in within 3 months due to their own buyers!

We have secured a mortgage offer just before interest rates went up and we won't be able to afford the house we want with higher rates!

So my question is, can we request that the vendors exchange contracts so at least we know the house will be ours but set a completion date for when our mortgage expires ? (Around 5 months left!) Vendors have already said they won't vacate and rent so we were thinking of renting ourselves so as not to lose our buyers but would like some guarantee! It's such a tricky situation! Oh and we have a newborn..

Thanks in advance!

@TimeforZeroes ah of course. I'm trying to convince myself this isn't our dream house but it's so sad to think we were so close to upsize only for this to happen and taking us out of upsizing potentially for years now. Never mind. Sanity is worth more!

@wonkylegs ah I see :/ Thank you, it really is one of the worst processes to go through!

I think you can get insurance for the gap between exchange and completion. My house insurers provided it for free but that was only a month.

With the housing market the way it is and mortgages as well I don't think I'd be prepared to move into rented when your sellers haven't instructed solicitors yet. But I am very risk averse which is why I live in a tiny house with a small mortgage!

@Augend23 I didn't know that, thank you! Sorry to be so ignorant but do you mean insurance on the property we are purchasing so any damages are taken care of? Or is it a separate type of insurance that pays for any legal fees etc incurred if completion doesn't happen?

I'm also like you and usually risk averse! But just felt like this house was worth a gamble but you're also right in that it's a HUGE gamble when they haven't even instructed solicitors

We did this with our last move. We sold much more quickly that we thought we would to FTB, in the Feb and we were ready to exchange on our sale by the April. We hadn’t found anything to buy. We exchanged with a completion date of “on or before the 30 July”

However we were moving to a different area with school places the kids had at a new school in September. So we would have had to rent somewhere if necessary.

after we exchanged on our sale we found a house and ended up completing in the July so it worked out fine

Well once you've exchanged you should be guaranteed to complete but I imagine you can get insurance for that. You can insure against pretty much anything.

I meant insurance against anything happening to the house between exchange and completion (like it burning down) because you'd still be obliged to buy it even if it was a burnt out shell.

We moved into our newbuild earlier this year but as you say, there is a long delay between reservation, exchange & completion (nearly 12-months) so we moved into a family owned property for the intrim.
Exchanged on the sale of our old house in May 21 but our temporary house wouldn't be available until Oct 21 so this timescale was built into our sale.

Our buyers were a nightmare about other things but the delay between exchange & completion wasn't one of them!

So there are some insurances in case of a seller pulling out:

www.comparemymove.com/advice/buying-a-home/what-is-homebuyer-protection-insurance

But you would need to read the inclusions and exclusions extremely carefully as I don't know if many would cover your issues. It might be something where you need a specialist broker.

Just as an aside, contracts can be tailored by the Solicitors. It is the standard condition that the buyer takes the risk in the property between exchange and completion (so your house insurance should run from that date) but this can be changed by agreement.

For example, in new build contracts, because there is usually a long delay between exchange and completion, the standard clause is usually deemed not to apply and a new clause is added to specifically state the seller will insure up to the point of completion.

You can also change completion to be on notice rather than a specific date.

Basically everything in the contract can be negotiated but your solicitor and agent will need to help make that happen and get to a set of terms everyone is happy with.

Also keep in mind that not all solicitors are able to do this - some of the cheaper online conveyancers don't tend to offer tailored services. This doesn't stop you from switching to a firm of solicitors instead but check with your agent and the sellers first whether they're likely to agree to the negotiation before incurring additional fees.

@ThroughThickAndThin01 that's amazing!! I am so happy to read that. My only hope now is that our vendors are like you, which I doubt! But at least this is something I can propose to them. So it looks like you exchanged in April and completed July...so I guess 3 months in between. Thank you for sharing that!

@Augend23 thanks a lot - will look into it! I'm reading that even after exchange the vendor can pull out and we get our deposit back and any fees etc but still leaves us in the renting situation if they do. Good to know we can get insurance to cover such potential eventualities though, great shout!

@Dougieowner I know! Happy everything went well in the end for you though. I wish we had a bit more time but sadly our buyers timescale is too tight.

@Cakedoesntjudge thank you so much for that, I had no idea that contracts could be tailored! I have a feeling our solicitors won't be able to but it's worth asking them. That's brilliant!

We’ve got 5.5 weeks between exchange and completion and our solicitor suggested this (vendor insures). but she suggested it right on the verge of exchange and we didn’t want to delay any further particularly as she had already added a couple of things in the week before exchange.

Ah fair enough @Jarstastic thanks

Sounds like solicitors are the ones who need to help us with this...hope we have good ones!

Your vendors may feel very similarly - not wanting to rent in case they get stuck renting, and not wanting to exchange in case they can't find anywhere else when they could just carry on living where they are. That doesn't mean they were never serious.

I think it's ok to ask but it's probably rare that a seller would want to do this- I personally wouldn't.

It’s good you asked the question as it helps to be armed when speaking to the experts.

I don’t envy you. We have had 2.5 years of uncertainty and failed offers and transactions and 2 years of that in 2 rentals. It was worth it in the end as we have a better house than the original. (Though it’s costing us more and we have lost money by being in rentals). I don’t think I’ll be ready to move again for a long time! I’m still worried something will go wrong between exchange and completion!

@MarianneVos I understand completely what you mean. I guess it's harder to think from the other side. Just such a shame as we were pressured into taking our offer from the buyers because the vendors initially wouldn't even consider us until we were under offer, even though we said we are on the market and have viewings etc. But now we have a buyer, the vendor can't accommodate. I do realise it's not their fault but it's just so so frustrating all the same. Like you say, I'll ask anyway

@Jarstastic absolutely, I vowed never to move again after our first house move ...and here we are again. I hate the uncertainty and lack of control around the whole process! Glad you're in a better house though. With rentals sometimes, you only normally pay the equivalent interest of a mortgage , at least that's how we are trying to convince ourselves to move out to rent!

Update
Turns out our solicitors are crap too and offered no advice except we CAN ask them to delay completion...and just told me to speak to the estate agents!
What are we paying these people for ?!?

@MrsTwentyNine are you using a local firm and are your solicitors emails coming from a solicitor or case handler/conveyancer?

If you're using one of the internet companies then they tend to use teams consisting of a lot of case handlers overseen by one or two solicitors, they have ridiculously high case loads and are instructed to only proceed with basic transactions, I.e. standard contracts.

If you are using the above, give a local firm with good reviews a call and discuss whether they'd be able to do things any differently if you transfer your file over to them.

Trustpilot (or similar) reviews are great for when you're moving house. Look for individually named people who have a lot of positive reviews at the firm/company you're using and ask them to handle your matter.

If I were in your vendor position there is no way I would agree, because if I hadn't found a house and got to the point of completion by the end of March I would be homeless. If I'm moving because I want to (rather than need to) then my house isn't available until I'm no longer in it, buyers will have to wait or walk away, because worst case I can stay put.

But then I can never understand why people sell their own mid chain property and go into rented, putting themselves in a position of risk (as their vendor can pull out any time) just so someone else can have their house. You see it on here all the time where people don't want to let their buyers down so would rather create a tonne of hassle and risk for themselves instead, which I just think is bonkers

Maybe I'm just too risk averse!

@Cakedoesntjudge thank you for that! All the local firms were too inundated with workload to take us on so it's a company online I believe. Such a shame. We have already paid them for searches etc too...I guess something to bear in mind for the future :/

@Dragonskin I know what you mean. In our case, we don't think we can sell the house at this price anytime soon now with the market being the way it is, so cashing out now gives us a decent deposit to use and be chain free when the right one comes along (if the vendor changes their mind) I'm also usually risk averse but we figured staying where we are gets us nowhere either with the economy the way it is; we will be paying a huge amount a month to live in a less than ideal house with a little one. There's pros and cons with all decisions I guess!

Of course, but aren't you concerned about potentially being priced out, or losing your capital on rent payments if it takes you ages to find somewhere? I'd be too worried about falling off the ladder, or ending up paying more to not be any further forward out of desperation

@Dragonskin true but we worked out that we essentially just end up paying the interest in rent...of course it's still a gamble but a gamble worth taking for a dream house don't you think? There's no right or wrong answer here I guess!