House buying

[Flimingo]

seller asking to exchange contract 2 months before the actual move.They need to show the contract to their seller for newly built house to secure the plot.

should I do exchange?

Do you want to buy the house?

Will you have a date set for completion? Im just wondering what happens if their new house isn't ready in 2 months.

So the seller of the property you want to buy is planning to move to a new build and the developer wants exchange? Usually, you reserve a plot when your own property is under offer and complete some time before completion of the purchase, unless the new build is at the end of a phase or the end of the building on the site.

That’s the whole point.we like house.They gave us assurance that house will be ready by mid to end March/April but you never know if last minute change and then?

we would be in contract already.Deposit will tie.

i m confuse how to proceed

We are putting 75% deposit.Rest is mortgage.

You exchange with a set completion date. If their house isn’t ready, they still have to move on completion. This happened to us and we’re in an air bnb for 3 weeks before our new build is ready.

Seller has to show contract exchange to secure Their plot to builder otherwise they will loose.

we are chain free.seller also chain free in a way but this too early exchage now creating trouble.

we dont want to loose house but equally not comfortable to exchange too soon with no sure movin date.

The seller of the property you are buying is themselves buying a new build, is that correct?
Can they move into rented in the interim, before moving into their new build, so there isn't a delay between exchanging and completing?

No I m afraid they can not move to rent

Yes I think that’s good idea.I can check that if they will be willing to move to rent suppose if house not ready on a fixed date

I wouldn't. There's too much risk for me to be comfortable. Say the house burns down. You're still on the hook to purchase it for the price agreed. You'll have insurance sure, but the sellers swan off to their lovely new home, while you have to deal with insurance companies and rebuilding.

Plus new build dates are notorious for long delays, particularly over winter (they never seem to plan in any float for wet or cold weather)

(Seller is not chain free btw. If they move into rented they will be chain free)

With a NB it is not uncommon to be SSTC when you reserve, exchange 6-9 weeks later and then complete anything up to 12-months+ later.
This means that a gap between E&C on your sale is usually protracted and the seller will often have to find somewhere to live in the meantime.

Our NB was some 13-months+ from reservation to completion.
We had a 5-month gap between E&C on our sale and then moved into another house we already owned for 6-months until our NB was ready.

Why? They'll have to if you complete and their new build isn't ready.

I mean previously they said they can not move to rent because we pushed for early move on our end.but with new situation I will ask that if they want contract exchange then they have to agree for a fixed move date and ready to go rent if they can not move out

You won't be able to exchange contracts without a fixed completion date though. It forms part of the contracts you are exchanging. So with that in mind, if they want the contract exchange to happen sooner, then I'd compromise by agreeing to exchange but with the completion date to suit my own needs.

How can a set completion date be enforced though?

No, I would not do this under any circumstances. I exchanged 2 weeks ahead last time and even that made me uncomfortable. You essentially have 2 months of liability for a property you don't live in.

It's easy to think 'i'll insure it', but you aren't the occupier and threads on this very forum have shown me that getting insurance to cough up during this period of non-ownership is a nightmare.

No idea what the law society (or whoever) were thinking when they decided on this liability shift at exchange. It's madness.

But the seller will not not vacate the property once their on ward new build will be ready to move to in.
Don’t you only start home insurance from the day you actually move in🤔

How much a safe & reasonable time frame between exchange of contract and completion date?

The house becomes your legal responsibility from the date of exchange - though you have absolutely no right of entry. You need to insure from then, and you'll need to find an insurer that agrees to insure while someone else is living there - not you. If it burns to the ground, serious water leak, flood, whatever, between exchange and completion, you'll find yourself in a legal shit show in which you have to pay lots of money for an asset that is no longer worth what you agreed to pay.

Your seller is taking the piss.

Make sure you have a chat with your solicitor and your proposed home insurer about the implications of the long period between exchange and completion. See if you can have the contract altered so the seller is legally liable during this 2 month period, they must insure and you can pull out without penalty in the event the property changes in any way between exchange and completion. Do another viewing the day of exchange before you sign.

This!!!!!!!

Same day exchange and completion is very stressful but ultimately safest.

If I moved again I would do really short max 2-3 days and just take a risk on things falling through and me losing deposit for movers etc.

I think I lot of people set their max as 1 week in reality. Depends on your risk appetite!

That’s scary eye opener😳.
i am first time buyer and still immature about nitty gritty of buying process.

Right.
my situation is seller saying their NB will be ready in March/April but they want contract exchange somewhere in new year time.

it does look like long period between exchange and completion

Should I put “ long stop date” in the contract and then exchange?