Just how binding are conclusion of missives?

[KievLoverTwo]

Hi folks. We are buying an English house and the English sellers are buying a Scottish one.

Alarm bells are ringing for various reasons and they have already broken my trust in them. Ofc I can google this but it’s far better to come to those with real life experience.

Seller tells me missives have concluded and they are now financially committed. Date of entry is three or four weeks away.

The internet tells me two things:

A) It is very serious to pull out after missives and a court can force you to buy it anyway; OR

B) in practise, it is almost unheard of for a buyer to pull out at this stage, but if you did, the seller would expect you to pay for the cost of re-marketing the property, any difference between your offer and the offer they subsequently accept and the costs of any alternative finance the seller has to take out to fund a purchase they committed to on the strength of the sale of their house to you.

(source of 2nd one: https://hastingslegal.co.uk/renege-on-purchase/)

Having to pay for a rightmove or similar advert is far less binding than having to buy it even if you get cold feet. So what are your experiences, please?

I worked for solicitor estate agents for 30 years before trying something new 2 years ago. In my 30 years, not once did I have a file where someone pulled out once missives were concluded.

Isn't it rather similar in practise to exchange of contracts ? Only tends to occur earlier ( is bigger gap between missives and completion )

It isn't just rightmove costs! Read the Hastings article more carefully!

If they have concluded missives and as a result of your pulling out they are at a financial loss - perhaps they need a bridging loan - then you would have to pay for that

If they then accept 10% less to get moving quickly you would have to pay the difference ( and since you have to pay their difference I think they could accept 30% less to speed things and you would be liable ) - it could easily be a few hundred k not just a rightmove listing with purple bricks !

I've never heard of it happening. Even of the sale can't be forced, it wouldn't be the cost of a rightmost ad that would concern you, you'd probably need a new home report as well, and the sellers that had been shafted would have little incentive to sell for the best price when the buyer that shafted them can be forced to pay the shortfall, easily tens of thousands.

They are committed once missives are concluded. Their offer in Scotland might have been subject to sale of their property. I would have expected them not to proceed formally with the Scottish purchase/conclude missives until exchange of contract in England with completion date fixed.

Just to respond to a few things

They don’t need our money for the purchase

I don’t think this house would be likely to lose much on the sale of the seller remarketed

Home reports are around £600? They wouldn’t care about losing that

I remember reading on here some time back someone kind of bitterly saying that they had discovered to their detriment that missives are nowhere near as binding as they might seem, as the poster had discovered to their detriment

I think you are catastrophiinv

That’s quite fair

I do tend to go in that direction

This is a gigantic lifestyle change for them and their ability to follow through with it worries me

And they have recently lost our trust on other matters doesn’t help

but yes - fair!

Why are you not asking your lawyer this?

Surely they're the legal owner at this stage?

My lawyer is in England buying an English property from the English sellers for me

I doubt she would have a view on a matter of a transaction she has nothing to do with

Missives are binding. I had a colleague who pulled out after signing missives. She was English and didn’t understand how serious it was. She cost herself a fortune, it was utterly idiotic, but she wouldn’t listen to anyone.

I may be misunderstanding your post so apologies if I am .
The sellers ( who you are buying from) are the ones who would be responsible for any of the penalties if they pull out now. It wouldn't affect your position at all.
From my experience ,in Scotland we don't usually conclude until the last minute.especially on the purchasers side. It means they can pull out at the last minute with no financial penalties.
From the sellers point of view they would want to conclude much earlier so they know where they stand financially and can move on .so it's a balancing act between the two solicitors to find a happy medium .
All this is only relevant to both the buyer and the seller .not really relevant to you in this case.

When we bought this house (in Scotland) we did not find out until we moved in that the sellers had had a total nightmare with the house they had planned to move into, the lawyer had cocked up and there were all sorts of issues with extensions without planning permission and building control and so they decided to walk away from their purchase.

But because they had concluded the missives with us to sell, they had to move out and into a rented property while they searched again, because it would have cost them so much money. I've never heard of it happening.

Yes if the people you are buying from have concluded missives on a purchase then they are committed to the purchase. If they pull out and the house is subsequently resold for a lower price they are liable for the shortfall/difference.

I think the problem is, I'm being about as clear as mud!

In terms of how it affects me: it does. Because I'm three months into a purchase, and if they decide they're not moving to Scotland after all, I'm wasting my time with them. It's a far away location from me, I can't just pop in the car and get a backup plan.

Like I said, there have been other red flags with them (but as a PP also rightly stated, I'm completely assuming the worst)

Tbh if the people selling the Scottish property could then only get 10k less when they have to re-sell it again, and the people we're buying from have to fork up that 10k, I don't think they'd bat an eyelid at those costs.

How can you not have a solicitor involved in your sale?

So for you OP this is worrying because the penalties when pulling out won't deter your sellers.
That's a pretty shaky position for you,
Are you selling your property too ?( sorry I might have missed that )

That's precisely it, yes. These people are not cash poor and are in a position to retire almost 15 years early.

No, fortunately we are not. But we are absolutely climbing the walls with desperation to get out of our terrible rental, and this was meant to be the end of a two and a half year long house hunt - as unbelievable as that sounds.

We are not selling!

I have never known a sale to not go through after missives have concluded.

I think it's very very rare for someone to pull out once missives are concluded. If they did that their Scottish solicitor would almost certainly refuse to act for them again.

In 30 years of practice I have only seen this happen once
Cost the other side £40k and that was 15 years ago

It's extremely rare.

That's really reassuring, thank you :)

I have never heard of someone pulling out once missives are concluded. They are legally binding and the financial penalties to do so would be huge. I couldn't sign the missives on our current house until the person who bought my old house had signed missives for it.