HELP! I need advice on behalf of my daughter who is just about to buy a house

[carina62]

My daughter is buying a house with her partner as first time buyers. She is really worried and upset. Basically, to try and cut a long story short - her seller has been waiting for a New Build property to move into before he sells his house. The house is in effect sold 'subject to contract' to my daughter and her partner. They are due to complete and the end of this month (27th Jan) but the problem is that they don't have the £1,800 for the stamp duty fee (£1,000) and the solicitors fees (£800) and her partner does not get paid until 31st January which is 5 days after the due completion date. My daughter is telling me that the seller won't wait for 5 days which I find hard to believe as she said that his new build is ready to move into and that he will want to move in as soon as it is ready and my daughter thinks that the seller will pull out and do a part-exchange with the new build property owners if they can't complete on the 27th. They said they have spoken with their solicitors etc and there is nothing more they can do to help. They cannot raise the £1,800 so what are their options? Is my daughter telling me the truth? I just cannot believe that their seller cannot wait 5 days for completion. My partner last night told me he finds this hard to believe too. What do others think please? I appreciate any replies.

[Peridot]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

Hi Carina62,
A worrying time for all, house purchasing up there with divorce and the ikea run on stress levels!
Has your daughter exchanged contracts yet? You say that the property is sold subject to contract which would appear to indicate not. If they haven't exchanged then there is no binding contract at this stage and effectively either could pull out at any stage with no ramifications other than what fees have been paid to date and the stress and upset for those concerned. If they have exchanged then usually a completion date would have been set and your daughter and her partner would be liable for the sum (£1,800 plus the purchase monies) upon completion.
Is there no way to borrow the money to enable completion to happen on the 27th?
As far as the seller is concerned it wouldn't be in their interest to pull out at this stage (unless they already have another buyer in place) as it would then delay completion even further. With the best will in the world even a cash buyer would probably take at least 4 weeks to complete and that's with a good wind behind them. This would delay his moving date even further. Has there already been a discussion about completion dates ie is this the first they have heard of a proposed date or have they previously negotiated when they would be in a position to complete?
If they have not exchanged and there is no way they can raise the funds for the proposed completion on 27th then the ball is very much in the sellers court, whether they want to risk losing these first time buyers (who I assume have a mortgage in place) to delay their sale further or whether they wish to wait the further 5 days. If the sellers and buyers have not discussed completion dates and the seller is only providing the one date, it does appear rather bullish of them, but that is the sellers prerogative subject to them shooting themselves in the foot and potentially delaying completion even further if they need to find a new buyer.
If they have not exchanged contracts yet then at least there won't be further financial ramifications for her and her partner. If they have exchanged then they need to find the money as there would be financial penalties if they are unable to complete on the set day for completion.
Sorry I can't be more positive, other than pointing out the issues for the seller in pulling out at this late stage.
If there is a way she can borrow the money then make sure this is in writing to ensure the person lending can get their money back after payday.
I hope it gets sorted for them.

[carina62]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

Can they get a completion date without exchanging contracts? As far as I am aware, they have not exchanged contracts but they have a completion date of 27th Jan. Is this possible?

[carina62]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

I have just found out that they are set to exchange contracts on Tuesday and that my daughter's solicitor has told them that it's illegal to exchange contracts if they (the buyers) cannot meet the completion date. It appears the seller's new build is ready for him to move into on the 27th Jan and he wants to move in then so I guess completion HAS to happen on the 27th Jan and if my daughter and her partner do not have the £1,800 to pay by then, then the seller could quite easily pull out so I think the only answer is they need to borrow the £1,800 from somewhere (or I will have to borrow it on their behalf). It seems there is no other way :-(

[Peridot]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

Hi Carina62,
They can agree a date for completion but if they have not exchanged contracts then the date would not be set in stone. It may be they are just discussing when they would like to complete? A date agreed before exchange would not be enforceable. It is possible to exchange and complete on the same day, although this may incur additional fees.
At exchange the deposit has to be paid, they may also be billed for some of the necessary disbursements that have been incurred such as search fees although this is often taken from money on account that they would have been asked for at the outset. The remaining sum due including stamp duty, outstanding legal fees etc falls due upon completion. Before completion can happen all amounts have to be settled.
In the event of a mortgage advance then the solicitors would contact the lender to confirm when completion happens. Monies are then transferred to the solicitors who transfer it to the sellers solicitors who confirm once it is received and then release keys. The bank transfer system is often what causes the delays in completion on the day, where people end up sitting outside the new property waiting for the ok from the solicitors that they can now go into the property and take ownership.
Sorry a bit off track with your query, just trying to explain how it works.

[Peridot]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

Sorry Carina62,
I hadn't clocked the previous response re exchange and completion before I typed the last post. As soon as exchange has taken place then there will be financial penalties if they don't complete. Up to exchange either party can pull out. What about her partner's friends or family could they help?

[carina62]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

Sorry Carina62,
I hadn't clocked the previous response re exchange and completion before I typed the last post. As soon as exchange has taken place then there will be financial penalties if they don't complete. Up to exchange either party can pull out. What about her partner's friends or family could they help?

I have found out from my daughter that the seller keeps texting my daughter's partner to push their solicitors so he sounds very keen to get things moving asap regardless of the fact that my daughter and her partner would ideally like to stall the completion date by 5 days (I don't think the seller knows this though). She said he is being very impatient so I can't see him being happy about waiting another week to complete especially if his New Build house I ready to move in to. It does seem the only option is to try and borrow £1,800 from somewhere. Thanks for your replies though, much appreciated.

[Peridot]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

It sounds like it is the seller trying to push and not that the solicitors have said no way to the 31st. It needs to be agreed via the solicitors ultimately. I would suggest they tell their solicitor to put forward the date of 31st and see what happens. Just because the seller is pushy doesn't mean he'd be willing to pull out. If he refuses then make the decision. I suppose the issue is how quickly they could get the £1,800 together (do check the solicitor fees include Vat and any disbursements and there won't be any surprise further amount to find before complete!).
Good luck, never any harm in asking. The worst the seller can do is dig his heels in and insist on 27th or pull out which really would be of no benefit to him in the long run and would be pointed out to him by his solicitors.

[carina62]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

Does it make much difference the fact that he is moving to a New Build house and that he can exchange with the building company?

[Peridot]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

Hi Carina62,
in short no as his exchange with the builders would be dependent on him having the funds to complete, this may not be the case without selling his own property. He will be in the same position as your daughter and would have to have all funds available for completion. It wouldn't be recommended that contracts are exchanged and completion set for one of the property transactions and not the others in the chain, even if there is only one other transaction taking place in the chain.

QUOTE=carina62;700518]Does it make much difference the fact that he is moving to a New Build house and that he can exchange with the building company?[/QUOTE]

[carina62]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

Well, we have solved the situation - my partner has taken a loan out in his name, he got the funds so my daughter and her partner signed contract yesterday and exchange of contracts should take place today. A very stressful time for all of us but fingers crossed, they will get the keys on the 27th of this month.

[Peridot]

Re: HELP! I need advice on behalf of my daughter who is just about to buy a house

Hi Carina62,
So glad it's been sorted, if a bit of a pain for you and your partner. Hopefully the move goes smoothly for all.
All the best