Conveyancing advice

[Shropshire Lad]

Hi all, just wondering if anyone can come up with some advice in this matter. My partner is selling her house and wants a delayed completion (March). She has an offer of full asking price but the guy only wants to put down 5% deposit upon exchange on the grounds that if they have an early exchange (which they both want) then he is taking all the risk. He is stating this on the basis that she can walk away from the deal between exchange and completion with no loss other than her legal fees.

We know that exchanging contracts forms a legally binding contract to sell the house but we could do with a short statement explaining what the legal implications are for the vendor if we defaulted on the deal. Unfortunately Google has come up short on this front.

We aren't really that bothered about the 5% thing but there are one or two danger signs with the buyer and we aren't that keen on rolling over on this request so early in the conversation.

For info, her house went on the market on Saturday night, they viewed Sunday and the offer came in on Monday.

Thank you, Gary

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[walkerwek1958]

If I was the buyer I wouldn’t be happy with a delayed completion date of 4/5 months. To my mind you’re either selling something or you’re not, if someone wants a rapid completion I would do everything reasonable to meet that. Perhaps the house has been marketed too early?

I’m in the process of buying a house before mine’s sold, ideally I’d like an overlap if 3-4 months to make changes to the new one, but if someone’s prepared/ able to complete faster I’ll go with it. The shorter the time between exchanging contracts and completing the deal the better IMO.

[Shropshire Lad]

If I was the buyer I wouldn’t be happy with a delayed completion date of 4/5 months. To my mind you’re either selling something or you’re not, if someone wants a rapid completion I would do everything reasonable to meet that. Perhaps the house has been marketed too early?

I’m in the process of buying a house before mine’s sold, ideally I’d like an overlap if 3-4 months to make changes to the new one, but if someone’s prepared/ able to complete faster I’ll go with it. The shorter the time between exchanging contracts and completing the deal the better IMO.

Thank you. But you've completely missed the point.

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[Integrale]

Having done this and the sale subsequently fell through, I would recommend proceeding directly with the sale if happy and rent in the interim.
Time does neither party any favours. House buying is largely governed by emotion.

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[ejtrent]

Having done this and the sale subsequently fell through, I would recommend proceeding directly with the sale if happy and rent in the interim.
Time does neither party any favours. House buying is largely governed by emotion.

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this

[Shropshire Lad]

Just to clarify. Both parties are perfectly happy with an early exchange and a delayed completion. I am not seeking advice on whether this is a good idea.

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[Devonian]

Thank you. But you've completely missed the point.

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Just to clarify. Both parties are perfectly happy with an early exchange and a delayed completion. I am not seeking advice on whether this is a good idea.

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Your posts aren’t very clear. What exactly do you want advice on?

[sevvy]

Hi all, just wondering if anyone can come up with some advice in this matter. My partner is selling her house and wants a delayed completion (March). She has an offer of full asking price but the guy only wants to put down 5% deposit upon exchange on the grounds that if they have an early exchange (which they both want) then he is taking all the risk. He is stating this on the basis that she can walk away from the deal between exchange and completion with no loss other than her legal fees.

We know that exchanging contracts forms a legally binding contract to sell the house but we could do with a short statement explaining what the legal implications are for the vendor if we defaulted on the deal. Unfortunately Google has come up short on this front.

We aren't really that bothered about the 5% thing but there are one or two danger signs with the buyer and we aren't that keen on rolling over on this request so early in the conversation.

For info, her house went on the market on Saturday night, they viewed Sunday and the offer came in on Monday.

Thank you, Gary

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The buyer can rescind the contract, retrieve deposit plus interest and costs from seller (e.g. conveyancing costs). Such things would be drawn up in standard conditions of sale between buyers and sellers conveyancer.

[Shropshire Lad]

Your posts aren’t very clear. What exactly do you want advice on?

This:

"We know that exchanging contracts forms a legally binding contract to sell the house but we could do with a short statement explaining what the legal implications are for the vendor if we defaulted on the deal."

Apologies if that isn't clear. We are looking to provide a statement that will reassure the buyer that we cannot simply renage on the deal once contracts have been exchanged. However based on Sevvy's reply it looks like there is little we can do to reassure the buyer as the only downside to us would be interest on the deposit and reimbursement of their legal fees.

Thinking about it this is probably not the right platform to ask for this type of advice so thanks to those that replied and apologies if the original post wasn't clear.

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[Devonian]

This:

"We know that exchanging contracts forms a legally binding contract to sell the house but we could do with a short statement explaining what the legal implications are for the vendor if we defaulted on the deal."

Apologies if that isn't clear. We are looking to provide a statement that will reassure the buyer that we cannot simply renage on the deal once contracts have been exchanged. However based on Sevvy's reply it looks like there is little we can do to reassure the buyer as the only downside to us would be interest on the deposit and reimbursement of their legal fees.

Thinking about it this is probably not the right platform to ask for this type of advice so thanks to those that replied and apologies if the original post wasn't clear.

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No worries, I think it’s probably a conveyancer’s question as there’s legal implications. However I would add if it’s only just gone on the market and you’ve a couple of doubts about the buyer, I’d keep it on the market for now and hopefully you’ll get an offer that’s more comfortable. It’s over 5 months away so time is on your side.

[Chris_in_the_UK]

As I understand this, if the seller pulls the sale after exchange of contracts then the deposit is refundable (plus interest) and any legal fees as a result also rest with the seller.

As regards a reassurance/statement to the buyer that this will not happen - I doubt there is a realistic way to do this.

Part of the pitfall process in buying/selling houses.

[walkerwek1958]

Just to clarify. Both parties are perfectly happy with an early exchange and a delayed completion. I am not seeking advice on whether this is a good idea.

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You’ve lost me buddy........no way would I exchange contracts and be happy with a prolonged delay.

Just sell the house, get the deal done, and rent for a few months. Alternatively, don’t market the house till January.

Can’t help thinking your partner wants the spice and the ha’penny in this situation, either be thankful for a quick sale and deal with the downside or delay the sale; exchanging contracts and having a subsequent 4 month delay sounds and feels wrong to me.

[Shropshire Lad]

As I understand this, if the seller pulls the sale after exchange of contracts then the deposit is refundable (plus interest) and any legal fees as a result also rest with the seller.

As regards a reassurance/statement to the buyer that this will not happen - I doubt there is a realistic way to do this.

Part of the pitfall process in buying/selling houses.

Thank you

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[Merkaholic]

Hi all, just wondering if anyone can come up with some advice in this matter. My partner is selling her house and wants a delayed completion (March). She has an offer of full asking price but the guy only wants to put down 5% deposit upon exchange on the grounds that if they have an early exchange (which they both want) then he is taking all the risk. He is stating this on the basis that she can walk away from the deal between exchange and completion with no loss other than her legal fees.

We know that exchanging contracts forms a legally binding contract to sell the house but we could do with a short statement explaining what the legal implications are for the vendor if we defaulted on the deal. Unfortunately Google has come up short on this front.

We aren't really that bothered about the 5% thing but there are one or two danger signs with the buyer and we aren't that keen on rolling over on this request so early in the conversation.

For info, her house went on the market on Saturday night, they viewed Sunday and the offer came in on Monday.

Thank you, Gary

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Standard practice is 10% on exchange. In a general sense, with the current state of the property market, its best to take 1 stage at a time, im assuming you have just started the process..... In that case once the buyer is further down the road then stick to your guns on a 10% exchange.

There is a far more in depth process than just forfeiting a deposit if the buyer fails to complete on the set date.

God forbibid the vendor pulls out after exchange, then they will have a very hefty forfeit in terms of legal proceedings on their hands. They would end up picking up the bill for the complete chain as they are the ones at fault. Vendors solicitor would never allow a abortive post exchange unless it was life or death situation or mutually agreed.

When I worked as an estate agent (14 years ago) I only ever had 1 abortive sale post exchange and that was because the purchasers bank withdrew the mortgage offer due to fraudulent reasons. The purchaser forfeited his 10% deposit and the vendor......basically laughed all the way to the bank as he was selling the property in order to pay a few debts off (rental property). He obviously decided to keep the property.



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[Maysie]

Just to clarify. Both parties are perfectly happy with an early exchange and a delayed completion. I am not seeking advice on whether this is a good idea.

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This cannot be 100% true.

If BOTH parties were perfectly happy, then the buyer would not be raising the reduced deposit as an issue.

You have said that you are not seeking advice on whether this is a good idea or not, so there is not much more to say as it clearly is not a good idea.

[Shropshire Lad]

Standard practice is 10% on exchange. In a general sense, with the current state of the property market, its best to take 1 stage at a time, im assuming you have just started the process..... In that case once the buyer is further down the road then stick to your guns on a 10% exchange.

There is a far more in depth process than just forfeiting a deposit if the buyer fails to complete on the set date.

God forbibid the vendor pulls out after exchange, then they will have a very hefty forfeit in terms of legal proceedings on their hands. They would end up picking up the bill for the complete chain as they are the ones at fault. Vendors solicitor would never allow a abortive post exchange unless it was life or death situation or mutually agreed.

When I worked as an estate agent (14 years ago) I only ever had 1 abortive sale post exchange and that was because the purchasers bank withdrew the mortgage offer due to fraudulent reasons. The purchaser forfeited his 10% deposit and the vendor......basically laughed all the way to the bank as he was selling the property in order to pay a few debts off (rental property). He obviously decided to keep the property.



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Thanks, that is precisely the type of input I was looking for.

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[Merkaholic]

Thanks, that is precisely the type of input I was looking for.

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If you need any further advice please PM me. More than happy to help where I can.

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[broxie]

the guy only wants to put down 5% deposit upon exchange on the grounds that if they have an early exchange (which they both want) then he is taking all the risk. He is stating this on the basis that she can walk away from the deal between exchange and completion with no loss other than her legal fees

This statement is incorrect. If you fail to complete after exchange then you are liable for all of the vendors fees and costs regardless of how much they were holding as a deposit. He has been incorrectly advised.