In The Process Of Buying A Traded-in House, Slightly Confused?

[Cletus Van Damme]

I'm buying a traded in house that was traded in against a new build Taylor Wimpey house. The traded in house will not be available until the current occupants move out. I'm told that this will be sometime in September. Yet I am being told that I have to complete this Tuesday, pay a large deposit that I have, over 100K.

Then when the house that the occupants are buying is available I'll be given 12 days notice as to when I get the keys. I have slight concerns, why do they need the money now, what happens if it is delayed.

I was told by my solicitor, that I should get house insurance once it completes, yet I'm really confused as the occupants are still in the house. I'm getting no interest on the deposit paid, what if the housing company went bust. I find it all so vague. I am dealing with a trainee solicitor.

Has anybody done this kind of thing before please?

 

[vickster]

I'm buying a traded in house that was traded in against a new build Taylor Wimpey house. The traded in house will not be available until the current occupants move out. I'm told that this will be sometime in September. Yet I am being told that I have to complete this Tuesday, pay a large deposit that I have, over 100K.

Then when the house that the occupants are buying is available I'll be given 12 days notice as to when I get the keys. I have slight concerns, why do they need the money now, what happens if it is delayed.

I was told by my solicitor, that I should get house insurance once it completes, yet I'm really confused as the occupants are still in the house. I'm getting no interest on the deposit paid, what if the housing company went bust. I find it all so vague. I am dealing with a trainee solicitor.

Has anybody done this kind of thing before please?

Demand to discuss with one of the solicitor partners.
Personally, sounds like way too much aggro

 

[Dirk]

I wouldn't give anyone 100K of my money unless I could take immediate possession of the item for sale, regardless of what it was.

 

[Cycleops]

You are right to be concerned. Once you have paid your deposit you are committed and contracts will be exchanged. If the occupants fail to move out for whatever reason it could drag on for months for reasons which you have no control.
You should insist you won't pay the deposit until the house is vacant or the occupiers undertake to vacant the house at completion.

 

[Lozz360]

I'm no lawyer, but something doesn't make sense. The day you complete, is the day you can move in, as the house is yours. If you can't move in, because the previous owners are still in occupation, then they are in breach of contract and are liable to pay for your out of pocket expenses (hotel for you and storage for your stuff).

Are you getting completing mixed up with exchange of contracts? When contracts are exchanged, you sign the contract (obviously), you are then committed to purchase at the price agreed, you pay your deposit, and you have a moving in date, also known as completion. I suspect the plan is to exchange this Tuesday and complete in September, but check with your solicitor for clarification.

 

[vickster]

I wouldn't give anyone 100K of my money unless I could take immediate possession of the item for sale, regardless of what it was.

As above. Passing some part of the purchase price is fairly standard upon exchange of contracts isn’t it? Although iirc it stays with the solicitors.
How much is the house?
If it all falls through between exchange and completion, monies would be returned (presumably excluding any incurred fees and expenses)

 

[uphillstruggler]

it sounds a lot of money to have sitting in someone else's bank account, earning them money. its almost a bridging loan to the developer until the house that they are building is complete so they can charge the new occupant for it.......

that's not in any way a legal viewpoint by the way

 

[Lozz360]

it sounds a lot of money to have sitting in someone else's bank account, earning them money. its almost a bridging loan to the developer until the house that they are building is complete so they can charge the new occupant for it.......

Typically, one would complete two weeks (but not always) after exchange of contracts. The deposit sits in your solicitor's account.

 

[vickster]

Typically, one would complete two weeks (but not always) after exchange of contracts. The deposit sits in your solicitor's account.

Can be rather longer but that would all be agreed by the various parties in the chain. This sounds very one sided

 

[AuroraSaab]

Sounds like a mix up between Exchanging and Completion. Sometimes people do give a non refundable deposit, as a show of good faith in case they drop out of completing the sale. Not £100k though. I would think your biggest worry is that the house will not be built by the move in date, or the new owners have snagging issues that take weeks to resolve.

 

[vickster]

Are the current occupants moving into the new house as a swap? If so, surely the developers should be completing that part of the deal before selling the vacated property. Seems dodgy

 

[Brains]

Its a new one to me!

If it's your house, then the occupants become your tenants.
You should have a STA in place and they should pay you rent (even if it's only a token amount)

If it's not your house, but they want a 'guaranteed' buyer, then any money should be paid into an escrow account.
Which means whilst you may not have the money, nor do they.
The money is only released under certain conditions
(As you say, what if the builder goes bust ? They must not have both money and an uncompleted house)

You need to ensure you have an exit strategy as it is very common for delivery dates on new houses to slip, often by months.
I deal a lot with builders, and I've never met one that sticks to a delivery date
(Last renovation I did, they started 6 weeks late in September, said they would be out by Xmas, finally left in May!, so nearly triple the original estimate)

I presume you are getting a good deal due to the flexible delivery date, but it is essential that you get a early and late delivery clause
The delivery date must be between this date and that date.
If it is earlier then are you prepared to take it (and do you pay a premium for early delivery?)
If it is late then there is a penalty, per day, for late delivery up to a maximum number of days
After that (either side?) has the option to pull out

Google maritime law, "missed laycan dates"
As clauses like this are standard in Charter contracts

 

[Brains]

I just found a maritime clause covering the above issue, it runs to 100 lines of legalese.
(Standard Escrow Agreement for Sale & Purchase - BIMCO 2017)
You need something similar!

I think the easiest thing to do is to make the occupants your tenants, and change a reasonable rent.
They in turn can get the rent paid by the builder (So if the builder goes bust, your agreement is with the tenants not the builder)
But don't exchange without possession of either property or Escrow!

 

[Cletus Van Damme]

I phoned the solicitor. It is the solicitor that keeps hold of the money until it is completed. It is the house building company, Taylor Wimpey that insists on this being done so that they apparently know the house is sold. They wanted me to complete on Friday gone, and Taylor Wimpey were threatening to remarket the house. I couldn't get the money that quickly as some was in Premium Bonds. I just told them where to stick it if they couldn't wait and just put it back on the market. I'm feeling like doing that now.

This just involves me handing over loads of money now, including solicitors fees that could go to crap. At least I know now that it is not with the builder, as I wouldn't of done it.

To be honest now if I knew back then when I bought the house, as I do now, I'd of walked. I live in a rented house so I'm not under the cosh. The house I am buying is a 6 year old Persimmon house, and I was annoyed to find that despite it being Freehold, I have to pay an annual maintenance fee, as the council don't adopt these new build estates, and a £250 administration fee to register the house with Trinity management company, that do the maintenance of nothing it would seem. w**k**s

 

[nickyboy]

The last thing Taylor Wimpey want is to be left holding the traded in property. Presumably they are giving you a good deal. No way they're going to modify their T&Cs just for you. So you've either got to pay such a huge deposit so as to effectively guarantee TW that you're buying the house they don't want to have or you walk.
It's really down to what sort of deal you got on the buy price. If it's a great deal, I'd suck it up. If not, I'd walk