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Delayed Completion? safe or not??

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  • Delayed Completion? safe or not??

    Hello.

    I have had an offer to buy my flat, the buyer wants to buy now but complete in a number of years (2-4). The idea being that in the meantime they can profit through any price rises, and I get the price I need now that I may not achieve on the open market.

    During the period of time before completion they would assume all legal responsibility for the upkeep and mortgage payments on the flat.

    I have looked online and found two other companies/people who do this
    allthewwws.guaranteedhomesales dotcodotuk
    allthewwwws.helpinghomeowners dotcodotuk

    There website explain the process far better than I can....

    Has anyone come across this before? Is it safe? Is it legal? Any advice really appreciated!

  • #2
    Re: Delayed Completion? safe or not??

    This is depends on the agreement. If the agreement is regardless of the delay of completion papers, no need to worry. But if there's an agreement of disbursement upon the delay of papers, there's a big problem on it.

    Comment


    • #3
      Re: Delayed Completion? safe or not??

      I do these type of purchases all the time and yes they are legal and safe and are very helpful to a lot of people in the current market conditions.

      The basic process is that you exchange now and the buyer pays stamp duty, if applicable. This means that you are guaranteed that house is sold like any other or in the event that completion does not occur you keep the deposit and someone has paid your mortgage payment for the next few years.

      A few questions:

      1) Is the buyer purchasing in their name or just selling on to someone else and acting as a middle man (not unusual for thse type of purchases) ?
      2) How much is the exchange amount ?
      3) Does any finance on the property stay in your name ?
      4) I presume that the transaction is going through solicitors ?
      5) Has the purchasor offered a reasonable price ?
      6) have you asked how many type of purchases has the buyer has done and do they have any testimonials ?

      I know most of the people who do these types of deals so if you want to private message me the name of the person I may be able to give you more background

      If you want any specific information about these types of arrangements provate message me and I will happily assist you.
      Adam Long

      www.quickhomeseller.co.uk

      Comment


      • #4
        Re: Delayed Completion? safe or not??

        Thanks for the replies, I am waiting on a formal offer in writing along with details on how they intend to go about doing this, in particular how they intend to keep the deal safe and secure for me.

        My understanding at this stage is that we would exchange now and complete in 2-4 years time. The proposed total purchase price is very agreeable!

        I believe the buyer already has a tenant in mind and is buying the property for them with a view to selling direct to them upon completing with me.

        My main concerns are:

        1) We exchange contracts, I move out, said tenant moves in and pays rent to my buyer. My buyer pays the mortgage.
        Tenant get made redundant and can no longer pay the rent, my buyer cannot afford the mortgage and defaults. Who is liable? Should my lender seek legal action for non payment of mortgage, who do they take to court?

        3) What if the flat burns down during the exchange period?

        4) What if my buyer DIES during the exchange period?!

        5) What if the flat gets inhabited by squatters during the exchange period?

        I am sure most of this will be covered when I get the formal offer but are there standard legal agreements for this type of purchase that cover these eventualities?

        Adam, thanks for you offer of help via PM, I may take you up on it, but have just realised I don't even know the name of the buyer???!! We last spoke on Monday and he/she is getting a formal offer together for me to read at the end of this week. I may scan and post the offer here for your perusal?

        Thanks all once more.

        Comment


        • #5
          Re: Delayed Completion? safe or not??

          Originally posted by Adam Long View Post

          A few questions:

          1) Is the buyer purchasing in their name or just selling on to someone else and acting as a middle man (not unusual for thse type of purchases) ?
          2) How much is the exchange amount ?
          3) Does any finance on the property stay in your name ?
          4) I presume that the transaction is going through solicitors ?
          5) Has the purchasor offered a reasonable price ?
          6) have you asked how many type of purchases has the buyer has done and do they have any testimonials ?
          1) In their name to let and then sell on
          2) I think about £115k, still waiting for clarification
          3) No secured finance on the property
          4) Oh yes, absolutely!
          5) Yes, happy with price
          6) 'Many times before' was the response, no testimonials offered or asked for...yet.

          Comment


          • #6
            Re: Delayed Completion? safe or not??

            Answering your concerns post first:

            1) Paperwork for a delayed completion addresses this, it is easier to get a "tenant buyer" (TB) out than a normal tenant. Generally if a TB defaults the procedure is a) They get to sell the property b) if they can't do that you get the right c) the property gets auctioned. You should ask the buyer for proof of payment of your mortgage on a monthly basis e.g. the money going from his account to the lender so you are aware of any non payment.
            2) Can't see a 2) !
            3) The only person legally allowed to insure the property is you as you retain legal title to the property. You must a) get the buyer to pay for this insurance b) name the buyer on the policy as an interested party
            4) See 1) the legal paperwork will cover this but tell the buyer that you want it to do so to make sure that it does
            5) See 4)

            Next questions:
            1) Sounds good - less complicated this way
            2) £115k on exchange sounds a lot but if that's true then brilliant
            3) In that case you will be providing vendor finance to the buyer and theron to the Tenant buyer
            4) Good, has the buyer asked you to use his solicitor as most solicitors will have never heard of this process and will either tell you that it is illegal (it isn't) or can't be done (they generally can't be bothered to look through the racks of books behind their desks to impress you !) Also who is paying the legal fees ?
            5) Good, the price on this type of deal is generally pretty close to the asking price as the buyer will make money on financing the Tenant buyer into the property. Just check the number of years you will allow until completion and get this written into the contract if you have a specific time frame in mind
            6) Sounds very non specific. I am not aware of anyone in the UK who has done very many at all ! Ask for a specific number and to talk to previous people the buyer has helped in the past.

            Just do me a favour, do not mention my name to the buyer or that someone on a forum who does these deals has helped you as it's a small community

            Thanks
            Adam Long

            www.quickhomeseller.co.uk

            Comment


            • #7
              Re: Delayed Completion? safe or not??

              Thanks for the concise reply Adam, and don't worry, I won't mention names, places, forums etc....

              I will post again once I know more details so I can discuss specifics.

              Thanks once more.

              Comment

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