Signing a contract without a completion date and authority to exchange

by Readers Question

14:06 PM, 25th October 2017
About A year ago

Signing a contract without a completion date and authority to exchange

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Signing a contract without a completion date and authority to exchange

Q1 If we sign and return the contract (completion date left blank on it) to the solicitor, can he proceed with exchange of contracts without any further instructions/agreement from us? Can he wait until we have a completion date agreed before we return it?

Q2 If we sign and return the contract, can we still (prior to exchange) renegotiate on the purchase price if our mortgage expires and we are having to incur additional costs?

Conveyancing work on our purchase is pretty much done and the solicitor is chasing us to sign and return the contract, sign the authority to proceed to completion form, as well as transfer the 10% balance as soon as possible.

Our chain is complete since end of August (3 vendors, plus us at bottom as buyers only) but we do not have an expected completion date yet as there has been little progress elsewhere in the chain for the past 6 weeks. The contract we have been given to sign is therefore silent on the completion date.

Our mortgage offer from Accord expires in just under 3 months (bear in mind Christmas and new year will mean about 2 weeks of zero progress for others in the chain). Therefore we do not want to exchange contracts before agreeing any completion date given the likely interest rate rise next week and the slow conveyancing progress elsewhere within the chain to date. Ideally we wanted to complete before expiry of our mortgage but this is looking unlikely at the this rate.

Oh and I heard today from our estate agent that the property at the top have agreed to a price cut causing further delays as a new memorandum of sale needs to be issued before searches and enquiries raised…

Many thanks for your thoughts!

Golo



Comments

Neil Patterson

14:09 PM, 25th October 2017
About A year ago

Signing and returning the contract to your solicitors just allows them to exchange contracts quickly when and only when you are ready and all monies are in place.

Well that is the theory and mostly practice.

John Pettman

9:44 AM, 26th October 2017
About A year ago

I would have difficulty in believing a contract was sent to you with NO covering letter saying as an example " Please sign in the place indicated and return to theses offices where it will be held on file pending the formal exchange of contracts which will not take place WITHOUT YOUR PRIOR CONSENT "" To say that a new price has been agreed will NOT have prevented searches and enquiries been raised Tese are matters that have no relevance to searches and enquiries. The only slight delay to a revised price is where a mortgage was issued with the details of the OLD price and in that circumstance the lawyers will need and will have to advise the mortgage lender of the new price and that would generate a new offer showing the revised price

John PettmanLL.B (Hons)

Puzzler

12:11 PM, 26th October 2017
About A year ago

The completion date is set at exchange, so you would normally return the signed contract prior to that but subsequently agree the dates with your solicitor. Delay in returning the contract will not help if you are seeking to expedite the transaction. He should confirm with you when he plans to exchange and complete - he will have to notify your lender of the dates for release of funds and you for your deposit. You should ask him/her what their procedure is but by not sending it back you are causing a delay.

Golo Chung

14:25 PM, 26th October 2017
About A year ago

Reply to the comment left by John Pettman at 26/10/2017 - 09:44
There is the 'authority to proceed to completion' form which we need to sign to give permission to exchange and complete but it asks us to send the 10% asap. Obviously this is not acceptable for us as no potential exchange/completion date (and we earn interest at 3% on this amount currently).

I agree, I was puzzled by how a renegotiated price would have delayed searches and enquiries on the property by 4 weeks!

Paul Tarry

16:48 PM, 26th October 2017
About A year ago

I purchased a part exchange house and the new one was under construction, I exchanged with a clause of completion within or on three months from xxxx date, we completed the day before the last date

When I exchanged the new house was allegedly only a month away, the old owners got really funny with me (about nothing in particular) but on the last day they were sat outside the new house with 2 x furniture vans on the drive whilst waiting for monies to move etc...at which pouint the old owner rang me and asked if they could not complete could they stay in the old house for an extra week...my answer was NO

Puzzler

9:10 AM, 30th October 2017
About A year ago

There's no need to send the deposit unless you want the money to be there ready. I would make sure it's there (cleared) about a week before and they should be able to give you that much notice especially as it is driven from another part of the chain.

John Pettman

10:48 AM, 30th October 2017
About A year ago

You need to make a decision do you want to get this matter completed as soon as possible or not. If you do not want to send any money until everyone is ready to exchange that's fine but it will cause a delay. Your sellers are quite likely not to be too pleased to know that although you have been asked to send 10% deposit you have not done so , Bear in mind that your Solicitors will not have someone sitting by a screen just waiting for your deposit monies to arrive and also bear in mind that when everyone is ready to exchange a completion date will be put forward. By the time you get round to sending the deposit and your Solicitors receiving it as cleared funds people can and do change their minds. The choice is yours, but don't complain about the time the transaction has taken when you have the means to make it quicker.

John M. Pettman LL.B(Hons)

Golo Chung

17:28 PM, 30th October 2017
About A year ago

Reply to the comment left by Puzzler at 30/10/2017 - 09:10
From the authority to complete form: "There is a balance required of £XX,XXX, which needs to be received and cleared in our client account as soon as possible. We would prefer you to make the payment by money transfer (also known as CHAPS). CHAPS payments will clear in our account on the same day as they leave your account."

Agree with your second sentence, and it looks like we should be able to get our funds cleared with a working day's notice given the solicitor say CHAPS will clear in their account on the same day it leaves our account. I'm not transferring over £80k to them until I have a solid indication of when everyone else will be ready to exchange and complete, specially since I earn 3% interest on that balance (~£200 per month!) and my mortgage offer expires end of Jan 2018.

Golo Chung

17:35 PM, 30th October 2017
About A year ago

Reply to the comment left by John Pettman at 30/10/2017 - 10:48
Thank you, and we have made it clear to everyone else in the chain (our solicitor, agent and vendors) that we will transfer the required funds for exchange when everyone else have an idea of when they will be ready to exchange and complete as we have been waiting for 2 months now. Specially given our mortgage offer expires end of Jan 2018 and they have no idea yet when they will all be in a position to exchange.
Also see my comment above re cleared funds, so hopefully shouldn't delay exchange too long.

Puzzler

17:47 PM, 30th October 2017
About A year ago

I think you just need to tell your solicitor that as soon as you have an idea of exchange date you will transfer the funds, so could they tell you when that is likely to be. I am sure I don't need to tell you to ring your solicitor before you do and verify their account details if you have received them by email. Just be careful this authority to complete has not come from a fraudulent account (which might explain their attempts at haste) as I don't think a solicitor would ask you for the funds "as soon as possible" without any indication of date. If they are local to you pop in and speak to their reception.


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