http://www.moneysavingexpert.com/mortgages/house-buying-guide
In Singapore, we go by the option to purchase system. Once the buyer and seller agrees to a price, the buyer pays 1% of the purchase price as an option fee, which allows the buyer to exercise the option after around 4 weeks. The seller cannot back out. After 4 weeks, the buyer must pay the balance 4 to 9% to exchange contracts. Otherwise the option will lapse and the seller is free to sell her house to someone else.
After the exchange of contracts, both sets of solicitors will race towards completion, usually after another 8 weeks. If the buyer requires a mortgage, the bank usually takes around 8 weeks to disburse on settlement day.
We've had rotten experiences buying resale properties of late. It happens when the market is hot. The law is skewed towards the seller because there is NO OPTION TO PURCHASE agreement in UK except in Scotland. It is merely a gentlemen's agreement to exchange contracts usually 4 to 6 weeks' time. Meanwhile, the seller can refuse to take the property off the market.
What happened to us was that we agreed to purchase a property in Hammersmith for GBP390k. But the seller requested a GBP5k of "earnest money" and refused to take the property off the market. Since the market was hot, we acceded to their request. While working towards the finishing line, which is the exchange, the seller took it off the market because they realised the sale price was 50k too low. We meanwhile incurred GBP1.5k of legal fees.
Such a system usually benefits no one, except the solicitors. Agents will have to chase the deal before exchange and pray that the seller doesn't change her mind. In a down market, the buyer could demand the price to be dropped if they discover some minor fault in the property.
Up to 60% of the deals fell through in the last six months because greedy sellers shift the goal posts after they have agreed on a sale price. Some unscrupulous sellers instruct their solicitor to accept 10 offers and up the selling price every week until finally one buyer is left.
We wrote to the UK Financial Conduct Authorities but to no avail. This archaic system has to change, because it damages the credibility of the UK financial and real estate industry.
If you need advice on how to navigate such tricky purchases, do email me. Resale properties any where in the world is still cheaper than off plan. So you should persist, but the corrupt UK system MUST CHANGE.
In Singapore, we go by the option to purchase system. Once the buyer and seller agrees to a price, the buyer pays 1% of the purchase price as an option fee, which allows the buyer to exercise the option after around 4 weeks. The seller cannot back out. After 4 weeks, the buyer must pay the balance 4 to 9% to exchange contracts. Otherwise the option will lapse and the seller is free to sell her house to someone else.
After the exchange of contracts, both sets of solicitors will race towards completion, usually after another 8 weeks. If the buyer requires a mortgage, the bank usually takes around 8 weeks to disburse on settlement day.
We've had rotten experiences buying resale properties of late. It happens when the market is hot. The law is skewed towards the seller because there is NO OPTION TO PURCHASE agreement in UK except in Scotland. It is merely a gentlemen's agreement to exchange contracts usually 4 to 6 weeks' time. Meanwhile, the seller can refuse to take the property off the market.
What happened to us was that we agreed to purchase a property in Hammersmith for GBP390k. But the seller requested a GBP5k of "earnest money" and refused to take the property off the market. Since the market was hot, we acceded to their request. While working towards the finishing line, which is the exchange, the seller took it off the market because they realised the sale price was 50k too low. We meanwhile incurred GBP1.5k of legal fees.
Such a system usually benefits no one, except the solicitors. Agents will have to chase the deal before exchange and pray that the seller doesn't change her mind. In a down market, the buyer could demand the price to be dropped if they discover some minor fault in the property.
Up to 60% of the deals fell through in the last six months because greedy sellers shift the goal posts after they have agreed on a sale price. Some unscrupulous sellers instruct their solicitor to accept 10 offers and up the selling price every week until finally one buyer is left.
We wrote to the UK Financial Conduct Authorities but to no avail. This archaic system has to change, because it damages the credibility of the UK financial and real estate industry.
If you need advice on how to navigate such tricky purchases, do email me. Resale properties any where in the world is still cheaper than off plan. So you should persist, but the corrupt UK system MUST CHANGE.
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