Emyr Pierce

Professional Legal Services | Cardiff

Cardiff: 029 2061 6002

You are here: Home / Archives for mortgage offer

I changed my mind about buying a new house – can I get my deposit back?

I have made a commitment to buy a new property from a national developer.  I have changed my mind and do not wish to complete.  Will I be entitled to the repayment of my deposit?

Sometimes a prospective buyer will commit to buying a new plot from a developer, although the anticipated completion date of the plot can often be up to 12 to 18 months later. All developers now require prospective buyers to make a commitment to purchase at the earliest opportunity and, in most cases, within 28 days of paying a reservation fee on their plot.

While these deadlines are often extended to accommodate delays in the receipt of mortgage offers and other issues, the builder will proceed with the prospective buyer provided he is satisfied that the buyer is making genuine attempts to reach as early an exchange of contracts as is practicable.

The danger is that the projected completion dates for these new build properties can be up to 18 months in the future.

On exchange of contracts a contractual commitment is made on the part of both parties whereby the buyer is obliged to complete within 14 days of the developer notifying the buyer’s solicitors that the property is structurally complete. If the buyer wishes to withdraw following exchange of contracts, the buyer is strongly advised to contact the developer immediately.

The developer may sympathise with the buyers’ predicament and agree to cancel the contract and return the deposit.  However, there is no obligation to do so and the risk is the developer will keep any deposit already paid.

Worse, the developer may hold you to the terms of the contract and insist you see it through. This would mean that you would have to complete when the building was structurally complete and then to immediately re-sell.

These are the dangers of committing to a purchase so far in advance. Personal circumstances can change.

* Emyr Pierce is Managing Director of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email law@emyrpierce.co.uk

Tieing in transactions all depends on timing

I have already exchanged contracts on my sale and have found a property to purchase. However I am due to complete my sale in a fortnight. Can I tie in the two transactions?

This will depend entirely on your seller and your Lender. On average a mortgage offer will take four to six weeks from application to issue, but some Lenders are more efficient than others. Provided the funds can be made available it also requires your seller to co-operate and assist you in completing quickly.

Finally, it is a question of paperwork and the legal aspects which, contrary to public opinion, can be done relatively quickly – provided all the other parties involved in the transaction work at the same pace as you and your legal advisors.

Provided the Lender expedites your mortgage application, the sellers’ solicitor is prompt with the issuing of contract papers, and your seller is happy for you to take occupation as soon as you want – then you have a chance!

Of course, if someone can lend you the money required to complete until your mortgage monies come through then you have a real chance.