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How do I delay the sale of my home?

October 2016

Question

I was in the process of selling my house and purchasing another. All was going smoothly. I signed my papers for both buying and selling on a Friday only to be told two days later that the house I was purchasing was no longer being sold. I obviously cannot back out of my sale.

My purchaser wants to move in quickly. How do I set about delaying this as I feel a heartfelt story will get me nowhere? More importantly, I have been told by PTSB that as my agreement offer has been withdrawn on my future house, my tracker will only remain in force if I have a new letter of agreement and if I have not closed the sale on my existing house. Is this correct? When they refer to “close of sale” on my existing house, do they mean when I hand over the keys or when I have signed the sale agreement, is it technically done and dusted?


Answer

“Chain” sales are probably the most difficult of all property transactions to complete and, given the number of parties involved, can fall apart at the last minute, leaving a trail of destruction behind. Having said that, I would be very surprised if you were left in a situation whereby you must complete the sale of your current house, without an onward transaction properly secured.

To be clear on terminology, “sale agreed” is when the price is agreed and the refundable booking deposit is paid by the purchaser to the selling agent. The parties are not yet bound to the transaction.

“Contracts signed” usually refers to when the purchasers have signed contracts and paid the 10 per cent contract deposit to their solicitor for onward transmission to the seller’s solicitor. The parties are still not yet bound to the transaction.

“Exchange” is when the seller has countersigned both contracts (they are issued in duplicate), and one copy is returned to the purchasers’ solicitor for completion. It is only at this point both parties are fully bound to the transaction. “Closure” or “sale closed” is when the final purchase monies are received by the seller’s solicitor and the purchasers have taken possession of the property.

If the purchaser needs a mortgage, the letter of loan offer from the bank is usually signed by the purchaser in conjunction with the signing of the contracts, so that both run in parallel. Loan or mortgage offer letters are only specific to a particular property.

Contracts signed

You should only be at “contracts signed” stage. In other words, you have counter-signed for the sale of your current home but not yet exchanged for that home, and signed for the purchase of the new home. As the sellers of your new home had not yet exchanged they could withdraw from the deal without penalty. You will also have quite likely signed for your loan offer but nothing further can happen with the loan offer as that transaction is not proceeding.

Alternatively, your solicitor may well have exchanged contracts for the sale of your current house, but there should be a “subject to onward purchase” clause inserted into your sale contracts.

Either way, you should not be fully committed to the sale of your current home. You need to check this important status with your solicitor. If you have exchanged on your current home and are committed, you will need to search quickly for another property. A new property will mean a new letter or mortgage offer.

I’m not quite clear about the detail of the PTSB loan offer, but I would have thought the priority is whether or not you potentially have no home. Perhaps you have an existing tracker mortgage on your current home and PTSB are allowing you move the tracker terms to the new home? If this is the case, the tracker could be preserved for the next property, but you need to check with PTSB on this detail.

Any loan offer can only run in parallel with a property purchase, but most importantly an 11th hour change in a borrower’s circumstance between contract exchange and sale closure can cause a bank to change the terms of a loan offer, or indeed withdraw the offer altogether.

I think you need to urgently meet your solicitor and seek an explanation in plain English of where you stand. I recommend you bring a list of prepared questions and if possible have an accompanying person along to help clarify the scenario.

Edward Carey is a chartered residential agency surveyor and member of the Society of Chartered Surveyors Ireland, scsi.ie