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What is Delayed Completion?

Phi Spencer

By Phil Spencer

The final phase of purchasing a property is called completion. This means that the house is legally yours and you’re able to move in. It’s also the point at which you pay the balance of the sale price, which is the agreed purchase price, minus your deposit amount, which is usually 10-20%.

However, what is delayed completion? In some cases, delaying completion can be beneficial for both buyer and seller. Despite this, it does have its drawbacks.

Why would you delay completion?

Agreeing the timing of your purchase can be an important negotiating tool. Offering a delay can, in some situations, help turn a deal in your favour.

It used to be that 14-28 days was the norm between exchange and completion. Now, it can be 2-3 months, or even longer.

Many sellers are anxious about making the next move and finding somewhere else to live, especially if they’ve lived in the house you’re buying for a long time. This can be particularly relevant in the case of older sellers or downsizers.

Reasons for delaying completion could be:

  • You’re awaiting speculative planning permission, and have exchanged ‘subject to planning’. This means you don’t have to fully commit until you’re certain you can adapt the property to suit your needs.
  • You’re relocating from abroad and have secured the property with an exchange, but don’t want to take possession until you’re back in the UK.
  • The buyers of your own property have asked for delayed completion. Therefore, you need to wait until the funds are available from your own sale to complete the purchase.
  • You’re moving area but can’t relocate until the end of the school year.
  • The property you’re buying has been let out and you’re waiting for the tenancy to end.
  • The seller needs extra time to either find a property to move to, or has a delayed completion on their purchase.
  • You’re buying a new build property which has not been constructed yet – delayed completions are very common in this sector of the market. There may also be a snagging list in place for your new build which you're waiting to be completed.

Issues with delaying completion

Despite these advantages for both you and the seller, there are some obvious difficulties with delayed completion. These include:

  1. If you’re the seller, you should be aware that you’re legally obliged to hand over the property in the same state it was in when you exchanged. Any defects or issues that occur between exchange and completion will fall to you to remedy. This can be problematic if a garden wall falls over, or you have an old property.
  2. Delaying completion can have financial implications. 10% is a large deposit if the completion is delayed by six to twelve months. So, in many cases it’s agreed that a deposit of only 5% is payable.
  3. Delaying completion gives the seller more time to change their mind about their sale. Technically, the exchange seals the deal, but the seller may try to change their mind and return the deposit.
  4. There’s no guarantee that the mortgage agreement in principle will stand when you eventually get to completing. Therefore, this needs to be carefully considered before entering into such agreement.

Delayed completion is something that you and the seller must mutually agree on, because it means that you won’t have your new home for a while, and they won’t have the cash for selling their home. But, it means you have somewhere to move into when you’re ready, and the seller is then ‘chain free’ for their future move.

Allowing a completion to drag on too long runs the risk of sale falling through. Property exchange systems like Gazeal can reduce the chance of this happening.

If you're reading this but not yet at this stage of your transaction and need a quote from a solicitor you can get one below.

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