QUESTION: We are buying a new house. Contracts have not yet been exchanged though we have appointed solicitors, as have the sellers. We are due to complete the sale of the house we are living in tomorrow and I am now worried that the price of the new property could be hiked up at the last minute. Can they raise the price?
ANSWER: You say you are completing the sale of the house you are living in tomorrow, so presumably you have somewhere to live for the period following the completion of the sale of your home and the completion of the purchase of your new property.
Generally when moving home people do try to tie in their sale and purchase if at all possible. However, for whatever reason you now find yourself in the position where you are completing the sale tomorrow — which suggests that you have already exchanged contracts on your sale and so have entered into a binding contract from which you cannot withdraw without penalty.
Regarding your purchase, contracts have not yet been exchanged and so on the face of it you have no legally binding agreement with the seller, which of course means that they can change their mind at any time and may increase the price — or indeed may decide not to sell the property to you at all.
To avoid such a risk, simultaneous exchange of contracts is common as it means that binding agreements are in place in respect of both the sale and purchase.
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If you have a question for Fiona McNulty, please email email@example.com or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE. We regret that questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a legal director in the private wealth group of Foot Anstey.