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Comments
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Option 2
Yes, where people are 'upsizing' they sometimes ask their seller to accept a lower deposit at Exchange but
a) not that low, and
b) the seller sometimes refuses, and
c) your buyer has left this negotiation to the last minute
Tell them to find the money (from family, bridging loan, whereever)
I'd agree with the "tell them to find the money" and the thinking behind my doing so would be that I simply wouldnt believe they were telling me the truth to say they didnt have it.
They have no excuse for saying they didnt know - in 2017 - and all the Internet access we now have.0 -
Combination of option 2 & 3.
Option 3 because: It is normal to pass on a exchange deposits up the chain, so when people are upsizing, the cash becomes a smaller % of the purchase price up the chain. If your vendor won't accept less than 10%, you will have to top up something from your savings. However this will reduce the balance you have to pay upon completion, so after this is paid, any remaining proceeds from your sale will come back to replenish your savings.
(Unless someone fails to complete which is rare), you putting in extra exchange deposit doesn't affect your expenditure or savings at the end of the transaction.
Option 2 because 2% is a very low exchange deposit. Yes, you have exchanged contracts that say if they fail to complete, you can recover the full 10% (or more if your damages exceed this) but you only have 2% in cash, the rest you would have to sue for and collect on, which is no easy feat. If they're struggling now to get any extra cash, you may have to force a sale of their assets (house?) which is even harder / more expensive.0 -
It took two months to find a buyer for a good condition, one bed flat, near loads of transport in London. There was an initial flurry of viewings then nothing for six weeks. EA has a lot of sold boards on our street and surrounding streets, but I can't find evidence that anything's really moving. I fear that our vendor won't wait for us to find another buyer. This is the second time she's tried to sell. The first sale fell through because the buyer couldn't get the mortgage.
Was it overpriced? I find it hard to believe that the market in London is so down that it'd take 2 months!
Still not sure what the problem is, if [your] buyer has only 2% deposit, how will they get a mortgage? Last time I purchased a property, the % of deposit is only relevant to get financing, the seller will not care as they will get the agreed price (minus their costs).
Your only option is to find someone who can afford to buy your place. Current buyer doesn't.
(I assume you have not exchanged as mentioned on the first post, so no one is in any binding obligations).EU expat working in London0 -
always_sunny wrote: »Was it overpriced? I find it hard to believe that the market in London is so down that it'd take 2 months!
Still not sure what the problem is, if [your] buyer has only 2% deposit, how will they get a mortgage? Last time I purchased a property, the % of deposit is only relevant to get financing, the seller will not care as they will get the agreed price (minus their costs).
Your only option is to find someone who can afford to buy your place. Current buyer doesn't.
(I assume you have not exchanged as mentioned on the first post, so no one is in any binding obligations).
You're mixing up exchange deposit with mortgage deposit.
-> Exchange deposit is what is paid in cash / passing deposit up the chain at the point of exchange, typically 10%. If the buyer fails to complete, they lose this exchange deposit.
->Mortgage deposit is purchase price minus mortgage amount, ie the equity you have in the house on purchase. This can come from cash savings or equity in your sale.
The OP's buyer likely has equity in their current home which they will get in cash when they sell (complete) and use this to pay for the purchase. However they don't have spare cash to pay / top up the exchange deposit to the full 10%. However if they only pay 2% on exchange, they can still afford the remaining 98% using the mortgage and equity upon completion.0 -
OP, is your buyer selling a property or are they a first time buyer?
If they are a FTB then I would be a bit more concerned as if they are only able to come up with 2% deposit then it sounds as though they are stretching themself to the absolute limit - where are they expecting to get the rest of the money from? I think it is worth asking your solicitor to push them both on coming up with the funds, and clarifying that their solicitor or conveyancer has got proof of funds for the rest.- presumably they are not gettting a 98% mortgage.
If they are selling then I would be less worried as in that case it is probably more of a cash flow issue, although still worth asking to solicitor to clarify with theirs.All posts are my personal opinion, not formal advice Always get proper, professional advice (particularly about anything legal!)0 -
moneyistooshorttomention wrote: »They have no excuse for saying they didnt know - in 2017 - and all the Internet access we now have.0
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always_sunny wrote: »Was it overpriced? I find it hard to believe that the market in London is so down that it'd take 2 months!
Still not sure what the problem is, if [your] buyer has only 2% deposit, how will they get a mortgage? Last time I purchased a property, the % of deposit is only relevant to get financing, the seller will not care as they will get the agreed price (minus their costs).
Your only option is to find someone who can afford to buy your place. Current buyer doesn't.
(I assume you have not exchanged as mentioned on the first post, so no one is in any binding obligations).
Most people will be taken by surprise when the property bubble finally pops. As always, London leads the way.0 -
The buyer is a FTB. Apparently he has a 95% mortgage so he must have convinced the bank that he has the 5%.
I saw my solicitor this morning. She has advised that we don't try to top up the deposit with our savings. As there are already alarm bells screaming out loud, if we end up not completing we will lose our savings as well. The solicitor has already emailed the buyer's solicitor again to ask for confirmation of deposit and has said that we cannot proceed without confirmation. The EA believes that the buyer's solicitor previously confirmed a 5% deposit, so the EA will chase the buyer and the buyer's solicitor again.0 -
eh?
the OP will not exchange on his purchase until such time as his buyer exchanges with him, so the Op is not "giving away" 20k of his own money.
it does not enable someone else to buy his house. It enables OP to buy the house he wants.
Granted that having exchanged with his purchaser there is a risk the purchaser will fail to complete, but again, that is why there are solicitors involved in the chain, and they should be kept up to date on what is happening and increased (or deceased) risks arising from the actions of the purchaser.
He only has £10,000 for a deposit instead of £30,000.
If he had a property to sell then the lack of deposit could have been solved when he sold his property.
As there was no mention of the buyer having a property to sell, I assumed that there wasn't one. Which there isn't.
If the OP uses £20,000 of her money to top-up the buyer's deposit, there is a chance that she may not be able to recoup that money.0 -
Find another buyer?0
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