Exchange of Contracts - 10% deposit

mrsw1983

delmar39 wrote: »

Thanks for this. I'll hopefully get some feedback from my solicitor today. How's the whole process going?

Seems to be moving on. We're hoping to complete mid Fed, so need to exchange within the next week or two!

Horizon81

I'm also a bit confused by this 10% deposit on exchange situation. Can someone clarify it through this example please:

House purchase price: £100K
Mortgage: £75K
Buyer's Deposit: £25K

On exchange of contracts, does the buyer have to pay £10K deposit (10%), then the remaining £15K deposit at some point between exchange and completion? Or does the buyer pay the full deposit (in this case £25K) on exchange?

Thanks

Richard_Webster

I'm also a bit confused by this 10% deposit on exchange situation. Can someone clarify it through this example please:

House purchase price: £100K
Mortgage: £75K
Buyer's Deposit: £25K

On exchange of contracts, does the buyer have to pay £10K deposit (10%), then the remaining £15K deposit at some point between exchange and completion? Or does the buyer pay the full deposit (in this case £25K) on exchange?

Thanks

Confusion is caused by the fact that the word "deposit" is used in two different ways. The deposit is only really the amount paid over on exchange of contracts which is never more than 10%. The seller wants the balance on completion and essentially doesn't care where it comes from. The 90% can all be provided by the buyer, or all by the lender, or a mixture of both.

So the answer to Horizon81's question is that his 15% needs to be paid to his solicitors in sufficient time so they can pay it (together with the money they will have received from the lender) to the seller's solicitors on completion.