Large Deposit - when does it change hands?

meggles

afternoon - we have finally settled on private house-swap. We have agreed on a 14-May exchange and 25-June completion date. They would like this 'lag' due to their booked holidays.

To finance property, we will be:
1- Transferring current £124,000 mortgage to new property
2- Transferring £66,000 equity we have in our current property
3- Transferring £205,000 in new deposit.

Since the 'deposit' is over 50% house price, I don't want to transfer it until we truly have to. My current understanding is that the deposit is transferred at exchange. However, is it possible for us to negotiate a smaller deposit - based on the large amount & lag between exchange/complete? Is that something that our respective solicitors could sort out?

thanks in advance for any advice.

poppysarah

Ask solicitor.

I'm not sure I understand what you've written though.

Your house is worth (124 +66?)
the one you're buying is worth?

meggles

Selling house at £190,000
Buying house at £395,000

Cannon_Fodder

A deposit, in the sense of "committing to the deal" need only be 10% or so.

Or whatever the two parties agree to.

A large chunk of the deal being cash is only called deposit in your mind, because that is what you think of it as, when its not. Its just cash to top up the deal.

bingibongi

Contract deposit payable on exchange is normally 10% of the purchase price - in this case £39,500.00

I would recommend you ask that your solicitor asks that it be held by your vendors solicitors as "stakeholder" otherwise it may be passed up the chain. Although this is quite normal, if things do go pear shaped you might have difficulty recovering the full deposit if it has been passed up the chain .

meggles

makes more sense now. the 'committing to the deal' deposit - does that go directly from buyers to sellers? does it stay in solicitors escrow until completion?

question - because this is a house-swap (they're downsizing, we're upsizing), 10% 'committing to the deal' deposit (given at time of completion) is:

Them to us: £19,000
Us to them: £39,500

Would we just give them £20,500? What's to stop them walking away at that point? Up until this point we've been negotiating personally, as its a private sale. I'm trying to figure out when solicitors get involved, and I'm starting to think now. Right? They can help us figure this out.

sunshinetours

meggles wrote: »

makes more sense now. the 'committing to the deal' deposit - does that go directly from buyers to sellers? does it stay in solicitors escrow until completion?

question - because this is a house-swap (they're downsizing, we're upsizing), 10% 'committing to the deal' deposit (given at time of completion) is:

Them to us: £19,000
Us to them: £39,500

Would we just give them £20,500? What's to stop them walking away at that point? Up until this point we've been negotiating personally, as its a private sale. I'm trying to figure out when solicitors get involved, and I'm starting to think now. Right? They can help us figure this out.

I think you have answered your own question! Good luck and congratulations on finding a suitable house swap - very rare to find I would imagine