Deposit Amount when Exchanging

Carlm

Hi,

Just reading through the conveyancing doc pack I just got, It says a normal deposit when exchanging is usually 10%. Is this a normal amount? the house were buying is 191k.

After exchanging if the seller pulled out what would happen, unlikely I'm sure, just want to know.

The survey was done today, how long does it usually take to get the results?

Thanks,

crusty_toenail

just completed last month, on a 190k house, didnt have to pay a deposit at exchange (which happened Jan), solicitor seemed to think their vendors solicitor wouldnt ask for one and they didnt!

timmyt

crusty_toenail wrote: »

just completed last month, on a 190k house, didnt have to pay a deposit at exchange (which happened Jan), solicitor seemed to think their vendors solicitor wouldnt ask for one and they didnt!

no you've been given wrong info.

OP - usually you pay 10% whiuch is held to the sellers ordser by their own lawyer...but if they pull out you get it back and the seller is liable for your losses.

sinbad182

It says that on the conveyencing forms I got through from my solicitors too (Barnetts). I just assumed that was a ballpark figure, and it just meant the deposit you're putting forward towards the purchase.

westv

it all depends.

If the property you are selling + any additional mortgage is covering the cost of the new property then you don't pay 10%

In the old days of 90%+ mortgages you didn't pay the full 10% deposit

Otherwise you normally do.

PasseySam

my understanding is that 10% is the normal figure but you can sometimes negotiate with the vendor to pay a lower amount (say 5%).

I am probably wrong so maybe some helpful conveyancing specialists can advise on this - I was under the impression that legally the vendors are entitled to and can pursue you for the full 10% in the event that you fail to complete, even if you only paid 5% deposit on exchange?

As I said I may be wrong though...

Richard_Webster

my understanding is that 10% is the normal figure but you can sometimes negotiate with the vendor to pay a lower amount (say 5%).

I am probably wrong so maybe some helpful conveyancing specialists can advise on this - I was under the impression that legally the vendors are entitled to and can pursue you for the full 10% in the event that you fail to complete, even if you only paid 5% deposit on exchange?

As I said I may be wrong though...

That's right.

just completed last month, on a 190k house, didnt have to pay a deposit at exchange (which happened Jan), solicitor seemed to think their vendors solicitor wouldnt ask for one and they didnt!

I suspect this poster was selling as well as buying and his solicitor simply used the deposit provided by his buyer on his related purchase.

The deposit figure on exchange is generally negotiable but now 95% mortgages are not available the norm is 10% but if you are in a chain and then it will often be 10% of your sale price - the important thing is that a buyer puts up enough money for it to be stupid for him to run away and not complete - because then he would lose the amount he would have put in and get sued for the difference between that and 10%.

crusty_toenail

timmyt wrote: »

no you've been given wrong info.

OP - usually you pay 10% whiuch is held to the sellers ordser by their own lawyer...but if they pull out you get it back and the seller is liable for your losses.

how can i have given wrong info, was stating a FACT on what happened with me, if this is not the normal course of events that is irrelevant to my fact!

Richard_Webster

Quote:
Originally Posted by timmyt
no you've been given wrong info.

OP - usually you pay 10% whiuch is held to the sellers ordser by their own lawyer...but if they pull out you get it back and the seller is liable for your losses.

how can i have given wrong info, was stating a FACT on what happened with me, if this is not the normal course of events that is irrelevant to my fact!

There are two possibilities:

1. The seller's solicitor really did not need any deposit at all on exchange; or

2. Crusty Toenail's solicitor did not need to ask him for any more money to provide a deposit because the deposit provided by a buyer below him in a chain was being used as a deposit on his purchase.

Both are possible, but the latter is more likely. All Crusty Toenail needs to do is to tell us whether or not he was selling as well as buying

PasseySam

Thanks Richard, helpful replies as always

In what circumstances would a seller not want a least some deposit? There's no way I wouldn't want some kind of security with such important transactions, but just wondered if there are instances when sellers don't need/want that. Just out of curiosity...

Gwhiz

PasseySam wrote: »

Thanks Richard, helpful replies as always

In what circumstances would a seller not want a least some deposit? There's no way I wouldn't want some kind of security with such important transactions, but just wondered if there are instances when sellers don't need/want that. Just out of curiosity...

None at all in the "normal" world!