Deposit, exchange & completion...

RichPyke

OK, as a FTB I lack knowledge in these areas... which I hate (I'm someone who must know everything).

My offer on a property has been accepted, seller keen to sell (part ex house, seller is a builder). Exchange of contracts should be today and completion next Friday (29th).

My concern is that I haven't yet paid any deposit, and it's the day of exchange. Will exchange happen without the deposit being paid?

I spoke to the solicitors Wednesday asking about deposit and they said they were not ready for it yet as there is a query with the lender (sub-sale as it's a part ex house, lender does not allow sub-sales but does have exemptions, part ex is exempt).

Will exchange happen without the deposit being paid? Proof of deposit has been given to solicitors.

Any help would be very much appreciated. My solicitors don't seem to know how to use a phone so getting answers from them is hard!

firstaspect

I would have thought that exchange couldn't happen without the deposit.

Richard_Webster

Solicitor will have to get clearance from lender first so don't assume you are going to complete on 29th.

It usually takes 7-14 days to get the funds form a lender and your solicitor will not want to request the funds form lender until the sub-sale point has been cleared.

You should be already to send money to solicitor - he is very unlikely to accept a personal cheque - so you need to find out now what method of payment he will want so there are no delays when he asks for the funds.

RichPyke

Richard_Webster wrote: »

Solicitor will have to get clearance from lender first so don't assume you are going to complete on 29th.

It usually takes 7-14 days to get the funds form a lender and your solicitor will not want to request the funds form lender until the sub-sale point has been cleared.

You should be already to send money to solicitor - he is very unlikely to accept a personal cheque - so you need to find out now what method of payment he will want so there are no delays when he asks for the funds.

I've been in a position ready to send funds for weeks with the deposit sat in my current account (not earning interest) and the solicitor has said that they will give me all of the information re: paying deposit when they are ready for it.

I understand that the sub-sale needs approving, however as the solicitors are those who the lender sorted out, surely all of this should have come to light weeks ago rather than still being unanswered the week of exchange?

My question though is can exchange happen without the deposit being paid?

SmlSave

Exchange cannot happen without the deposit

FTBFun

SmlSave wrote: »

Exchange cannot happen without the deposit

I'm just going to be a bit pedantic here (sorry!) and say that the deposit in this case means 10% of the purchase price. If you have a higher deposit overall then the remaining balance can be transferred on completion.

Richard_Webster

I understand that the sub-sale needs approving, however as the solicitors are those who the lender sorted out, surely all of this should have come to light weeks ago rather than still being unanswered the week of exchange?

How long ago did the formal mortgage offer come out?

It is only when they get their copy that the solicitor can write to the lender about a sub-sale because otherwise lender can't trace it in their system! Lenders can take anything from half an hour to 6 weeks to deal with this sort of query.

Lenders are hopeless at dealing with this sort of thing. Things that we would consider quite fundamental they don't worry about at all and trivia like getting the post code right can get them in an almighty flap.

RichPyke

Thanks... I guess I should get Virgin to hold off on the installation (booked for 6th as I had assumed all would be fine) and cancel the sofa delivery.

I can't remember when the formal mortgage offer come out however it was weeks, not months (the whole sale process has taken 4 to 6 weeks).

But that's fine, not what I wanted to hear but now I know exchange wont happen today so can rearrange, cancel and delay stuff.

goldbyron

Exchange can't happen without a deposit - any vendor in their right mind wouldn't accept this. Fixed exchange dates often change (i.e. they are never fixed unlike completion dates after exchange) and obviously you are not ready yet - when you are your solicitor will ask you to send the deposit over in preparation.

RichPyke

Thanks. I guess it'll teach me to jump the gun and book things prior to exchange and having a firm completion date. Time to cancel stuff (luckily it's only cable & sofas, it could have been worse).

The silver lining is at least I will have more money when moving in now I guess. I'm just eager to move in ASAP.