How different is the process buying a house when you own outright?

koorb

Ok, so my wife was previously widowed and she owns her house outright. Now we are married we are looking to move (about to put an offer in) however we are both new to house buying and just difficult to figure out how different the process is. Crucially do we still require a deposit even though we wont be taking out a mortgage?

All thoughts and advice is welcome.
Warm regards.

cte1111

My parents were in a similar situation e.g. moving when they owned the property outright. You don't need a deposit, as long as you are downsizing, e.g. moving to a cheaper house.

At exchange, the solicitors pass the deposit up the chain, e.g. your deposit will be paid from your buyer's deposit. If the house you are buying is more expensive then you would need to make up the difference. So I think you might need 10% of the difference between your selling and buying price. There might well be a way round this though. I'm sure other people will be along with more expert advice soon.

PasturesNew

The process is exactly the same, except you don't need a mortgage. Because you don't need a mortgage you'll have to work out which survey you want to have done on the house and you'll arrange/pay for that yourself. Apart from that bit, everything's done by a solicitor the same (they have less work to do as they're not dealing with a mortgage company).

As for a deposit - you won't need to have a physical deposit, just a theoretical one (because your deposit is tied up in the house that is owned outright). This would mean that at exchange your 'deposit' is just a debt you incur - and the only time you'd need to pay that out physically is if you bizarrely tried to pull out of the deal after exchange and the seller sued you for it. At exchange there'd be a theoretical deposit - and on completion the solicitor would hand the full amount of the house purchase price over to the sellers in one go once they had received the funds from your buyer. That's instantaneous on completion day, then they phone you and you go to collect the keys.

googler

Have you got an offer on, or have sold STC the current house?

Thrugelmir

Your solicitor will require you to have a 10% deposit available upon exchange of contracts. As others have said this may come in part from the deposit paid by your buyers. So in effect the money gets passed up along the chain.

The process hasn't changed significantly from your point of view. Though the solicitor will undertake far more searches and enquiries, and complete far more paperwork than used to.

G_M

When you sell your wife's property, you will receive 10% of the price at Exchange of Contracts. You can use this as the 10% deposit for your purchase, assuming the 2 10%s are the same.

The balance you receive on your wife's property at Completion, and this too can be used to pay the balance owed on your purchase.

geoffky

we just paid the full amount on exchange of contracts ,remember to get your own full survey done.

G_M

geoffky wrote: »

we just paid the full amount on exchange of contracts ,remember to get your own full survey done.

Either you Exchanged and Completed on the same day, or you did your own conveyancing without understanding what to do, or what you mean is you passed the full amount to your solicitor on Exchange and he then paid the seller the relevant amounts at the relevant times on your behalf.

koorb

Wow thanks for all the feedback! Really helpful.

googler wrote: »

Have you got an offer on, or have sold STC the current house?

We have had no offers in 18 months but we had Gateway Homes come and give an offer which, of course, is a much less that it's worth but we are very eager to move and in fact the house we have made an offer on today is well within gateway homes offer anyway. We also have some investor friends looking into some options for us. So either way we should be top of the chain.

Just good to find somewhere to get some advice, bit of a minefield of information for newbie buyers.

Thank you

Jeffrey_Shaw

G_M wrote: »

When you sell your wife's property, you will receive 10% of the price at Exchange of Contracts. You can use this as the 10% deposit for your purchase, assuming the 2 10%s are the same..

Even if they're not, the incoming deposit on your sale is usually accepted as the outgoing deposit on your purchase.
And so on, up the chain.

nomoneytoday

If the difference is small, the vendor may accept a lower deposit.
I accepted a 5% deposit, and completion a week later for example on my last sale.