Paying deposit for new house with funds from current sale

doolallygal

Hi,
I am in the process of (hopefully!) moving house.

I am wondering how it works with paying the deposit on the new property when the money that we will be using for our deposit is tied up in our current house (that we are selling)?

I understood that you had to pay 10% before you actually complete, we are in a chain so how does this actually work as we won't have the money until our house sale completes?

Feel that I should know the answer, and I have tried searching but don't seem able to get correct combination of words to come up with anything

Thank you

kingstreet

You don't need a deposit to physically hand over. Your solicitor will simply apply the funds from the sale to the purchase.

twirlypinky

kind of depends whether you're changing mortgage company or not. Either way, this should all happen on your behalf by your solicitor.

The money starts at the bottom of the chain and just works it's way up. In theory for this to work, you need to exchange on your sale and purchase on the same day, your solitor will pass the proceeds from your sale onto your vendors solicitors in order for them to move forward to their purchase. Make sense?

Richard_Webster

Your buyer will supply a deposit on exchange which should be 10% of your sale price but might be less if he is replying on getting 10% of his sale price form his buyer (which could be less). Your solicitors offer the deposit from lower down to your seller's solicitors - it is a reasonable amount they will accept it.

The maximum is 10% so lower figures down to 5% or less are often accepted. if the amount gets too small in relation to the purchase price, then a person going up market may have to find an amount to add in to that offered, but this doesn't often happen.

doolallygal

kingstreet wrote: »

You don't need a deposit to physically hand over. Your solicitor will simply apply the funds from the sale to the purchase.

Ah thankyou - that has eased my mind - I was suddenly worrying about where we were going to get this 'extra' money from! Thanks :j

Jazzie99

doolallygal wrote: »

Ah thankyou - that has eased my mind - I was suddenly worrying about where we were going to get this 'extra' money from! Thanks :j

Funny, I was thinking the same thing about my purchase only this morning. I called my solicitor and he confirmed that the deposit from my sale will be used for my purchase.

Its worth giving your solicitor a call so he knows what monies and percentages he has to work with .... ie my buyers 10% (£26,500) wont cover my purchase 10% (42,000). He can then negoitate on the figures.