Lack of 10% deposit at exchange of contracts?

summerday

Hi,
We are hopefully close to exchanging contracts. Our deposit is coming from the equity in the house we are selling ( we only need to borrow 60% of next house value). We only have enough cash savings to pay for our stamp duty and solicitors fees.

Does this lack of cash deposit mean that we will have to exchange and complete on same day, rather than be able to exchange a week or so before completion as we would prefer to do?

Many thanks.

carolineb23

I'm sure someone will be along shortly who can confirm, but yes I believe this is the case. There have been a couple of posts recently mentioning the fact the deposits are passed up the chain and you will need to make up the shortfall yourself. I couldn't understand how we had managed to do it until I remembered we exchanged and completed on the same day and I expect that was why.

loubel

You will use whatever deposit you get from your sale as deposit on your purchase. It isn't usually a problem if this is less than 10%, unless it's a lot less than 10%. Should you fail to complete you will still be liable for the full 10%.

corker

Just exchanged myself, we passed up the deposit from the bottom and are due to complete next week.

Our solicitor said the standard was that the deposit just gets passed up the chain, it does not have to be 10% for those in the middle and is usually in the region of 5%. The deposit made to us was just under 5% towards our next house and we weren't asked to make up the shortfall.

G_M

As corker says, you see how much deposit you will be receiving on Exchange from your buyer, and negotiate with your seller to pass that amount to them on Exchnage as your deposit.

Perfectly usual.