Dumb question of the day!

missspeedy23

Ok this may be a really stupid question but what happens if there's a delay between exchanging contracts and completion with regards to the deposit?

The property were buying has been valued today so just waiting to hear back on the formal mortgage offer (everything crossed!)

But... we were told we'd need to exchange contracts in 4-6wks (say end Jan) (sellers buying new build) but I've read that the deposit needs to be paid at the point we exchange - but we don't have the funds til the equity is released, ie at completion, so how does that work??

TIA
Jo

gazfocus

Well the delay won't be between Exchange of Contracts and Completion. If you haven't got the deposit funds together, you cannot Exchange Contracts and if you don't Exchange Contracts, either party can pull out at any point.

Thrugelmir

You'll need to find the funds. Some of which should come from the deposit paid by your buyers.

kingstreet

Your buyer's deposit will be passed up the chain and you will normally not have to come up with anything, if you are selling.

missspeedy23

kingstreet wrote: »

Your buyer's deposit will be passed up the chain and you will normally not have to come up with anything, if you are selling.

Thanks, that makes sense. I think they'll have a large deposit on theirs so would more than cover ours... Phew!

CLAPTON

missspeedy23 wrote: »

Thanks, that makes sense. I think they'll have a large deposit on theirs so would more than cover ours... Phew!

usually buyers only have to make a 10% deposit so if your new property is at a higher price that the one you are selling then you will still need to top up the deposit.

kingstreet

In 29 years of doing this job, I have never once seen a party in a chain who is selling and buying simultaneously have to put cash in to increase their deposit for exchange.

The solicitors pass the first buyer's cash up the chain and it becomes a smaller percentage, as a result. I've never known one have a problem with this.

If anyone has had it happen to them, I will defer to their experience, but not once have I seen, or heard of it. The number of times it's come up on here, I'm sure we'd also have heard back from disgruntled members telling me I was wrong!