Downsizing/Downpricing - Deposit question

redgirlcamden

Hi, we are about to put our house on the market after living in it for 20 years. We have a small mortgage to pay off then we will be cash buyers on completion. We are downpricing, it seems the right time to do it in this crazy London market.

We don't have any cash for a deposit on our forward purchase other than cashing in pensions. So I suppose the question is how will this work ? Will have to exchange and complete on the same day ? Or will the deposit we get for our house on exchange somehow be used for our forward purchase ?

It's a long time since we've done this so sorry if this is an obvious question !

Dan-Dan

I didnt have a deposit either other than what came from my house sale , sols used a chunk of that at exchange (virtually , i imagine , as in not actual cash) with the balance being used on completion , and the surplus returned to me

redgirlcamden

Thanks Dan Dan, I've had a conversation with an estate agent who came out to value the house yesterday. I couldn't understand what he was talking about regarding this situation. I don't think he knew either as I couldn't get an intelligible answer from him.

We are having 2 more valuations so I could ask them too. I just really don't want to tell estate agents all our financial business .

Dan-Dan

You dont need to tell an estate agent anything regards your equity situation , thats a question for your conveyancer

redgirlcamden

Dan Dan, I'm meeting a solicitor next week, I'll take your advice and not ask/tell the estate agents anything else about our equity.

As I said it's been 20 years since we last did this .... I have barely started this process and I'm already getting annoyed at the agents chasing me to get into my house. It's madness.

Smi1er

You can exchange with no deposit but the vendors conveyance will put into the contracts that if you don't complete then 10% deposit will become payable.


When I bought my last place I didn't fancy 10% deposit earning no interest for two weeks so paid a small deposit and the vendor got their conveyance to add the 10% term.


Be warned that sometimes the vendors will use your deposit as the deposit on their new place.

Dan-Dan

Best take a stap back and deep breath , i struggled badly with the whole thing , 18 weeks it took , sent me mental , i promise never again but i know i will!

good luck , and yes , keep the EA at arms length when it comes to financials!

redgirlcamden

Be warned that sometimes the vendors will use your deposit as the deposit on their new place.[/QUOTE]

This is what is confusing me, hopefully we find a chainfree property !

Dan-Dan

Well , it doesnt really matter what your vendors do as long as no one pulls out after exchange and even then , there is redress to cover all costs etc etc

kingstreet

At the bottom of any chain, the buyers put in their cash and that passes up the chain as each property exchanges contracts.

Only the one with nothing to sell actually has to hand over any cash in preparation for exchange. Solicitors sort out all the others between them.

redgirlcamden

kingstreet wrote: »

At the bottom of any chain, the buyers put in their cash and that passes up the chain as each property exchanges contracts.

Only the one with nothing to sell actually has to hand over any cash in preparation for exchange. Solicitors sort out all the others between them.

Thanks Kingstreet, I do feel like I'm asking a really obvious question that I should know the answer to !

So from what you and Dan Dan say, this isn't a problem for us. I'm so glad I joined the forum, this has been perplexing and I couldn't find a direct answer anywhere else online:) !