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Buyer only has 5% deposit!
Comments
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Their problem. The contract says 10% deposit on exchange. They need to find 10% deposit on exchange. Some of that might be an early draw-down from the mortgage, of course.Oh, absolutely. They don't come up with 10% deposit, no exchange.
I'm not really sure we are in a position to push back on this. It's unlikely that they will be able to find the extra £10K just like us - not in 2 days!
Our solicitor hasn't said that this will be a problem from the sale perspective so just waiting to hear about the purchase bit (unfortunately we are using 2 different solicitors!)0 -
Don't get confused between "deposit" - the cash they already have, so don't need a mortgage for - and "deposit" - the 10% due on exchange of contracts.
They aren't the same thing, despite sharing the same name.
Somebody with a 100% mortgage and somebody with a 50% mortgage would both need to commit a 10% deposit at exchange, even though one has a 50% deposit and the other no deposit at all in terms of advance cash.0 -
Somebody with a 100% mortgage and somebody with a 50% mortgage would both need to commit a 10% deposit at exchange, even though one has a 50% deposit and the other no deposit at all in terms of advance cash.
Not necessarily. As I and others have said, it doesn't have to be 10%. 10% is pretty standard in England but sellers accept less than that every day. It's negotiable and the 'standard' contract terms can be varied if both parties agree. And as libf's link shows, often the deposit that goes up the chain is just the amount that the FTB hands over, which is far less than 10% by the time it reaches the property at the top.
Back in the days of 100% mortgages, what typically happened was exchange and completion on the same day, simply because the buyer was unable to pay a deposit in advance of completion.0 -
Oh, absolutely - but if this has just come up two days before exchange, it's safe to guess that it's not been negotiated.pinkteapot wrote: »Not necessarily. As I and others have said, it doesn't have to be 10%. 10% is pretty standard in the UK but sellers accept less than that every day. It's negotiable and the 'standard' contract terms can be varied if both parties agree.0 -
pinkteapot wrote: »Not necessarily. As I and others have said, it doesn't have to be 10%. 10% is pretty standard in the UK
Some parts of the UK, maybe. We don't bother with deposits in Scotland and it doesn't seem to cause many problems.0 -
years ago, my buyer suddenly asked if they could only pay 5% deposit upon exchange of contract rather than the 10%
I asked my solicitor to give me their best advice : they said well no; so I said no
magically the buyer suddenly found 10%
but of course this proves nothing about the current situation.0 -
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At this stage in the game, everyone needs to accept that 5% deposit will be all that is passed along the chain. Despite what you read on forums such as this, the vast majority of transactions go without a hitch, so the size of the deposit is not that important.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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At this stage in the game, everyone needs to accept that 5% deposit will be all that is passed along the chain. Despite what you read on forums such as this, the vast majority of transactions go without a hitch, so the size of the deposit is not that important.
that's reassuring, thank you0
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