Buyer only has 5% deposit!

Lu_Lu

Well, I've just been reminded that because we are using HTB we do need to have a 5% deposit so now we do have to come up with another £10k by Friday.

I'll just look down the back of the sofa shall I?

AdrianC

Then the whole chain falls through unless your buyer can come up with the 10% they agreed in the contract they have signed and expect to exchange...

Ball back in their court.

Lu_Lu

I would be with you normally Adrian, but we're buying a new build and if it falls through we lose that and a lot of money we have spent on it so far. Our buyers could walk away too and that would be no good. So close, but yet so far!

pinkshoes

How long between exchange and completion? 14 days? So can you not take a loan over 14 days for £10k?

You could get your buyers to agree to pay interest charges.

AdrianC

ANYBODY can pull out for any reason any time right up until contracts are exchanged. All bets are off, and anything anybody's spent is lost.

Right now, you have four basic scenarios in front of you...

1. Sit back and watch the chain collapse.
2. Accept the 5%, and find the £10k difference.
3. Accept the 5%, and get your vendor to accept 5% too.
4. Insist on 10%, as is clearly spelled out in the contract they cheerfully signed and are hoping to exchange in two days time.

You may well find that every single one of those options gently slides back up that list towards finishing up with number 1, of course.

Thrugelmir

pinkteapot wrote: »

You tell them the situation - they work on a solution.

Not their problem.

Thrugelmir

Lu_Lu wrote: »

We are 2 days away from exchanging

When's completion due?

moneyistooshorttomention

pinkshoes wrote: »

How long between exchange and completion? 14 days? So can you not take a loan over 14 days for £10k?

You could get your buyers to agree to pay interest charges.

Hmmm....maybe....BUT the buyers are the one with the "problem" (maybe......).

If anyone takes out a loan its them.....and I would pass the buck straight back to them personally and say "If loan is needed = its YOUR loan".

I am speaking as someone who remembers the situation (many years back now) where I was the one that was the FTB and no-one had explained to me that "deposit" means 2 different things. That is = THE deposit on the one hand and that 10% "deposit" malarkey at point of Exchange of Contracts time.

It really really is way beyond time that those involved in people buying a house explained to FTB'ers that there are two different interpretations of that word "deposit" - ie the deposit on the one hand and that 10% required at Exchange of Contracts time on the other hand.

Why why why are all those involved being negligent in explaining to FTB'ers that there are these 2 different things (both of which are called by the same name - ie "deposit")????

Lu_Lu

Can't take a loan as mortgage company may do another credit check and decline our mortgage?

No choice but to grovel to parents to see if they have any cash lying round. We don't want to lose our dream house and it's us that doesn't have the money now not them. Also I think the signed their contracts this morning so will have put the 5% deposit in there.

completion date hasn't been fully agreed yet either but that may not be until 16 October. It's our builder pushing for us to exchange early.

AdrianC

moneyistooshorttomention wrote: »

BUT the buyers are the one with the "problem" (maybe......).

Everybody in the chain has a problem in two days time, if this doesn't get sorted one way or another.

The buyer's solicitor should have picked up on this earlier.
The OP's EA should have picked up on this earlier.

I'm suspicious that this is all a load of codswallop from a buyer who CAN pay the deposit they've always known they have to pay - and are just trying to play some pathetic little game. Either that or there's quite simply a terminology confusion, and there really isn't actually any problem at all.