Conveyancing and fees...

RJUK

Really? I don't recall that from buying our last house. I'm not sure where they expect people to get 10% of their new home's value from without having completed the sale of their old house and thus having access to that money...

SmlSave

It's a standard question just like Kyresa said. The standard reply is your deposit.

As you are selling and buying you don't (normally) actually transfer the money to the solicitors before exchange.

We used to act for David Wilson in our town, we didn't pay to get their business just built up a good relationship with the onsite staff. I mention this as my friends chose a cheaper firm over us to save money; as the cheaper firm had never dealt wit David Wilson before they ended up delaying the purchase and causing my friends stress as they filled in some of the paperwork incorrectly, it was a HTB so even more complicated.

RJUK

Thanks SmlSave. The thing is that until we complete (and full money is exchanged for the houses) I won't have 10% of the cost of our new house. I need the equity from our current property, or the mortgage to pay for it. I don't have multiple tens of thousands of pounds just lying around. If I had that amount of money, chances are that I'd have paid it off of my existing mortgage (as we have done recently).

Speaking to friends and family none of them have given any money at exchange of contracts either, and money has always been exchanged at completion.

SmlSave

That's because you are selling and buying RJUK. Your deposit comes from the sale.

Write "funds from sale" on the how much money we can put down at exchange of contracts question and that covers it. (unless you are selling for 80k and buying at 500k of course)

RJUK

Ah OK, but they don't expect me to actually have that money available at the time of exchange of contracts?

MrJB

As you're buying a new build, are you exchanging on your existing house at the same time? Are you buying your new build with a mortgage? if so I assume the practical completion will be no more than 6 months after the date of exchange?

You will need to have exchanged on your existing house to be able to use any of that equity for the new purchase. If you've not exchanged you will need to find cash money to exchange - they maybe prepared to accept less than normal.

RJUK

As it stands, they are pushing us to exchange ASAP, but the house is currently no more than a foundation and won't be ready any earlier than the end of October. (November seems most likely.)

With regards to our existing property, our buyers are looking to be in around mid July, so the exchange will be happening pretty soon - but we're moving up in terms of value of the house, so 10% of our existing house price won't cover 10% of the new house price.

Of course, we'll have the full equity from our house a good 4 months before the new house is ready, which will cover the deposit on the new house multiple times over, but it's likely that DWH will want us to exchange with them long before we complete on the sale of our existing property. (I doubt they will wait until July.)

*Edit* Sorry, yes we're buying the new property with a mortgage, but with the build of our new house unlikely to be finished before November, we can't apply until at least next month, although we already have the mortgage in principal.

SmlSave

So, just to confirm that you are moving into rented/with family?

RJUK

Yes, we know that we can't expect anybody to wait until November for us to move, so are moving in with family, probably for about 4 months before the new house will be finished.

SmlSave

I would point out that it is very early to start thinking of exchange dates now as no one is able to say when exchange will be, the best you can do is guestimate.

Best thing to do it instruct your solicitors and get the ball rolling. Once the mortgage offers and local land searches are in then it's the time to discuss exchange and money.

Best case scenario would be to exchange on both properties close together with the sale deposit being held with your solicitor to fund your purchase deposit. But not 'tying' the two transactions together so that the completion dates are separate.