5% deposit - seller not aware?

Bumblebee2128

So we exchanged contracts today, then the seller contacts me to let me know the deposit is short as he was expecting 10%?
We are first time buyers and have not been told by our solicitors or mortgage broker that we needed sellers permission for a 5% mortgage.
If he is not happy with a 5% deposit where do we stand?

PField

You have exchanged contracts already, so it does not matter any more.

ThePants999

There are two kinds of deposit.

Your mortgage deposit is the amount you're contributing to the purchase, where the mortgage lender provides the rest.

The standard house purchase contract, though, specifies that the buyer pays 10% to the seller on exchange. You're now liable to the seller for 10% of the purchase price if you pull out. Usually, this whole 10% is actually paid on exchange, but if the mortgage deposit is <10%, it's standard to negotiate that you pay less than 10% on exchange.

However:
- even if you negotiate less than 10%, you're still liable for the whole 10% if you pull out
- your solicitor was supposed to actually agree this with their solicitor in advance!

Bumblebee2128

Thank you both. My solicitor never mentioned we needed to agree anything and until not everything has been smooth sailing. I'm now worried that he will pull out as he is not happy. We complete in two weeks so he wouldn't be waiting a long time for the rest. Does the deposit go straight to the seller or is it the solicitors who hold it until completion?

Cheeky_Monkey

Your solicitor will hold your deposit until completion.

What did your contract say about the amount of deposit payable on exchange?

davidmcn

If you've actually exchanged then I suspect all that has happened is your seller doesn't understand what's going on. They should speak to their solicitor rather than directly to you.

Bumblebee2128

The contract does say 'a deposit, usually of 10%' but the solicitors knew it was a 95% mortgage and never said a thing.

Fiesto88

Bumblebee2128 wrote: »

Thank you both. My solicitor never mentioned we needed to agree anything and until not everything has been smooth sailing. I'm now worried that he will pull out as he is not happy. We complete in two weeks so he wouldn't be waiting a long time for the rest. Does the deposit go straight to the seller or is it the solicitors who hold it until completion?

As you've exchanged contracts, the seller is legally committed to complete the transaction, so you don't need to worry about pull out. He's probably just read everything over and got a shock thinking something's wrong. It's for his solicitor to placate him.

Although, if he's in a chain, it may mean when your deposit has passed down, he doesn't have the amount he thought he would and needs to transfer funds to make up the balance. I'm not sure what happens in chains when there's a <10% deposit involved. But I can't imagine his solicitor wouldn't have discussed that issue with him in advance of exchange.

DoaM

Bumblebee2128 wrote: »

I'm now worried that he will pull out as he is not happy.

Surely you'd only be liable for the deposit amount if YOU pulled out? If they pull out you have no liability - in fact you may even have a claim for costs?

davidmcn

Bumblebee2128 wrote: »

The contract does say 'a deposit, usually of 10%'

Are you sure you're looking at the contract? I would expect it to state the actual amount you've agreed.

Bumblebee2128

Seller is not buying another property so all is ok there. It's not really the money that worts me it's the thought of losing the house as we love it and wouldn't find one like it in our area for years as they never come up often. I'd be heartbroken as would my children. &#55357;&#56852;