Buyers' buyers wants simultaneous exch / comp

MrBrindle

AdrianC wrote: »

Ah, the perennial confusion over the two meanings of the word "deposit"...

At exchange, there's a security deposit - typically 10% - paid to show the buyer's commitment to the deal.

The mortgage "deposit" is the buyer's equity in the purchase, the amount they aren't borrowing.

Can they use that equity as exchange deposit though? If it's enough?

Eg; 140k house, buyer has 10% deposit = £14k. Can't that be used when exchanging?

ashe

If that is the issue, then as long as everyone agrees I believe a lower deposit % can be negotiated. You are still legally on the hook for the full 10% but just a 5% deposit is used. This is a problem for many people in chains that are using a HTB ISA as the bonus cant be used for this deposit.

AnotherJoe

MrBrindle wrote: »

Is that appropriate now? When I contacted them a few weeks ago asking for update on situations they told me to ask the solicitors as they would be handling everything now.

My partner has told me to leave it for the time being and stop nagging everyone!

"Squeakiest wheel gets the grease"

So by all means be a pain and nag or you'll end up with soemthing you dont want.

No harm at all in saying "our mortgage co says it cant be done" which them makes it more of a fait accompli, they cant use logic or pressure on you to work around that. I would never do a same day and advise you dont, there are just too many potential issues. Push back. (aka nag)

AdrianC

MrBrindle wrote: »

Can they use that equity as exchange deposit though? If it's enough?

Eg; 140k house, buyer has 10% deposit = £14k. Can't that be used when exchanging?

Yes, of course.

p00hsticks

MrBrindle wrote: »

Possible. What would be the answer to this? To just exch/com on same day or lower deposit throughout the chain.

Also, wouldn't the 10% deposit come from their mortgage deposit? That's me assuming they have a decent deposit on their mortgage.

If it's the reason, then yes, it's possible if all parties in the chain agree to take a smaller deposit on exchange. Although I think that it's often taking 10% from the person at the bottom of the chain and simply let the same amount move up the chain at exchange.

As you say, it's the FTB who's actually most likely to have the cash available, although they may not realise they need it at exchange rather than completion if they aren't on the same day. And if they're relying on a HTB ISA bonus they may not be able to get their hands on the money.

It often those further up the chain who are upsizing that struggle to find the cash - the 10% they get from selling is less than the 10% deposit for the property they are buying, and the proceeds of their house sale and new mortgage funds aren't available until competion.

Aspiration

A friend of mine had this. Packed up her house, two kids and then the buyer wanted to come and look at the house and negotiate the price down in day of exchange and completion.

Luckily she had already instructed her solicitor to exchange previously so they went ahead and there was no problems.

AnotherJoe

The lucky thing was that the buyer hadn't put a hold on via his solicitor.
But yes, that's one of the many things that can happen with a same day and a very good reason for not accepting it.