Do I have to pay deposit if paying cash from sale

Woodee

I want to purchase a house with cash from the sale of my current house. Would I be expected to pay initial deposit on house I want to buy? Thank you.

Flugelhorn

I have had to pay a deposit at exchange - I think it wsa 10% though sometimes people pay less

theartfullodger

Of course - it's an indication you are serious (otherwise you could just be making it all up..) and to get the place taken off the market:


Unless you are happy for them to get better offers & to sell to someone else??

Woodee

Thanks. Well I haven't got deposit until I sell my house, so will have to sell mine first, stay with friend and then pay deposit on house I want to buy.

19Jessie78

We was in the same position a cpl of months back, we didn!!!8217;t have to pay anything, the buyer for your house will have to put a deposit down for exchange and basically the deposit gets moved up the chain.

Cakeguts

This is a normal house sale. You aren't a cash buyer. No one has the deposit for the next house until they sell the one they already have. All that is different in your case is that you don't need to borrow money as a mortgage for the next one. At exchange the deposit is passed down the chain and that is what will happen when you exchange. You will exchange on the sale of your house at the same time as you exchange on the one you are buying. This is all normal

I think you are getting confused with a cash buyer. A cash buyer is someone who has the money to buy the house in the bank just ready to pay for the house they don't have to sell a house to get it. They already have it. In that case when they need to pay the deposit they pay it out of the cash that they are using to buy the house and pay the rest of it at completion.

Yours is just a normal situation but without you needing a mortgage to fund your next purchase.

SG27

This is a good question.

As normally the higher up the chain you go the higher the purchase price is. So you could have ftbs paying £20k, 10% deposit on a £200k flat, and two links down could be purchasing a £500k house. So to pass the ftb deposit along the chain would leave the 10% deposit on the £500k house £30k short. I assume there is agreement along the chain for a reduced deposit percentage as you get further up.

Thrugelmir

SG27 wrote: »

I assume there is agreement along the chain for a reduced deposit percentage as you get further up.

Often the difference will need to be funded.

SG27

Thrugelmir wrote: »

Often the difference will need to be funded.

Really how would you go about that? Would the solicitor draw some mortgage on exchange?

Slithery

No, if your vendor doesn't agree to a reduced deposit then you need to put up the cash.

G_M

* you exchange contracts simultaneously on the sale of your current property and the purchase of the new one.
* you buyer pays you a 10% deposit.
* you use that to pay a 10% deposit to your seller
* if the amount you receive on your sale is less than the amount required on your purchase then either


a) you make up the difference from your savings or
b) you ask your seller to accept a slightly reduced deposit - your conveyancer will arrange this unless you are doing the conveyancing yourself.

Since you appear not to understand how this works:

c) you should not be doing the conveyancig yourself AND
d) you should educate yourself on property buying. There are lots of good guides and books.


https://www.which.co.uk/money/mortgages-and-property/first-time-buyers/buying-a-home/how-to-buy-a-house-alm0r9l4yf5x


https://www.waterstones.com/book/buying-and-selling-a-home-for-dummies/melanie-bien/9780470994481