Contract terms

fountainradar

Hi,

I've received the contract for the house I am buying and have a few questions.
House is freehold, no chain, vacant

My mortgage is 20-80% LTV. In the terms, I've been asked to to pay 10% of the house price to the seller as deposit when the contract is exchanged? Following that, there is a statement saying "The deposit will be held by the seller's representative as stakeholder. On completion of the purchase of the property, the deposit and any interest that has accrued on the deposit will be paid to the seller."

Is this normal?
If so, when do I pay the remaining 10%? Nothing is mentioned

Another bit says: "If completion is delayed for any reason and if notice to complete is served under condition 6.8 then the defaulting party shall upon completion (and in addition to any other sums due) pay as a result of such delay the sum of £150.00 plus VAT in respect of the other party’s solicitors costs for the preparation and service of the notice to complete and of matters incidental thereto arising from the notice or from the delay in completion."

So, if the payment transaction is delayed by the processing bank, I could be penalised?

Any terms that my solicitor should be adding for my benefit?

greatcrested

yes 10% deposit on Exchange is normal.Nothing to do with how you finance your purchse (LTV).

Yes, you are contractually bound to complete on time and legal costs on failing to do so is normal, irrespective of why you fail.

Slithery

fountainradar said:

"The deposit will be held by the seller's representative as stakeholder. On completion of the purchase of the property, the deposit and any interest that has accrued on the deposit will be paid to the seller."
Is this normal?

Yes.

If so, when do I pay the remaining 10%? Nothing is mentioned

Before completion.

greatcrested

Slithery said:

fountainradar said:

"The deposit will be held by the seller's representative as stakeholder. On completion of the purchase of the property, the deposit and any interest that has accrued on the deposit will be paid to the seller."
Is this normal?

Yes.

If so, when do I pay the remaining 10%? Nothing is mentioned

Before On completion.

transfer the balance owed to your solicitor in advance of Completion, but he only pays the seller on Completion.

eddddy

As above, 10% of the purchase price is normally 'handed over' by your solicitor on exchange of contracts - so you need to get that money over to your solicitors a few days before exchange of contracts.

Your solicitor needs the 2nd 10% of the purchase price to 'hand over' on completion day....

...BUT solicitors will often ask you to give them the 2nd 10% before exchange of contracts, because it's safer that way.

(Because if you mess up, and fail to get the 2nd 10% to your solicitor in time for completion, you might have to pay huge damages to your seller. So  your solicitor will be happier if the cash is safely in their bank account before exchange of contracts.)

fountainradar

Thank you everyone. Seems like this is business as usual.

Any terms that I should include or lookout for to safeguard myself?

shakAFC

fountainradar said:

Thank you everyone. Seems like this is business as usual.

Any terms that I should include or lookout for to safeguard myself?

I would confirm over the phone the account number. Maybe send them £10 and  confirm they received so you know you have the correct details. 

Solicitors are targeted a lot by hackers where they infiltrate their email systems and send you their details via the solicitors email.