house buyer offering less than 5% deposit

GDB2222

EasyLay said:

First of all many thanks for all the responses.

Our buyer has instructed us that they can't bring their deposit from 3.75% up to 5% as "he did not advise the estate agent that he would be able to provide a 5% deposit at the beginning of the process", which to me does not seem to be a satisfactory reason but there we are. So we're going to ask our sellers if they will accept a 5% deposit from us, and also ask if we can have a relatively quick exchange to completion time of a week. The other alternative is to exchange/complete on the same day. I've read a lot of conflicting stories about this online with regard to the risk involved and how often it can go wrong. Does anyone know what the pros/cons of this might be?

Thanks in advance

If your buyer cannot complete you are in real trouble. I’d exchange and complete on the same day. That more or less rules out the issue, and a bit of risk in organising removals in advance without a signed contract is neither here nor there.

I would be asking for proof that your buyer has the required deposit plus a firm mortgage. Otherwise, I’d be pulling out whilst I still have this hirt on my back.

AskAsk

EasyLay said:

First of all many thanks for all the responses.

Our buyer has instructed us that they can't bring their deposit from 3.75% up to 5% as "he did not advise the estate agent that he would be able to provide a 5% deposit at the beginning of the process", which to me does not seem to be a satisfactory reason but there we are. So we're going to ask our sellers if they will accept a 5% deposit from us, and also ask if we can have a relatively quick exchange to completion time of a week. The other alternative is to exchange/complete on the same day. I've read a lot of conflicting stories about this online with regard to the risk involved and how often it can go wrong. Does anyone know what the pros/cons of this might be?

Thanks in advance

so did you find out if the buyer is going to get a 96.25% mortgage and if so, has he already got the mortgage approval?  if he only had 3.75% deposit and he told the estate agent this when he offered on the house, then the agent should have told you.  the estate agent should do due diligence on the buyer but they don't always do and can pass real duffers to you as prospective buyers.

Crashy_Time

Duffers, LOL, basically the OP is going to have to drop their price or find another buyer. Very few people will be getting 95% mortgages now IMO.

Navigaor31

Atlas234 said:

The buyers may have something like help to buy Isa's with the 25% bonuses making it up to 5% total for the mortgage deposit and as you can't get the bonus until everything completes they wouldn't have it for exchange. But it does seem very strange given that I don't think 5% mortgages are even available at the moment? 

This is what I was thinking. If they have nagged a 5% mortgage then this makes sense. 
I will be offering a 9% exchange deposit (if we don't complete same day).  For this reason.

Whilst I have the extra money available to top it up. I would rather have that extra cash in hand now. Even though the bonus would pay off a bit of the mortgage. 

I would suspect this is the case.  You need to find out why they are offering this really. Then push for exchange/completion same day if you can.