Question about deposit

Redwino222

I have read on a lot of threads that exchanging contract happens before completion and at this point a 5 or 10 % deposit is paid.

i don’t remember this happening when I bought my current house.  I am Sale agreed and am using my equity as part of the sale.  I will only have access to this when my house sells Which is why the buying and selling will happen in the same day.

5% would be £15,000 - which I do have in savings, but I don’t have 10% in cash available before the sale.

does this early deposit happen in real life?  And if so why have I never heard of it?  This will be the third house that I have bought

macman

It's standard practice, because a consideration must be paid to confirm the contract. Normally 10%. You will have the deposit paid by your own purchaser available if it's simultaneous.
It's not an 'early deposit', because art exchange you have already purchased the property. You just can't occupy it.

Redwino222

So of it is 10% I have to find £30k at some point in advance of my home move?

I have heard this for new builds no it never for regular house sales.  Where does the money go?  Is it held by solicitors?  

How much in advance of moving does this happen?

Sorry, I am just surprised that no one has raised this.

AdrianC

If you're in a chain, then your buyer's deposit will normally be passed up the chain, perhaps with a "top-up", perhaps not.

You need to have any monies with your solicitor prior to exchange. Where the deposit money physically sits is not relevant - the solicitors promise to transfer it as required, whether it actually gets transferred or not.

In the current situation, many purchases exchange and complete simultaneously.

Your solicitor should explain all of this to you...

Irishpearce26

Your deposit will be passed up the chain, if its not 10% most sellers will accept lower as its quite common. Inform your conveyancer that your deposit and sale will be equity funds and they will communicate with your seller. I completed about 3 weeks ago and didn't have to pay any cash on exchange.

Redwino222

Thank you irishpeace and Adrian.

it may well be that we complete and exchange at the same time.  I will speak to my solicitor.

bex2012

I asked my solicitor this very question, as I knew the 10% of the deposit on our house wouldn't be 10% of the house we are buying, and was wondering if we needed to top it up. He said in 20 years of conveyancing, he's only known that to be required a handful of times. I wouldn't worry too much about it.

Redwino222

Thank you bex.

That makes sense.  I have never heard of anyone actually paying this - and unless you are a first time buyer I have never heard of anyone needing tens of thousands in ready cash for a house move.