Exchange deposit

JJR45

Or exchange and complete on the same day?

btcp

GDB2222 said

Anyway, your sellers may agree to less than 10%. So, it may not be a problem. Personally, I'd be rather reluctant to accept less than 10%, but maybe I'll change my tune when I come to sell.

I am thinking that 50k or 40k would not be a huge difference, in case my buyer has less deposit. On a scale of things I am nor sure 10k difference would make them pulling out of sale, losing 40k is drastic enough. Same I would hope that my seller understands that I would not want to lose 40k and it’s enough guarantee I am complearing. 

btcp

JJR45 said:

Or exchange and complete on the same day?

Is that even possible to align several links for one day? We all have to do it the same day not only me. 

Slithery

btcp said:

JJR45 said:

Or exchange and complete on the same day?

Is that even possible to align several links for one day? We all have to do it the same day not only me. 

The majority of transactions over the last year have been same-day exchange and completion, no matter the length of the chain.

AnotherJoe

btcp said:

GDB2222 said

Anyway, your sellers may agree to less than 10%. So, it may not be a problem. Personally, I'd be rather reluctant to accept less than 10%, but maybe I'll change my tune when I come to sell.

I am thinking that 50k or 40k would not be a huge difference, in case my buyer has less deposit. On a scale of things I am nor sure 10k difference would make them pulling out of sale, losing 40k is drastic enough. Same I would hope that my seller understands that I would not want to lose 40k and it’s enough guarantee I am completing. 

The deposit is just there for easy access in case of failure to complete, it bears no relationship to to how much  can be claimed which might be much more or much less, than the 10% deposit.

If you owed £50k, say, then the fact you only handed over £40k doesn't matter, the extra £10k is still due.

JJR45

btcp said:

JJR45 said:

Or exchange and complete on the same day?

Is that even possible to align several links for one day? We all have to do it the same day not only me. 

Yes we have had a chain of 6 a few years ago that was exchange and complete on the same day.
It is stressful, but more than possible.

btcp

AnotherJoe said:p

btcp said:

GDB2222 said

Anyway, your sellers may agree to less than 10%. So, it may not be a problem. Personally, I'd be rather reluctant to accept less than 10%, but maybe I'll change my tune when I come to sell.

I am thinking that 50k or 40k would not be a huge difference, in case my buyer has less deposit. On a scale of things I am nor sure 10k difference would make them pulling out of sale, losing 40k is drastic enough. Same I would hope that my seller understands that I would not want to lose 40k and it’s enough guarantee I am completing. 

The deposit is just there for easy access in case of failure to complete, it bears no relationship to to how much  can be claimed which might be much more or much less, than the 10% deposit.

If you owed £50k, say, then the fact you only handed over £40k doesn't matter, the extra £10k is still due.

What do you mean if I owed? I understand from this thread that the amount of deposit can be negotiated, so if it was agreed at 40k then I would owe that. The rest 10k I can cover by mortgage. 

Also failure to complete looks so unlikely to me, as people are obliged to sell by the contract they exchanged. 

Am I missing something?

GDB2222

btcp said:

AnotherJoe said:p

btcp said:

GDB2222 said

Anyway, your sellers may agree to less than 10%. So, it may not be a problem. Personally, I'd be rather reluctant to accept less than 10%, but maybe I'll change my tune when I come to sell.

I am thinking that 50k or 40k would not be a huge difference, in case my buyer has less deposit. On a scale of things I am nor sure 10k difference would make them pulling out of sale, losing 40k is drastic enough. Same I would hope that my seller understands that I would not want to lose 40k and it’s enough guarantee I am completing. 

The deposit is just there for easy access in case of failure to complete, it bears no relationship to to how much  can be claimed which might be much more or much less, than the 10% deposit.

If you owed £50k, say, then the fact you only handed over £40k doesn't matter, the extra £10k is still due.

What do you mean if I owed? I understand from this thread that the amount of deposit can be negotiated, so if it was agreed at 40k then I would owe that. The rest 10k I can cover by mortgage. 

Also failure to complete looks so unlikely to me, as people are obliged to sell by the contract they exchanged. 

Am I missing something?

It's very rare for a buyer to fail to complete, but it happened to me a couple of years ago. 

Under the standard conditions of sale**, you are liable for a minimum of 10% if you fail to complete, and that's even if your deposit is a lower figure.

If your buyer fails to complete, then you won't be able to complete your purchase. You'll still be liable to pay your vendor the full 10%, even though it's not your fault. 



** You need to read and understand this document, as it's part of your contract. 
https://www.lawsociety.org.uk/en/topics/property/standard-conditions-of-sale

AnotherJoe

btcp said:

AnotherJoe said:p

btcp said:

GDB2222 said

Anyway, your sellers may agree to less than 10%. So, it may not be a problem. Personally, I'd be rather reluctant to accept less than 10%, but maybe I'll change my tune when I come to sell.

I am thinking that 50k or 40k would not be a huge difference, in case my buyer has less deposit. On a scale of things I am nor sure 10k difference would make them pulling out of sale, losing 40k is drastic enough. Same I would hope that my seller understands that I would not want to lose 40k and it’s enough guarantee I am completing. 

The deposit is just there for easy access in case of failure to complete, it bears no relationship to to how much  can be claimed which might be much more or much less, than the 10% deposit.

If you owed £50k, say, then the fact you only handed over £40k doesn't matter, the extra £10k is still due.

What do you mean if I owed? I understand from this thread that the amount of deposit can be negotiated, so if it was agreed at 40k then I would owe that. The rest 10k I can cover by mortgage. 

Also failure to complete looks so unlikely to me, as people are obliged to sell by the contract they exchanged. 

Am I missing something?

Yes. You are missing that you are liable for the costs of it falling through, and possibly also liable for 10% as a minimum even if the full10% isn't lodged with your solicitor as security, because thats all it is, lodged as security. Its not lodged as full and final liability unless the contract states that which is unlikely.  

Point being, the amount of deposit paid doesn't limit your legal liabilities. It just means that they only have some of that 10% already in their hands, so to speak,a nd need to get teh remaineder off you to make it up.Plus possibly a whole lot more.

Also, mortgage has got nothing at all to do with it you are mixing up the "holding"deposit and the deposit you pay separate from teh mortgage. Your mortgage company certainly will not be advancing you money to pay costs if you failed to complete !

Simplified example.

You agree to buy a house.

You agree you will pay a 10% 'penalty' if you fail to complete after exchanging.

Vendor asks for that 10% upfront, you say "sorry Ive only got 7%"

Vendor says "OK as aconcession I accept your 7% as enough to enable us to proceed"

Note, the contract still holds you to 10% penalty.

You fail to complete.

You need to pony up the 3% difference.

Adsta

As a FTB, I didn't realise this happened. I was wondering why the RA was so keen to know how much deposit I was putting down. Wish I knew this could have been used as a haggling tip. That said I stuck to what I was happy offering on the property I went for. 

So FTB with say 20% (or higher) would look more "desirable" if the vendor needs a bigger deposit?