10% Deposit at exchange of contracts.

Daveinlincoln

How do I sort this one out?
I'm selling my house for £330k
Buying my house for £227k
I owe £100k on my mortgage.

The plan was/is to sell my current house,buy the next and be mortgage free...i.e use the funds from the sale of my to buy the new house outright.

But I see in my solicitors letter that at exchange i'm expected to give 10% of the purchase price at exchange in case i pull out.

How do I do that?...I don't have 22.7k sitting in the bank.
Any advice?

JJR45

It will be from the 10% your buyer has to pay.

Slithery

The £33k deposit that you receive from your buyers will pay for it.

anselld

Your buyers pay you 10% - £33k and you pass £22.7k on to your vendors.  Or rather the Solicitors will sort it all out.

MaryNB

Your buyer's deposit will be passed up the chain. That £33k will more than cover your 10% on the house.

If your buyer isn't at the bottom of the chain, they may be relying on their buyer. If your buyer is seller their house say for example £200k, then their buyer will be putting £20k down which will be passed up. Either your buyer adds £13k to it to make up the 10% (£33k) or you accept a 6% deposit that you will pass to your seller and they accept a deposit that is just 8.8% of the house they are selling. If they don't agree to accept <10% you'll have to make up the short fall. I'm not sure but I believe if you fail to exchange you'll still owe 10% even if you've only paid a deposit less than that. 

Daveinlincoln

Thanks guys....that has set my worrying mind to rest.
I guess i could have googled that but I get much quicker responses here.
Thanks again to you all for taking the time to respond.

Mickey666

There's no legal requirement for a 10% deposit, it's just a convention, so try negotiating a lower deposit. 

I've never paid a 10% deposit when buying a house.