My property chain collapsed... help please

1886travel

We are looking to move into a new built house which will complete in May this year. Our buyer was happy to buy our flat in December (We didn't ask him for any deposit to secure). However his buyer suddenly pulled out at the bottom of this chain. Although our buyer said he's still interested in our flat and looking for new buyers himself, I'm still a bit worried that he can't sell his house. We haven't signed the exchange contract with our buyer. We've transferred the 10% deposit to our solicitor at the beginning of January though.  I've got a few questions and hope if any of you can help.

1. Am I supposed to ask for a small amount of deposit to reserve our flat although this person said he will buy it? 
2. We've paid the 10% deposit for the new built house. Is it possible to have 10% deposit back since we won't be able to afford the new house if we don't sell our flat? 
3. Would it be good looking for a new buyer for ourself although I feel bad to put our flat on the market again since we've accepted this guy's offer. He's still looking for a new buyer though. Also it's very difficult to sell a flat at the moment.... I don't know what I should do honestly...

Thanks

Doozergirl

You should put your property on the market as you can't assume that your buyer will
sell quickly.   It isn't normal to take a deposit from your buyer until you exchange contracts.  

Leading on from that, when you say you've paid the 10% deposit to the developer it begs the question of whether you have already exchanged contracts with them??   Normally this is done simultaneously across the chain. 

eddddy

1886travel said:

1. Am I supposed to ask for deposit to reserve our flat although this person said he will buy it? 

It would be called a 'pre-contract deposit' - and it's very rare to have one. It's because it's so difficult to agree the terms, and decide whose fault it is if a sale falls through.  You might spend weeks arguing about this.

So it's generally easier not to have a deposit.

1886travel said:

2. We've paid the 10% deposit for the new built house. Is it possible to have 10% deposit back since we won't be able to afford the new house if we don't sell our flat? 

Have you exchanged contracts for purchasing your new build house? It sounds like you haven't.

If you haven't exchanged contracts, your solicitor will be safely holding your 10% deposit - and you can get it back from them

1886travel said:

3. Would it be good looking for a new buyer for ourself although I feel bad to put our flat on the market again since we've accepted this guy's offer. He's still looking for a new buyer though. Also it's very difficult to sell a flat at the moment.... I don't know what I should do honestly...

Ask you estate agent what the market is like at the moment.

One option is to put it back on the market, and see which of these happens first...
- You get a new buyer for your flat
- Your current buyer gets a new buyer for their flat

If you decide to do that, it would be fair to tell your buyer what you're doing.

1886travel

Doozergirl said:

You should put your property on the market as you can't assume that your buyer will
sell quickly.   It isn't normal to take a deposit from your buyer until you exchange contracts.  

Leading on from that, when you say you've paid the 10% deposit to the developer it begs the question of whether you have already exchanged contracts with them??   Normally this is done simultaneously across the chain. 

Thanks Doozegirl,

I don't think we've signed the exchanged contracts for the new house.

1886travel

eddddy said:

1886travel said:

1. Am I supposed to ask for deposit to reserve our flat although this person said he will buy it? 

It would be called a 'pre-contract deposit' - and it's very rare to have one. It's because it's so difficult to agree the terms, and decide whose fault it is if a sale falls through.  You might spend weeks arguing about this.

So it's generally easier not to have a deposit.

1886travel said:

2. We've paid the 10% deposit for the new built house. Is it possible to have 10% deposit back since we won't be able to afford the new house if we don't sell our flat? 

Have you exchanged contracts for purchasing your new build house? It sounds like you haven't.

If you haven't exchanged contracts, your solicitor will be safely holding your 10% deposit - and you can get it back from them

1886travel said:

3. Would it be good looking for a new buyer for ourself although I feel bad to put our flat on the market again since we've accepted this guy's offer. He's still looking for a new buyer though. Also it's very difficult to sell a flat at the moment.... I don't know what I should do honestly...

Ask you estate agent what the market is like at the moment.

One option is to put it back on the market, and see which of these happens first...
- You get a new buyer for your flat
- Your current buyer gets a new buyer for their flat

If you decide to do that, it would be fair to tell your buyer what you're doing.

Thanks so much for your help and it totally makes sense! 

Mahsroh

Firstly, the chain hasn't "collapsed" (yet). It's a "bit dizzy and unsteady under foot" but it's still salvageable.

Explain to your buyer that as you've found your onward purchase you need to put your house back on the market but explain that they still have first refusal so if they find a buyer first before you, then you can still proceed as planned. Then to get the chain back on track again between you you need to find a buyer for one of two properties, which hopefully in the current market should be doable quite quickly. Your buyer is more invested now too so likely to accept a lower offer on their property that they would've done prior to finding their onward purchase (although they may be held back by affordability). 

Check with your solicitor to just check about your purchase. I'm almost certain that they wouldn't have exchanged (they can't do this without your authority anyway) so there is no risk and as others have said they'll be holding on to the funds until you are in a position to exchange. The only thing i'm slightly confused by is why the funds have already been sent to the solicitor as early as the beginning of January when you were seemingly still some way away from exchange?