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House buying deposit 10%????
singingauditor
Posts: 3 Newbie
hi
my buyers have stated that they can only pay a 1% deposit on exchange of contract. This seems low as the norm is 10%.
If something goes wrong after exchange i understand that the buyer is still liable to pay 10% to me, however this may not be easy to get. Not sure but just thinking worst case senario - presumably i would have to sue him for the full 10% and that is never garaunteed.
i understand there is an insurance policy that can be bought called a deposit garauntee scheme. This apparently covers me for full 10% if the buyer pulls out after exchange of contract.
grateful if anyone knows of these polices and whether they can offer any other advice on this. We just want to be cautious. As we are in a chain we would be liable to the loss of our 10% deposit.
thanks in advance
my buyers have stated that they can only pay a 1% deposit on exchange of contract. This seems low as the norm is 10%.
If something goes wrong after exchange i understand that the buyer is still liable to pay 10% to me, however this may not be easy to get. Not sure but just thinking worst case senario - presumably i would have to sue him for the full 10% and that is never garaunteed.
i understand there is an insurance policy that can be bought called a deposit garauntee scheme. This apparently covers me for full 10% if the buyer pulls out after exchange of contract.
grateful if anyone knows of these polices and whether they can offer any other advice on this. We just want to be cautious. As we are in a chain we would be liable to the loss of our 10% deposit.
thanks in advance
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Comments
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Who says the norm is 10%?poppy100
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When we bought our first house (25 years ago) with 100% mortgage we had to pay for the insurance mentioned on exchange. I think you should stipulate that you will only accept a 1% deposit on exchange if your buyers purchase the insurance (i.e. you don't have to find the money for this)! Good luck“A journey is best measured in friends, not in miles.”
(Tim Cahill)0 -
How much will you owe the EA and solicitor once completion has occurred? That should be the absolute minimum deposit? So long as you don't complete on the other property until yours has completed, then you aren't going to lose your own 10%. Though what idiot thinks that they can afford to buy a house if they have NO Money?Mortgage started on 22.5.09 : £129,600Overpayments to date: £3000June grocery challenge: 400/6000
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This is why people exchange and complete on the same day sometimes. If you have exchanged with a tiny deposit on your sale your buyer disappears you can sue him for the balance of the 10%. Not much help if you can't find him to enforce the judgement. Your seller on the other hand could sue you for the balance of your 10% deposit and he can find you and he can register a charging order against your property so you are in a more vulnerable position.
A deposit guarantee policy for £10,000 deposit would cost £250 from one leading company. It is a question of whether you buyer would be prepared to find this kind of extra money to enable an exchange to take place with more security for you.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0 -
You got to have a decent deposit to buy a house. It has been all this loose lending with out deposits that has led to this huge housing bubble.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
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