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    • fleetingmind
    • By fleetingmind 13th Oct 18, 9:30 PM
    • 406Posts
    • 58Thanks
    fleetingmind
    Exchange Deposit Help!
    • #1
    • 13th Oct 18, 9:30 PM
    Exchange Deposit Help! 13th Oct 18 at 9:30 PM
    We're due to exchange hopefully on Monday. A friend asked if we had already paid the exchange deposit.

    I said no, as the money for the house is 3/4 equity in my current house and the rest is an already agreed mortgage. So no cash deposit.

    He said I still needed to pay a exchange deposit in case I pull out after exchange.

    Now this is all news to me and 10% of house is over 50k and 10% of mortgage is over 14k. No one has told me about this.

    Please help and put my mind at ease! Thank you.
Page 1
    • eddddy
    • By eddddy 13th Oct 18, 9:40 PM
    • 7,237 Posts
    • 7,184 Thanks
    eddddy
    • #2
    • 13th Oct 18, 9:40 PM
    • #2
    • 13th Oct 18, 9:40 PM
    The person buying your current house will be paying a deposit for your house...

    ... and that deposit will be used by your solicitor as the deposit for the house you are buying.

    That may be less than 10% of the price of the house you are buying, but the solicitors have probably agreed that is ok.

    So you probably don't have to find any more cash at this stage.
    Last edited by eddddy; 13-10-2018 at 9:42 PM.
    • fleetingmind
    • By fleetingmind 13th Oct 18, 10:33 PM
    • 406 Posts
    • 58 Thanks
    fleetingmind
    • #3
    • 13th Oct 18, 10:33 PM
    • #3
    • 13th Oct 18, 10:33 PM
    The person buying your current house will be paying a deposit for your house...

    ... and that deposit will be used by your solicitor as the deposit for the house you are buying.

    That may be less than 10% of the price of the house you are buying, but the solicitors have probably agreed that is ok.

    So you probably don't have to find any more cash at this stage.
    Originally posted by eddddy
    Our buyers are also paying for our house with money from the sale of their house but will be getting a deposit from their buyer. The initial deposit if it gets passed up won't come near the 10% I'd need.
    • Thrugelmir
    • By Thrugelmir 13th Oct 18, 11:15 PM
    • 61,269 Posts
    • 54,505 Thanks
    Thrugelmir
    • #4
    • 13th Oct 18, 11:15 PM
    • #4
    • 13th Oct 18, 11:15 PM
    Our buyers are also paying for our house with money from the sale of their house but will be getting a deposit from their buyer. The initial deposit if it gets passed up won't come near the 10% I'd need.
    Originally posted by fleetingmind
    Then you need to speak to your solicitor. As they'll need to confirm that your vendor will accept a lower amount than 10%.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • da_rule
    • By da_rule 13th Oct 18, 11:23 PM
    • 2,848 Posts
    • 2,486 Thanks
    da_rule
    • #5
    • 13th Oct 18, 11:23 PM
    • #5
    • 13th Oct 18, 11:23 PM
    I would hope that the solicitors have already sorted this out. There are 2 main options:

    1) Your seller has agreed to accept your buyers deposit as your deposit even though it is for less than 10%; or
    2) Your solicitor has agreed (for you) to provide a 10% deposit but that the deposit is held to order, essentially meaning that it only gets paid on completion or if the contract is breached.

    If they have gone for the second option then they really should have told you as it would potentially make you liable to pay the deposit at a future date. This may of course be in the event of the transaction falling through, in which case you might not have the cash to pay it.
    • Tom99
    • By Tom99 14th Oct 18, 3:29 AM
    • 3,086 Posts
    • 2,141 Thanks
    Tom99
    • #6
    • 14th Oct 18, 3:29 AM
    • #6
    • 14th Oct 18, 3:29 AM
    2) Your solicitor has agreed (for you) to provide a 10% deposit but that the deposit is held to order, essentially meaning that it only gets paid on completion or if the contract is breached.
    Originally posted by da_rule

    If that was the case the OP would have paid the 10% to the solicitor which they have not done.
    • bigstevex
    • By bigstevex 14th Oct 18, 2:09 PM
    • 824 Posts
    • 379 Thanks
    bigstevex
    • #7
    • 14th Oct 18, 2:09 PM
    • #7
    • 14th Oct 18, 2:09 PM
    On exchange day, the money from the first time buyer or cash buyer at the bottom gets passed up the chain... So on a 100K house lets say 10% (as 10% is usually what solicitors ask for) - 10K... this is usually passed up the chain to the last person who could be buying a 500K house. This is where solicitors have to agree because obviously 10% of 500K is 50K and the 10K wouldn't be enough, it's not a problem, it just has to be agreed by the chain. Other option is to exchange/complete on the same day, this isn't an issue at all then.
    • fleetingmind
    • By fleetingmind 17th Oct 18, 5:08 PM
    • 406 Posts
    • 58 Thanks
    fleetingmind
    • #8
    • 17th Oct 18, 5:08 PM
    • #8
    • 17th Oct 18, 5:08 PM
    So finally exchanged yesterday. I spoke to my solicitor and she confirmed what a lot have said on here. She said it passed up the chain and would be in contact if more was needed. Which was a slight shock as we were due to exchange that day and 20k-30k is not easy to get hold of.
    There was no more mention of the exchange deposit after that. So either the other parties weren't fussed or there was enough from the bottom to pass up the chain.

    Was surprised you had to have home insurance for the new house on exchange - I thought I'd just need it for day of completion onwards. MoreThan said they couldn't do it as I wasn't the legal owner yet so had to get a policy saying I lived there! Not sure if you can get special insurance but I was in a rush.

    Relieved for it to be (almost) over.!Appreciate all of the help.!Thank you.
    • Thrugelmir
    • By Thrugelmir 17th Oct 18, 5:15 PM
    • 61,269 Posts
    • 54,505 Thanks
    Thrugelmir
    • #9
    • 17th Oct 18, 5:15 PM
    • #9
    • 17th Oct 18, 5:15 PM
    Was surprised you had to have home insurance for the new house on exchange - I thought I'd just need it for day of completion onwards.
    Originally posted by fleetingmind
    From exchange you are committed to buy. Even if the property burns to the ground prior to completion.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
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