Has anyone had to put a deposit down on exchange when buying and selling?

[TexMex]

Ian due to exchange on our new house and sell our current house - we have the mortgage offer but we are also paying some money out of savings towards new house.

The solicitor has asked for this money now prior to exchange, which I wasn't expecting, as I thought you paid all money on completion when they sale/purchase goes through. Has anyone else been in this position?

[Bowlersarm]

You always have to pay a deposit on the house you are buying on exchange. Usually 10% of purchase price, can be negotiated down to 5%.

[LIZS]

You do normally have to advance some money, but that could come from the equity in your current home "on paper" rather than additional funds.

[TexMex]

Is that usually money or if you're selling is it a deposit on paper?

[littleredsquirrel]

Unless you do simultaneous exchange and completion than this is completely normal.

[TexMex]

What I mean is if you were selling and buying for the same price would you still have to pay a deposit on exchange and then get that back on completion? Sorry of I'm getting it all wrong!

[littleredsquirrel]

You don't get it back, you just pay the excess on completion. If you don't have a deposit at all because you are buying and selling for the same money then you should have told your solicitor you need simultaneous exchange and completion. What about the money you have put aside for fees, searches and stamp duty?

[ATruthUniversallyAcknowledged]

I didn't have to do this either time I've bought and sold. All money just changed hands on completion. There was a stipulation that if the buyer pulled out after exhange they would owe the seller 10% of the value.

[TexMex]

Ah people posted faster than I can type! I think my question is answered; last time I bough and sold exchange and completion were within a day of each other so it all happened at once.

As there will be equity in my house when it's sold I'm not sure why I'd have to stump up the extra cash on exchange then, I had planned on completion (makes a difference as likely to be a large gap between the two!) Will speak to sols tomorrow about it! Thanks all

[Bowlersarm]

Say you are buying at £100,000. On exchange of contracts you pay 10% therefore £10,000 to your solicitor which is held until you complete when that sum plus your additional £90,000 is forwarded to your vendor.

If you pull out of the purchase between exchange and completion you forfeit that £10,000.

Make sense?

[TexMex]

Yes that does make sense thanks. As there will be over 10% "profit" from selling mine (and both are being exchanged on same day) then I can assume the deposit can be on paper and I can pay the cold hard cash on completion when the funds from the mortgage will also be released then.

[Bowlersarm]

Tex, just make sure your solicitor knows you intend using your buyers deposit as your deposit. But yes, that sounds fine.

[TexMex]

Thanks Bowlers. It's hard to spit my words out and get what I mean across!