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

(15 Posts)
TexMex Wed 22-Jan-14 18:25:52

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 Wed 22-Jan-14 18:30:02

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 Wed 22-Jan-14 18:30:08

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 Wed 22-Jan-14 18:30:47

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

littleredsquirrel Wed 22-Jan-14 18:30:56

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

TexMex Wed 22-Jan-14 18:32:13

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 Wed 22-Jan-14 18:34:37

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?

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 Wed 22-Jan-14 18:35:08

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

ThunderboltKid Wed 22-Jan-14 18:35:09

Usually you would exchange both properties on the same day. So your solicitor gets the deposit from your buyers which it then passes on to your vendor. If you are topping up the deposit then you would need to pay it out of your own funds.

ThunderboltKid Wed 22-Jan-14 18:35:53

X-post with everyone else!

Bowlersarm Wed 22-Jan-14 18:36:06

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 Wed 22-Jan-14 18:43:45

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 Wed 22-Jan-14 18:49:00

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

TexMex Wed 22-Jan-14 18:50:43

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

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