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10% deposit at exchange, Is this common practice?

(15 Posts)
paintinglady Sat 11-Jul-15 07:50:11

We have bought twice , we were not asked for a deposit at the exchange of contract of either property. But the last time we bought was 2007 , is it common practice to ask for a deposit now ? . Obviously this is difficult if you are selling and buying at the same time , as the money is tied up in the first house .

RoganJosh Sat 11-Jul-15 07:55:44

Common IME. You'll get your buyer's 10% at the same time which helps.

LIZS Sat 11-Jul-15 07:56:04

Yes but normally this is done virtually, from the equity in the revised property rather than hard cash.

ReallyNotAMorningPerson Sat 11-Jul-15 07:56:51

Watching with interest as we're also in the process of buying a house (me for the first time), and I'd read this somewhere and was concerned. We definitely don't have a spare 10% lying around until we sell our house!

ReallyNotAMorningPerson Sat 11-Jul-15 07:57:27

Oh okay....that sounds better!

ThroughThickAndThin01 Sat 11-Jul-15 07:58:25

Very very unusual not to pay a deposit on exchange. I've never heard of not paying a deposit. I certainly wouldn't exchange my house sale without one.

Normally 10% but sometimes can be negotiated down.

fairgroundsnack Sat 11-Jul-15 07:59:15

Completely normal although you can sometimes negotiate it down to 5%. If you are in a chain the deposit can effectively move up so that there isn't a load of extra money swilling around.

paintinglady Sat 11-Jul-15 07:59:19

Ok thanks , that makes sense . I was worried we would have to find the cash .

ChazzerChaser Sat 11-Jul-15 08:03:09

Unless there was some sleight of hand with solicitors/mortgages I didn't know about we didn't do this nor were asked to. Only 2 years ago. We didn't have any buyers so can't have been money from them. We weren't asked for any cash.

Sunnyshores Sat 11-Jul-15 08:23:07

It always happens - but when everyone in a chain has a mortgage and equity in their selling home, its not usually even discussed, it just happens.

Trapper Sat 11-Jul-15 08:55:13

Perfectly normal. You lose your deposit of you do not complete. As other posters have said, you can negotiate the amount. We agreed 5% for our first home.

CrispyFB Sat 11-Jul-15 11:03:34

I've completed and exchanged on the same day with my first two purchases (FTB) to avoid this issue, as both mortgages were 100%. That was years ago though back when you could get 100% mortgages!

More recently I was a FTB yet again (don't ask, long boring story!) and of course these days you don't get 100% mortgages. We were getting a 95% one though, and it was no trouble at all to get them to accept 5%, in fact nobody involved batted an eyelid and it seems perfectly common.

CointreauVersial Sat 11-Jul-15 23:03:36

You only need to put a cash deposit in if you are a first time buyer.

Otherwise it generally comes out of the equity in the house you are selling.

paintinglady Sat 11-Jul-15 23:18:58

It obviously is common practice , i just wonder why we were never asked for cash . The first time we bought it was with a 100% mortgage , and that was in Scotland , so things may be different there . The second time was in England and we weren't in a chain , we had already sold our previous property and were living in rented accommodation . But we weren't asked for a deposit that time either . I will clarify with the solicitor , thanks for all the replies

HereIAm20 Sun 12-Jul-15 18:25:28

Yes - there has always been a requirement for a 10% deposit although in practice if this is going to be in cash it is often negotiated down to 5% (but you'd still remain liabale for a full 10% if the matter were not to complete and that was down to your decision not to proceed. In reality the deposit at the bottom of the chain is passed up the chain (sometimes with top ups).

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