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deposit at contract exchange

(10 Posts)
notarehearsal Mon 14-Dec-15 16:52:05

Feel a little foolish even asking this and could pick up phone to solicitor but thought I'd try here first. Anyway, if it's agreed that, e.g., a 10% deposit is given at time that contracts are exchanged, do I actually have to hand over that money? I'm selling and buying so there will be the deposit from the buyer of my house I'm assuming. So ...can this be used as my deposit or does it not work like that? Believe it or not this is the fourth house Ive sold but haven't for so long Ive totally forgotten everything! Having read this back it sounds jumbled so the house I'm selling is, e.g., 500,000. The house I'm buying is 400,000. The buyer of mine will put down 50,000 deposit. I would be liable for putting down 40,000 deposit. Can the 50,000 be used for my deposit or do I physically have to ensure I can get £40,000 at time of exchange? If so where does this money usually come from? I think I recall many moons ago having something called a bridging loan for a week or so? This time I won't have a mortgage so couldn't go to a building society. Anyone know please?

pilates Mon 14-Dec-15 17:07:22

Yes you can use the deposit from the sale for your purchase but drop an e-mail to your Solicitor for confirmation.

notarehearsal Mon 14-Dec-15 17:10:26

And another question then. So if I used my buyers deposit as my deposit and I dropped out of the sale between exchange and completion, how would that work please?

notarehearsal Mon 14-Dec-15 17:11:07

And sorry pilates forgot to say thanks for responding

LIZS Mon 14-Dec-15 17:15:42

You'd still be liable for any difference between the cascaded cash deposit and 10% if you exchanged but did not complete.

pilates Mon 14-Dec-15 17:16:59

I imagine you would have to stump up £40,000 plus interest and the deposit you used would go back to your Buyer. Hopefully, someone will come along and confirm as not 100%.

notarehearsal Tue 15-Dec-15 09:37:12

Thnaks for the comments. Anyone else got any?

Moving15 Tue 15-Dec-15 13:06:26

The deposit is more a liability rather than an actual amount passing into the account of the seller at the end of the chain. While the deposit that is stumped up by the FtB at the bottom of the chain will have to be cash, it is normal for most people's deposit to be tied up in the equity of the property they are selling. If you drop out then your buyers get their deposit back and you become liable for the full deposit of the property you are buying. Solicitors hold all the cash along the way, deposits, mortgage funds etc, so it is not possible for anyone to do a runner with deposits along the way.

iwillbemrsminty Tue 15-Dec-15 13:14:12

I am a legal cashier in a solicitors office.. Upon agreement with the vendor's solicitors, a deposit can be "held to order" (held by purchaser's solicitors until the completion date). Otherwise a deposit will be paid to the other side upon exchange of contracts. The balance purchase monies will then be transferred on the completion date. If deposit monies are "held to order" the full purchase price will be transferred on the day of completion. If the deposit is "held to order" this will be stated on contract documentation under the Formula used alongside the balance to be transferred to the vendors solicitors on the completion date. The completion date is not fixed until exchange of contracts has taken place.

notarehearsal Tue 15-Dec-15 15:26:47

That's so helpful thanks so much.

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