About to exchange but.....

[Jampot]

my agent rang this morning to tell me that our buyers don't have 10% deposit! We initially accepted their offer as they were stumping up 25% deposit via a government scheme thing and are in rented accomodation. Next day we had a higher offer which we rejected so as not to mess our originals around. So, we have signed our contract, they have theirs to sign and today we find there is no deposit at all, therefore no financial committment to proceed. This means we cannot commit to a deposit for a purchase confidently. I am cross that this has just cropped up as had I realised that they were not good for their money I wouldnt have accepted their (10k lower) offer. So Im left with these choices

1. Go ahead and hope we dont get caught out after committing ourselves

1. Explain our reasons and ask them to show their 100% committment by increasing the purchase price to the higher offer (4k)

1. Re-market the property and tell the agents to qualify the purchasers before letting us go ahead.

I would continue to market until such time as they can offer you what you need.

well luckily i am a nosey devil so managed to glean from the agents where the guy works and his name so I will try to contact him tomorrow. Naturally as they introduced him i will pay their invoice (assuming he proceeds) but dont trust them to contact him on our behalf

It doesnt sound like anyone has been dishonest, just that the process involved in getting this grant wasn't understood by all parties.

I personally do not fully understand why the buyers not having money upfront is such a problem, I purchased my first home on a 100% mortgage and to avoid problems we exchanged and completed on the same day, no one further up the chain seemed to mind. I had some money to cover my legal and moving costs but i would not have had anywhere near 5% or 10% to use as a deposit. My understanding is that the funds from the mortgage company were in the solicitors holding account for a week before this occured. if they have a mortgage agreed in princile then i would say it is quite unikely for a problem to occur with the finances at a later date as I believe they do the credit checks etc before doing an agrement in principle.

All house transactions seem to be fraught with potential problems but you could have buyers who look better on paper but still pull out before or even after exchange, if this couple are first time buyers then they have that strongly in their favour.

Good luck tho, i know what its like trying to buy/sell!!

simultaneous exchange and completion would be ok but their funders want a minimum of 2 weeks between the 2 dates.

Any further developments??

no afraid not freckle. my solicitor is asking them for more deposit and is waiting to hear back from them.

the latest is they have no more money to stump up but apparently are still liable for 10% if they breach the contract. I think we may be exchanging today. THey wanted 29 Feb as a completion date but too soon considering the rental market where we want to go is non existent. Ive asked for 14 March which they are happy with (hopefully more rentals will come on in next week or so)

If they can't find the 10% now, how would they find it in the event that they can't complete and become liable to pay it?

If they are in well-paid jobs and can afford a mortgage the size you describe, I find it very hard to believe that they can't take out a short-term loan, max out a credit card or borrow from family.

I know Freckle. I asked the same question. Any additional borrowing would affect their funding it would appear. My solicitor maintains there is nothing to worry about and unless we agree then we will very likely lose the sale.

my solicitor has just telephoned after chasing theirs for exchange. The sols are not yet in receipt of cleared funds for the deposit and dont anticipate being in a position to exchange before Monday! So much for completion on 29th! (they have to leave minimum of 10 working days between exchange and completion)

So what's happening now, Jampot?

Bump.

Freckle - we exchanged and we complete next Friday

So did they come up with the full deposit in the end?? Congratulations by the way. Up to your ears in boxes now, I presume.

no they didnt but my solicitor reassured me that nothing should go wrong and it was apparent it was the agents fault that we didnt know so not the purchasers misleading us.

Yes up to my eyes ears and other parts in boxes, part packed and fully packed and we had a party for ellie last night (15 today!) with 25 teens and 10 sleeping over - (am I MAD?) However i feel I can move on now as I had tried to empty the lounge (save for sofas and tv) into the dining room which worked quite well so they partied/slept in there. Am working on bedrooms now

Good luck and, yes, complete madness to house 25 teens overnight in that chaos. Mind you, did you actually notice??