Deposit on exchange of contracts

[Mendi]

Humour me [never bought in a chain before]. If you have no savings and all your money is tied up in the house you're selling, what do you do about the deposit on exchange of contracts?

you have a problem, I'm afraid. Speak to your solicitor.

You can't exchange till you have the deposit money - that's why chains can be such a nightmare - everything has to happen simultaneously

Can you exchange and complete on the same day we did that when we got a 97% mortgage

My solicitor told me you either exchange and complete on same day, or you offer a small deposit as a token. With my last house we did the former, no hassle.

Our deposit came from the deposit paid to us by our buyers. We were buying a chain free house. We were liable for 10% deposit if we had not completed, but the amount of cash actually transferred on exchange day was probably only about 7%. We would just have had to find the other 3% if we had pulled out. This is fairly normal practice from what my solicitor said.

So there are options - either exchange/complete on the same day (I did that for my first purchase) or speak to your solicitor - it may all be fine....just the first time buyers deposit passed up the chain as cold hard cash, although the liability is (generally) 10% for all.

Thanks all. Looks as though exchange/complete on same day is likely to be only option unless we go into rented.

Seriously though. I am looking at a house around £350k in Surrey. Who the hell just happens to have £35k savings on top of the equity in their home?? Surely not everyone is a banker on massive bonuses?

You tend to rely on your buyer, in practice it's not always possible to put down 10%, most parties will understand this though.

What usually happens between exchange and completion anyway? How likely is it to be able to do both on one day?

We exchanged and completed on the same day when we bought our house and again when we sold it. It was really stressful both times, when we were buying the sellers were divorced and the man refused to go to sign the contracts until the day of exchange, the solicitors couldn't contact him, it was a nightmare.

It's usually the buyers at the bottom of the chain who pass their deposit up. I was confused, but my solicitors assured me it was entirely normal. Don't worry, speak to your solicitor.

Definitely speak to your solicitor. Mine is utterly nonplussed by it. No talk of going into rented or anything. There was no hassle at all with my last house.

We've always just used the deposit from the people below us - the money goes up the chain.

If you can't do that because their deposit isn't enough to cover yours then get a bridging loan for a month to tide you over until completion (then draw down on the funds from your sale to cover the loan). It might cost you about £1k to loan £35k for a month, but should still be cheaper and less stressful than renting.

This happens all the time, it's normal and your solicitor should be able to advise you.