Help - exchanging contracts today and suddenly our buyer hasn't the full deposit!

[LondonBetti]

That's it really - all set to exchange contracts on our house today after months of delay by the buyer. Solicitor has just called saying the buyer doesn't have the 10% as agreed but can deposit 6%. Anyone know if this is actually an issue?

Thanks for the help!

like they didn't know this beforehand....

see what your solicitor advises - they are paid to know this and are liable if they get it wrong. And the deposit should have been with the other solicitor before today!

And have a plan B even if it goes through in case of a failed completion.

How did they not know that? Surely they have a mortgage agreement requiring the 10%?

Do they have a current mortgage offer for the full difference , or access to cash to make it up. Once you've exchanged it makes no odds to you as they are committed to paying the stated amount but their solicitor should not proceed unless he/she knows they can pay it on completion. Are you relying on that 10% for your purchase deposit ?

Excuse me if I'm being dim, but if they have a 90% mortgage and a 6% deposit they are 4% short.

So, if the Buyer can find the other 4% before completion day you are OK. If not, the sale won't happen. Surely?

If the mortgage company have offered at 90%, they are unlikely to change that offer to 94% nowadays I would have thought.

What kind of money are we talking about? £4k, £8k, £10k?

They will be using equity from their current property to fund the difference I assume, but don't necessarily have that amount in cash.

And, yes, it matters if you need the full 10% to put towards your own deposit in order to exchange tomorrow too. Unless you have the difference available.

Ah, OK, that would make sense Selling, I was thinking along the lines of a FTB.

This is fairly common lots of people's money is tied up in their house, not cash in the bank.

It's not a problem as long as everyone in chain accepts the position. The problem would only be if they default and don't complete, you could in theory sue for the balance.

It is usually the FTB at the start of the chain who pays the 10% deposit. After that money is usually tied up in the house and so the 10% deposit is worth less than that to the houses further up the chain but this is usually ok, because all monies will be paid on completion. If, however, someone pulls out between exchange and completion, then the full 10% will be expected and there is a risk of being sued, but this rarely happens!

We had to show our morgage brokers our mortgage comapy and our lawyers that we had the deposits

So something dodgy is going on

Thanks all for the replies; we're fine if the only real impact is needing the difference for a deposit ourselves (we don't as will move in with family, likely to be many future threads on that! ). Agree that it's a bit dodge at this late stage but I guess we get to keep their deposit if they walk away so unlikely to happen.

Will double check with solicitor in the morning and just go ahead then!

Big thanks again

This just happened to us. Our solicitor came up with a fantastic solution.

There is an insurance policy you can take out which covers you for the deposit should the sale not go through to completion. Unfortunately, your buyers have to sign the insurance document - which they may not be willing to do as it makes them liable for the deposit should the sale not complete. However, if they're asking you to reduce the deposit to 6% they should be willing to sign the insurance policy which makes up the other 4% if things go wrong.

As your solicitor to find this insurance. It'll give you the security you need to exchange.

this worries me right now. i have 10k and need 15 i havent yet got to the exchange bit,family were meant to be helping me out but i am uncertain if this will happen now :( worrying im gunna do all this for nothing. i can save more but i just have to try and stall.