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Original poster

Exchange- money to pay??

11 replies

Silentelf · 19/06/2018 19:25

Just opened up an email from my solicitor- our seller wants to exchange at end of this month. Small chain - just us and our buyer and I think all ready to go so fine by us (offer accepted end of March so been plodding in a while). Is there money to pay on exchange?? I last bought 10 years ago and can’t remember! Our deposit is coming from equity in current house we are selling so not much free cash. Thanks

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xyzandabc · 19/06/2018 19:34

I'm confused, you say it's just you and your buyer in a chain. But then you mention your seller. Are you just selling, in which case you have nothing to pay on exchange. Or are you buying as well, so there are 3 of you in the chain, not just 2?

If the latter, then it's usual that the monies received from your buyer will be passed up the chain as your deposit to your seller.

Assuming you're all buying a more expensive property, then that deposit will not actually cover the 10% (or other agreed amount) required.

So either your solicitor will have already agreed with seller to pay a reduced deposit amount.

Or your seller will accept the deposit amount from your buyer but on the understanding that should you fail to complete, you will still be liable for the remainder of the 10% (or other agreed amount).

Generally you will not be expected to stump up tens of thousands in cash on exchange day. This is all assuming you are in England. Other rules/laws will apply elsewhere.

ThroughThickAndThin01 · 19/06/2018 19:37

You need to pay 10% (can be negotiated down) of the purchase price. You can normally use your buyers deposit as part of yours, I’m fairly sure.

Katff · 19/06/2018 20:12

We are in the same situation as you. Our buyer’s 10% was moved up the chain for our onward purchase and it made approx 7.5% deposit for our purchase. I would explain to the solicitor that is what you are intending to do so that he can confirm that the seller is happy with that arrangement (ours was happy to take slightly less than 10% deposit)

Original poster
Silentelf · 19/06/2018 20:16

Thanks both- sorry I wasn’t clear. We are selling to first time buyers and buying from a seller with no chain above them. I have no idea what our buyers deposit is, possibly worth 10% of the place we’re buying. Maybe that’s why I’m not aware of how much needed or if our solicitor has negotiated. Will check with solicitor tomorrow, but looks like no need to panic, thanks

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Original poster
Silentelf · 19/06/2018 20:17

Thanks katff

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Katff · 19/06/2018 21:35

We are in exactly the same situation as we have a FTB buying our place and then no onward chain on the one we are buying. Usually the FTB at the bottom puts down a 10% deposit on exchange then gives the balance (could be more savings plus mortgage or just mortgage) on completion. Just make sure your solicitor is aware that your full deposit is coming from your sale And it will be passed up the chain accordingly. If your vendors have an issue with a slightly less deposit then you have the choice of either adding the remainder as cash or short term bridging loan. I think I’m practice it’s unlike that there will be an issue for the slightly less deposit to be passed up the chain unless there is a massive difference in amounts. For us, we were £15k short on exchange but our vendor was fine with this as we would still be liable for 10% if something were to go wrong between exchange and completion.

hiddenmnetter · 20/06/2018 08:15

Then based on your second post when it comes time to exchange your buyers (bottom of the chain) will put a 10% deposit down on exchange. Your lawyer will have already asked (and it is standard practice) for your vendor to accept that deposit as their deposit. End result is that on exchange you won’t require any liquidity.

LegoBitcho · 20/06/2018 08:25

We had to insist on full 10% deposit at exchange as dh will be handing in his notice and it will be a disaster if the sale falls through after this.

We are a tiny chain but hadn't thought about it going up the chain.

hiddenmnetter · 20/06/2018 08:47

Sorry to clarify what Lego said. Your deposit is still 10%- but your lawyer accepts the deposit handed by your buyer. If the sale falls through you’re still liable for the 10%.

thinkfast · 20/06/2018 08:55

If the sale falls through you could be liable for more than just the 10%.

Your solicitor should be explaining all of this to you

Original poster
Silentelf · 21/06/2018 22:18

Just to update- our buyers deposit is indeed moving up the chain for exchange. Thanks for the reassurance!

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