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Original poster

Buyer doesnt have deposit. Help!

108 replies

Moversnotshakers · 14/11/2020 02:52

Hope someone can help as I need advice. We are at the exchange stage of house buying and sellingI have been told today that our 'first time buyer' doesn't have deposit funds as he is waiting on funds from the sale of his partners flat. House sale is in his name only and any flat she owns shouldn't come into it surely? Estate agent said they know nothing of another property to sell and are desperately trying to speak to his solicitor etc. Where do I stand? My vendor and us are all set to exchange and we thought our buyer was too, now it seems he lied. How did he get mortgage offer without proof of funds? I'm lost for words and totally gutted and can't sleep for worrying. This flat is allegedly four weeks away from completion so do I have to wait it out or can I insist he exchanges asap and has to' borrow' the deposit?

OP posts:
chukwe · 14/11/2020 08:42

The same thing happened to us in July this year as our buyer did not have the deposit to exchanged.

So we had to do exchange and completion on the same day as their banker gave them 100% mortgage on our property.

It all went at last but I couldn't sleep for weeks prior to the completion

PatsyJStone · 14/11/2020 09:35

It’s a stamp duty/First time buyer fiddle. They’ve not had to factor in his partners sale because officially it’s nothing to do with the property chain, even though it is providing the deposit. If it is a substantial amount he won’t easily just get a loan to cover it.

Unfortunately you only need something like this to happen once and then you are well equipped in any further house moves to know what to ask in future. I’ve been in mortgages, selling and buying nearly ten houses and still on my last purchase had a close call.
I’d place an expectation and demand on the completion of his partners property taking place by a given date. He needs to insist his partners solicitors work to ensure you get your sale in four weeks.

Give an ultimatum. You could say if not you will withdraw, and even if this prolongs your move you won’t be held to ransom by the sale of her property to facilitate what will be a fiddle on finances because it is extremely likely she is going to move in!

lyralalala · 14/11/2020 10:30

He may have had the deposit when he got the mortgage.

The sale of MIL's house just fell through because the guy spent his deposit over the last few months expecting an inheritance to be sorted by the time of exchange. It wasn't and he wasn't able to borrow or find the deposit elsewhere.

WombatChocolate · 14/11/2020 10:40

Op, did the EA do thorough checks on his financial position.....deposit in place (evidenced...not just his word for it) and mortgage in principle, followed by mortgage offer?

Sometimes people can provide these proofs but although the money is there to be seen, it isn’t actually available to sound for all kinds of reasons and sometimes people have done lots of complex moving around of funds to provide evidence and are relying on further money coming from somewhere as what they have shown is already spoken for for other purposes.

I think you need to get total clarity via EA and solicitor. Often the EA can be useful in these situations as they can deal direct with the buyer when your solicitor can’t. Establish exactly what they have and haven’t got and the timescales and how much uncertainty there is or scope for funds to fall through. If you threaten to return to market and look serious, some funding might appear. Sometimes it does when people are threatened with losing a property, but sometimes they have just ballsed up or lied and nothing can be done in a shortish timeframe.

You might have to go back on the market. This will be annoying but until exchange they have committed to nothing and it’s just one of those annoying things. If you have to start again make sure the EA sees actual evidence of deposit (bank statements etc).

Hoppinggreen · 14/11/2020 10:45

Where the deposit is coming from is irrelevant, he doesn’t have it and I don’t think you can rely on him being given it by his GF as she doesn’t have it either.
Unfortunately I think you have to proceed as if you didn’t have a buyer, because in effect you dont

murmurgam · 14/11/2020 10:54

We got our mortgage offer with no proof of funds, EA had never asked either. I remember it surprised me at the time.

We actually exchanged without anyone checking we had the funds to complete the sale (exchanged with 10% but deposit was 20% in total)

Original poster
Moversnotshakers · 14/11/2020 11:30

Thanks for all the replies. Until I get more answers from sols and EA I'm kind of in limbo. I have told my vendors and luckily they have been understanding but want a definite timeline to complete.The EA ( which is same one as ours) didn't ask for proof of funds apparently. My vendors sol asked me for proof( which is from sale of my house). Still can't understand how a fTB can say his deposit depends on sale of GF flat. How did his solicitor not flag this up unless they don't realise either as she is dealing with another solicitors in the meantime

OP posts:
Magstermay · 14/11/2020 11:38

That sounds pretty shit!
When we exchanged on our last sale the buyers didn’t have the full deposit amount as it was being funded by their sale BUT they had enough to put down to cover costs etc if they were to pull out after exchange. The solicitor discussed it with us and advised that was ok. Do they have any amount to put down as deposit at all?

Original poster
Moversnotshakers · 14/11/2020 11:46

I honestly don't know. Didn't even know there was another property to sell until yesterday Just assumed normal FTB with deposit saved/gifted. Then 4 months down the line when me and vendor and our sols pushing for exchange, it has all came out!

OP posts:
FlanBake · 14/11/2020 11:50

Sale shouldn't have been agreed let alone get to exchange without proof of funds, what on earth are your solicitors doing?

BernadetteRostankowskiWolowitz · 14/11/2020 11:52

I'd be foaming at the EA here. When we offered on our house (we were also selling one), the EA wouldn't take it off the market or cancel viewings til we high tailed it to their office with copies of all our proofs.

Ismellphantoms · 14/11/2020 12:07

Buyers lie. I sold to a couple that said they were downsizing and were cash buyers. I looked up the house they were selling and it was huge with acres of land. They had sold and needed to be in our house on a specific date, which was a short period of time. We put all our belongings into storage and moved into a friend's house as a temporary measure as we couldn't move into the one we hoped to buy. On the exchange/completion day they announced that they hadn't applied for a mortgage yet! It took another four weeks for them to get the loan and complete. I've recently found out that they also bought a property in London which explains why they were not the cash buyers they said. I'll never believe a purchaser again as I'm sure you won't OP.

PastMyBestBeforeDate · 14/11/2020 12:24

How much are you paying your EA? Given this is their mistake I would see if they would waive their fee to reduce the deposit the buyer needs. If it all goes through and you aren't out of pocket then you would pay their bill.
I have had an EA offer to do this to complete a chain so it isn't an impossible idea.

DelphiniumBlue · 14/11/2020 12:36

That's really annoying.
If it were me, I'd be instructing your solicitor to email formally on Monday asking the buyer's solicitor to explain where the deposit is coming from, when it can be expected to be in place, and , if, as you have now been lead to believe, it is coming from a 3rd party, has that 3rd party signed all the necessary documentation?
It's possible that the solicitors didn't know, and they need to be aware, for example, anyone who will be living at the house ( the buyer's partner?) will need to sign additional mortgage papers.
Your solicitor should explain that you you now require absolute transparency, and full details by return, as you feel you have been misled as to the buyer's ability to proceed. The letter should include the timescales you have in mind and a request for confirmation as to whether the the buyer anticipates being able to comply with that timescale.
Meanwhile, I'd instruct the agent to remarket on Tuesday if you haven't received a detailed and satisfactory explanation by close of business on Monday.

Original poster
Moversnotshakers · 14/11/2020 13:04

Thanks delphinium. I have said more of less exactly those words to my solicitor, with timescales for answers and completion. Thanks for all your advice, here's hoping it's gets sorted quickly.

OP posts:
amiw · 14/11/2020 13:17

@FlanBake its not the sellers lawyers job to check the buyers funding. Buyers lawyers, buyers lender and broker and the EA. No ftb scheme presently in play would benefit this buyer that they could also not receive with a non ftb buying with them. It could make a difference SD wise if the gf owns multiple other properties.

WombatChocolate · 14/11/2020 14:41

It is usually the EA who does the first checking of funds. They should ask the person making an offer to bring in bank statements to show the deposit funding and a mortgage offer in principle.

If I were selling, I would have been asking the EA if they had seen these before removing property from market.

The EA should do this,but like everything with house buying and selling you really do have to follow up and make sure everything has been done and leave nothing to chance. Assume nothing.

Salome61 · 14/11/2020 17:48

So very, very sorry to read this, the process is far too stressful and I hope someone soon starts changing the UK process. Take care of yourself, sending you positive thoughts it will come right.

I had a cash buyer who was being very elusive but my EA was onto him ducking and diving and hotly pursued him ... turns out his ex wife in Sweden had the cash, he was never going to get any of it. I was so angry, I'd sold everything for peanuts to get rid of it all as people said it would be such a quick sale.

PresentingPercy · 14/11/2020 18:12

You said on page 1 that the girlfriend had sold her flat. That doesn’t necessarily mean completed with the money in the bank. If it was mentioned at viewing, I would have followed this up because they appeared to be a couple. People lie. Are you sure they have a mortgage? 90% mortgages are like hens teeth now so do you know what size deposit they need?

He’s entitled to buy a place on his own. It’s not a scam. She can find him money. I expect it would move to joint ownership fairly soon after completion. No big deal on that. However their solicitor hasn’t asked for the deposit details soon enough and they might have lied to the mortgage company. Seems like a total nightmare and I think you have to ascertain if her flat is nearing completion on the sale. Has she exchanged? If not, market it.

PresentingPercy · 14/11/2020 18:13

find .... give him money

Dogdaysarehere · 14/11/2020 18:31

I would be raging at the estate agent here and expect some sort of compensation or reduction on my bill. We are currently selling and buying and all viewers had to submit proof of funds before they could even book a viewing. Similarly we had to send proof of funds ranging from bank statements to memorandums of sale and redemption statements from the property we are selling, with funds from savings being traced back 6 months before they would take the property off the market. I can’t believe you have got this far.

AcornAutumn · 14/11/2020 18:43

I haven’t done this for years but I thought it was the solicitors on both sides who had to get proof of funds?

I hate our house buying system. Everything crossed for you OP.

lolabears · 14/11/2020 18:51

I agree that this is on the EA. We're buying at the moment and as with all previous purchases sent over proof of id along with proof of funds before it was marks as SSTC.
I'd be giving the estate agent a grilling over what it is they have seen - if a bank statement did it definitely have his name at the top. You need to establish if he's lied to them and they've not spotted it or if he did have the money but has spent it elsewhere as it was never destined for you house (not EA fault).

murmurgam · 14/11/2020 18:57

Despite my comment earlier, I'd never expect an EA to check proof of funds, an Agreement in Principle maybe but not bank statements for the deposit, I'd expect the buyer's solicitor to do that side of it plus money laundering checks etc.

Our house was marked as SSTC as soon as they received instruction from our solicitor.

SilkieRabbits · 14/11/2020 19:00

We had to show proof of funds to EA when we bought and I would expect EA to do checks.