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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:
Mysteryon · 14/11/2020 19:13

The source of funds checks which solicitors do are to do with money laundering.

Your buyer may have told their solicitor that the deposit was coming from a related sale, but they have to keep that to themselves unless authorised to disclose it. It’s unlikely the solicitors have done anything wrong here.

Don’t exchange with a small deposit. If your buyer fails to complete you’ll get to keep whatever deposit they give you, but you’d lose the deposit which you’ve paid to your sellers!

Original poster
Moversnotshakers · 14/11/2020 19:22

Vendors EA asked us for proof of funds but it's seems this EA didn't ask for proof of his. I'm obviously shocked at finding this out, but still not getting how her flat sale is linked to ours. He is buying in his name only, so surely he has to have the deposit ready. Her completion is supposed to be within a month. How does she know that will happen then and why doesn't mine/his solicitor know about his deposit depending on her sale ? Until yesterday blissfully unaware of anything now wondering what the hell to do

OP posts:
PresentingPercy · 14/11/2020 23:07

Yes. Solicitors here too. I guess EAs might get involved to stop time wasters but it’s always been solicitors when we have bought.

PresentingPercy · 14/11/2020 23:11

Her sale is linked because they are unmarried partners. In other words, they are individuals. She’s taking the equity out of her property for the deposit. He’s buying as a single first time buyer to get the tax relief. It’s that simple. That’s why she’s selling her flat - to get the deposit. Your house will be bought by him as a ftb. She’s not a ftb. So she will give the money from her flat to him for his deposit.

TokyoSushi · 14/11/2020 23:14

Oh OP, sounds hideous. Hope you get sorted.

MoirasRoses · 15/11/2020 07:19

Exactly what @PresentingPercy says. As horribly shit as it is OP, your buyer has linked her sale to yours. But not in chain. Just in money. They aren’t married, she’s selling her flat to release equity. That equity will be given to your buyer so he has enough money to put a deposit down on your house. He doesn’t have the deposit until she gives him some money from her sale. Essential, a gift. Why on Earth he hadn’t had to prove funds to anyone is beyond me.

It’s hideous & I feel really sorry for you but basically, he doesn’t have the money yet. You are going to have to wait for her sale, threaten to go back on the market & see if he can magic the money up (unlikely) or actually go back on the market & hope you sell quickly Sad

Original poster
Moversnotshakers · 15/11/2020 07:39

It would be quicker and easier to wait for her sale, which she reckons is a month Way from completion, than to sell again. I'm just astonished we/EA and all sols involved so far, didn't know about any of this until 4 months down the line until the point we were about to exchange. My vendors have been very understanding and said they will wait, but I'm now wanting clear and precise timelines for exchange to happen. ( And am not leaving the extra things I was going to leave in the house)!

OP posts:
MollyButton · 15/11/2020 08:36

I would go back to solicitors and ask about money laundering regulations and make sure all those checks have been done/will be done while you wait.

Bluntness100 · 15/11/2020 08:42

He must have had proof of funds when requested. So he likely borrowed and gave it back.

Them saying her flag is a month away from completion, has she even exchanged?

They should have told you this earlier. Do not exchange on less than the agreed deposit amount. I am guessing though he won’t want to exchange until he has the money and her flat sale could fall through or be delayed, or she might think better of it, whatever.

BefuddledPerson · 15/11/2020 08:48

Oooh, I'd be tempted to go back on the market in case someone else wants it and tell him to come back when in a position to buy!

But that may not be the most pragmatic thing to do Grin

What a cheeky so-and-so!

bookgirl1982 · 15/11/2020 08:52

Could you suggest he takes a personal loan for the deposit which is then repaid once her sale completes?

lyralalala · 15/11/2020 09:16

@Bluntness100

He must have had proof of funds when requested. So he likely borrowed and gave it back.

Them saying her flag is a month away from completion, has she even exchanged?

They should have told you this earlier. Do not exchange on less than the agreed deposit amount. I am guessing though he won’t want to exchange until he has the money and her flat sale could fall through or be delayed, or she might think better of it, whatever.

Or spent it like my MiL’s buyer did

People are bloody stupid sometimes.

lyralalala · 15/11/2020 09:17

I’d want to know now if his mortgage company know his deposit is coming from the GF

The might be nervous about that as it could give her a financial investment in the house despite not being on the mortgage

Bluntness100 · 15/11/2020 09:18

Yes that’s true Lyra.

lolabears · 15/11/2020 09:23

@lyralalala she would need to sign the money over to him as a gift. Doesn't sound great to me.

lboogy · 15/11/2020 09:33

Interesting. The estate agent for the house I'm selling hasn't asked for proof of deposit. I'm selling to the deposit is the difference between the sale and mortgage price. I only told the EA what my deposit is and provided proof of how much I could borrow from a mortgage broker.

Sorry you're going through this OP. Nightmare scenario all round

user1471530109 · 15/11/2020 09:37

Hi OP. Same thing happened to me a few years ago, found out the week we thought we were going to exchange that the FTB deposit was being gifted to them from the sale of her parents flat.

It took weeks for the flat to finally be sold. They had expected it to be done and dusted weeks beforehand but the buyer if the flat was in no hurry at all.
It did work out in the end. But I was going in to rented as my purchase had fallen through so didn't have other parties to keep happy. Incredibly stressful time but it did all work out in the end. Fingers crossed for you!

Original poster
Moversnotshakers · 15/11/2020 09:47

Hopefully the solicitors can come up wirh a solution tomorrow. Best case scenario he borrows an amount for deposit and we all complete as planned then we move as planned. Don't care what happens to them tbh. It's took all my strength not to say anything to them, to make them aware how terrible this is to do this. EA & Sols will hopefully sort soon. To make matters worse I can't use my phone at work, so all coms will be on breaks/lunch etc.

OP posts:
mumsy27 · 16/11/2020 00:59

@MollyButton

I would go back to solicitors and ask about money laundering regulations and make sure all those checks have been done/will be done while you wait.
don't start dictating to your solicitor how they go about doing their work. it is for buyer's solicitor to check the provenance of the funds not yours.

buyer's solicitor doesn't have to share information where the money is coming from to the seller.
once the property is sold they need to provide evidence of the deposit.
the failure here rests on the EA not checking a proof of funds, or EA knew all along, hoping the sale of GF flat goes through before the exchange.

user1471538283 · 16/11/2020 08:30

I would insist that he finds the money in a day or you go back on the market. I've always had to provide proof of funds to buy a house so it should never have gone this far. I know you are in bits and I would be too. It's so annoying as you either have the money or you dont

Comefromaway · 16/11/2020 08:36

Both our estate agents (the one we bought through and the one we sold through) and our solicitor asked for proof of funds from everyone. The estate agent was concerned with proving that buyers were in a position to proceed, the solicitor was to do with money laundering.

I can't believe your estate agent was that negligent as to allow a sale to get this far. Ours would not even allow the offer to be put in officially until we could prove the deposit was there and available.

I'd be seething OP. You need a new buyer. (and a new estate agent)

Comefromaway · 16/11/2020 08:38

@murmurgam

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.

I had to provide bank and ISA statements to the estate agents we bought off.
RainingBatsAndFrogs · 16/11/2020 09:03

If he borrows for the deposit, will he still get a mortgage?

It will be incredibly risky for you to exchange on a lower deposit or before her flat sale has exchanged because if they renege (easier for them to do in a lowered deposit) you will also be forced to fail to complete, and will lose the deposit on your purchase.

FWIW I wouldn’t have told your vendors until you had more details from your EA / solicitor this morning.

Has she exchanged? What is the completion date? I bet they thought they could use the deposit money as soon as they had exchanged.

RainingBatsAndFrogs · 16/11/2020 09:04

Anyway, I would put your property back on the market and line up viewings / potential new buyers in case it goes pear shaped.

PresentingPercy · 16/11/2020 09:07

We sold a house to give Dd a deposit for her flat. We sold after she agreed to buy her fiat. We were clear about what we were doing with our solicitor. We were held up a bit with the completion of the sale due to a leasehold garage issue. It took 6 weeks longer than it should have done. However it completed and we then sought exchange of contracts on DDs flat - mid Feb. Except their solicitor then stalled. We tried to get completion for end of March. We eventually exchanged and still didn’t complete until mid May. Vendor was already living with his girlfriend and we had to wait for her sale and then them finding a house to buy! Who knew? We were told he wasn’t buying anywhere! Just staying with her. People are just tricky.

If buyers borrow for a deposit, lenders can pull out. They don’t like what is, in effect, a 100 per cent loan. We took out a loan for her flat but when DD got her own mortgage recently she was asked where her deposit came from and had we loaned it to her? Is she repaying us? How much and on what terms? The money was given so no issue but it’s nervous times out there.

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