Question about 10% deposit at exchange

[Frazzled2207]

We are hoping to exchange on a house purchase (and sale) next week. Quite a long complicated chain.

We have just had a letter confirming that we need to come up with 10% cash on exchange. This is first we’ve heard and we’ve never been asked for proof of this. We don’t have any cash we just have a house to sell which is selling for about two thirds of the cost of the new house, plus a mortgage for the last third.

In a panic now. Do deposits work themselves up the chain? In which case the people below us are selling a house at a higher value than the one we are buying so I suppose there is a chance their 10% deposit once it gets to the sellers solicitor it could be enough? Perhaps that is why it hasn’t come up before?

At no point has anyone asked us for proof of cash for the deposit. I naively thought our house sale would basically be the deposit. Can someone explain how it works, thanks.

Ps obviously we have emailed solicitor back to clarify.

@Dougieowner sounds good! Yes I agree I’m sure your solicitor could have sorted it if need be!

@Frazzled2207
Have you sorted this yet? We're in the exact same scenario and I'm freaking out a bit.

We've been told that we can expect our buyers to push 10% of their purchase up the chain towards our deposit but that leaves £11k for us to find. Did you end up having to source the deposit yourself?
(for note, figures are: £240k sale and we're purchasing a £350k house so our buyers will provide £24k deposit towards our £35k deposit leaving £11k for us to find.

You have to top it up to 10% (or agreed amount) unless agreed otherwise that a lesser amount is acceptable.

So if you don’t have a lesser amount agreed in advance the rest is expected at exchange. Many solicitors require proof of funds before proceeding for this reason.

If you read the whole thread you will see that in many cases it is only the first time buyer who has to find 10% deposit.
If concerned about it you need to check with your solicitor but I’m sure they will reassure you

i moved last year - I certainly did not have 10% of the value sitting in cash and didn’t need a deposit. My solicitor sorted it all out - the first time buyers buying my house I assume has a cash deposit which worked up the chain.

I saw some text about deposits etc but no one ever asked me for cash. I funded the purchase through equity and a mortgage.

Hi! We moved in March. I checked this with our solicitor and it was all taken care of automatically - the bottom of the chain paid the full deposit and it was passed up the chain without being asked for more.
Hopefully the same for you - I think it’s very normal for this to be the case!
We we’re never even asked if we had the funds to top up the deposit!
Good luck with the move I’m sure it will be fine 😊

Hi. No in the end we didn’t need to find more money. Deposit came up the chain and was far less than 10% of our purchase. Our vendors were happy to agree with a smaller deposit which was lucky.

ask your solicitor to check with the vendor’s solicitor if they are ok with a smaller deposit or not. I don’t think it will make any meaningful difference as the solicitor holds onto the money until completion anyway. And legally you’re liable to pay the balance in the hopefully unlikely scenario that you pull out after exchange. I would have thought most vendors will agree.