Buying and selling - is our exchange deposit not enough? In a panic!

[rosemarycait96]

We are hoping to exchange next week on our house sale and purchase, and complete in mid-October. Chain is 4 parties, we're 2nd from the top with 2 below us.

We have just had an email from our solicitor saying "you can transfer the £24k odd that we need from you as per the draft accounts provided". Um... This is first we’ve heard of ANY money being needed from us on exchange. We hadn't received the draft accounts yet and didn't know this. We don’t have enough in the way of savings (10k in the bank), we just have our house sale, equity, etc.

We're selling for 305k, buying for 395k. Obtained a mortgage with 85% LTV.

In a total panic right now - just eaten my own bodyweight in pasta while in shock from reading the amount. We simply don't have the money and weren't told that we'd need to save up more/fork up cash on exchange. We'd ask family for money, but it's a lot of cash and my SIL with mental health problems has gone missing this week, everyone is rightly tied up with that and we're all worried. I'd hate to ask for money from family at a time like this.

I thought deposits usually just worked themselves up the chain on exchange? In that case, is it that the deposit from the chain isn't enough?

We (perhaps wrongly) were thinking all of the proceeds from our house sale + buyer's deposit would be the deposit for our purchase.

I've emailed the solicitor back asking for clarification but will be calling him in the morning to discuss. Before I ask him any stupid questions, could someone please explain how this has been worked out? Is there anything we can do at this point?

In both these issues, the key is to forgive yourself and move on

and learn from the mistake for the future surely

Well, yes. Which I suspect OP has done without it having to be pointed out to her.

Just be mindful, with the early repayment charge, some lenders charge it on settlement when porting and then refund it within 30 days of completion on your new home.

Skipton Building Society did that to us. We knew about it thankfully but just wanted to make you aware that it can work like this when porting.

Last time my solicitor did a conveyance for us ( she has done several) she told me hackers were actively faking financial emails between lawyers and their clients.

Really? Before taking on each conveyance, my lawyers have always quoted a full written list of their charges, plus all taxes and any land registry costs (with examples, when it's a percentage cost). No nasty surprises.

They have also, required the buyers lawyer to establish and confirm that the buyer has sufficient funds.

Same here

My husband, being the maths genius that I will never be, spotted that an early repayment charge of £5600 was included in our mortgage figures where it shouldn't have been - we're porting our deal across and it should never have been included in the final balance due from us.

Oh wow! Well done him.
ALWAYS worth going through ANY invoice etc line by line and doing a sanity check - we've had similar.

We had an offset mortgage once and the bank had "added" our savings balance to the mortgage debt i.e. treated it as debit instead of credit! Massive fundamental error... luckily it was so big we spotted it, although did think we were going mad.

I’m praying for you.
Well I’m not religious but I’m hoping it all goes smoothly for you next week 🤞

I wanted to come back to this thread to say that we did end up having an issue with our exchange deposit. I asked my solicitor (twice) to confirm that the deposit would pass up the chain as normal and they never got back to me one way or another about it.

Until the week we were expecting to exchange and I got a very awkward phone call saying they expected we would be required to make up the full 10% (we were in the middle of the chain). I have strong suspicions that our seller was using this as yet another delaying tactic (we had the money but not instantly accessible) and I do wonder what would have happened if we had said that we didn't have that sort of money to hand and whether they would have backed down and accepted less that 10%.

I'm pissed off about it though as, even though it should all come out in the wash when we complete, this should not have only come to light at the last minute.

Also to add - I hope everything went well for you in the end @rosemarycait96 and you are all settled and in your new home now.

Thanks for updating us. We are buying our 3rd house and don’t really remember when we paid a deposit - we must have done as FTB but when we sold our last house and bought this one I don’t remember us physically paying our any money and was all taken from the equity in the house sale - this was 19 years ago though so memory might not be good!

id read about exchange deposits being 10% and panicked because we would be short using our buyers deposit to be passed up the chain (we are only a chain of 3 - FTB purchasing our house - and vendor we are buying from us moving in with family)

I specifically asked our solicitor to clarify and she confirmed that we would not need to physically pay a deposit on exchange as our buyers deposit would move up the chain.

i hope this is the case as we have a large deposit for our mortgage but this is only available on the sale of our house.

i am hoping that the fact that our vendor isn’t buying anything means that the deposit from our buyers is used in the transactions

hope your move went well