House move - exchange of contracts

  • Thread starter Thread starter Deleted member 11679
  • Start date Start date

Deleted member 11679

Deleted member 11679

Hello,

I know this is probably more a question for my solicitors but they're closed and I'm sure this is a situation others have been in.

We are about to exchange contracts on the sale of our home and purchase of another. We are intending to use the equity in our current home (minus the stamp duty, estate agent and solicitors fees) to provide the deposit on our new home.

I have noticed in the 'contract' we've had through which states:

"Normally you would pay a 10% deposit upon exchange of contracts. This can be less by agreement with the seller e.g 5%, or where you have a related sale and are relying on deposit monies coming from your related transaction."

So in our case we are using the deposit as equity, what is the usual course of action here then in terms of putting down a deposit? We have savings, but not enough to cover a 10% deposit on the new house.

Any advice would be hugely appreciated,

Tom
 
Thanks for the reply. By that do you mean I won't need to stump up 1000s as a deposit?
 
Normally you have to give over the deposit on exchange. so having equity is no good as that is not released to you until completion

my guess is you would need to find the deposit unless there is a way around it

unless im mistaken
 
If you cant afford 10% you will probably have to negotiate a lesser amount for all parties to put down as a deposit in the chain.
 
Your buyer should also pay a deposit, which you can forward on as your deposit (or part of) on exchange (I think). So basically you need to establish how much they're going to pay as deposit.

Also, I think the bolded bit would apply to your situation: "...This can be less by agreement with the seller e.g 5%, or where you have a related sale and are relying on deposit monies coming from your related transaction."
 
Last edited:
From my experience, when my mum and stepdad bought their new house, they intended on using the equity in the property to pay off most of the mortgage on the new property. But they had to stump up a deposit for it as the money for their house wasnt released until completion...so me and fiance had to step in to borrow them the deposit until contracts and moneys where exchanged.
 
When I sold my house and bought the next one, it was our buyers deposit which was also used as our deposit on the next house. Net result was that I didn't have to put any cash down.

If everyone had to put 10% cash down each time, no one would ever move.
 
You must log in or register to reply here.
Back
Top Bottom