Mortgages - Moving Home

[Mark_Solesbury]

Help!

Im really confused now...

Ive just sold my house. And bought another one. There is a chain.

Ive got a letter from the solicitor saying that i need to pay a 10% deposit on the new house.

I have no means to fund this at all, as everything is tied up in my current house.

I also understand that i will receive a deposit from the sale of my house, but as the new one is 50 grand more expensive, there will be a difference in deposit we receive, to the one we have to pay.

Where the hell does this come from? Am i just supposed to magic it out the thin air?


Anyone help clear this up for me?

[Skibum346]

I'm no expert but if your talking about the vendor requiring a 10% deposit that should have been made clear prior to the purchase being agreed. If your lawyer didn't make that clear at the time, I'd say you've got a case against him, or at very least against the vendor for not making it clear. Talk to your bank, citizens advice or the mortgage advice centre.

Skibum

[V8MoneyPit]

I suspect the vendor has had people pull out of the sale previously and they want a deposit to ensure the sale this time. However, I find it hard to believe many people would be in a position to stump up 10% in advance. Maybe you could negotiate a smaller amount?

[Smego]

It is normal to negotiate this deposit OR sign a contract that you will pay a virtual deposit, IE if you pull out after exchanging contracts you are libel to pay the 10%  (5% is more normal these days. if that happens they will have to sue you for the money.

another option is to exchange and complete at the same time.

Ask your estate agent and solicitor for advise, some times it is necessary to remind both that they are working for YOU!!!


Good Luck.

[SteveGoodz]

I suspect the vendor has had people pull out of the sale previously and they want a deposit to ensure the sale this time. However, I find it hard to believe many people would be in a position to stump up 10% in advance. Maybe you could negotiate a smaller amount?

We asked for and received a 10% deposit when we sold our previous house last year. I refused to pay one on the property we wanted to purchase and the vendor waived it because he just wanted to sell ~ house had been on the market for some time :lol:

Receiving a deposit for your old house doesn't help with the deposit for the new one as you're not allowed to touch the one you receive until the move is completed, or falls through.

[freelanderpx54]

When we moved we had an absolute nightmare. We raised the deposit via a buy to let mortgage (old house was virtually paid for) so that we could guarantee getting the new house. We thought that we wouldn't have a problem selling the old house and went through with the new mortgage and moved.  We ended up selling the old house to one of those companies that advertise in the free papers, you know the sort, we will buy your house. We had big problems with them but eventually the sale went through.

The buy to let option is cheaper than a bridging loan especially if you choose a lender that doesn't charge a redemption fee. We used the Chelsea Building Society for the buy to let and Northern Rock for the new mortgage

[Range Rover Blues]

Crikey, I've not heard of that one before, paying a deposit :shock:

It's a buyer's market, go and find yourself another house and tell him to stuff it ;)  If you had that kind of money kicking about you wouldn't have a mortgage would you :?

[Boggert]

I would say No they can get the money when the chain goes through like everyone else.

When I was a surveyor I worked in agency and have never has anyone ask for a deposit. I would not pay anything to the solicitor or agent. Just say all you moeny is tied up in the house.

Any deposit should be paid by the Solicitor on exchange and before completion and not before the exchange.

[Buddha]

I moved house a year ago, and recall there being something like this which I queried with my solicitor - it was all a bit of a non issue really.

I believe it all depends on the equity that you have in the house you are selling. If there is sufficient funds that will be raised by the proceeds from the sale of your house that you will be left with at least the 10% deposit, then there should be no need for you to find this money in advance of completion. However, if that is not the case, then as a first time buyer would be expected to pay a deposit, then so would you need to cover the deposit.

But as others have said, speak to your solicitor.

[LiftedDisco]

Sorry to say, but strictly speaking, the 10% deposit thing goes through the chain...

Given that you have moving costs, stamp duty to pay, solicitor's bills and all the other stuff, the generally accepted view is that it now costs the wrong side of £10k simply to move.

When we moved the first time, we negotiated a deposit of 5% when agreeing the purchase cost of the house that we were moving into and the solicitor agreed that this was largely a 'paper' transaction on exchange.  There is a risk that it might all go Pete Tong after exchange but this is usually accepted by all involved.

Our last move was rather more difficult - we wanted the house (as in would not, could not walk away from it) and the vendor insisted on 10% deposit.  Ultimately, it all comes out level...

Best of luck

[muddyjames]

I am confused big time!

If you would like a financial advisor to talk to I can extremely highly recommend a guy who doesnt charge anything if he has been recomended by a friend.

He has just found me a great deal as my fixed term mortgage is ending in the next month or 2. He has also told me just how soon I will have the mortgage paid off if I keep going as I am. I worked it out to be longer :shock: :lol:

Great guy who talks English, not goobledegook. He did all my house buying mortgage stuff 2 years ago for me and my house insurance the last 2 years as well.

If you want his number pm me.

[Smego]

Don't pay anyone, just use a mortgage advisor it is illealal for them to change you a penny!

[Mad Martin the 1st]

i work for a coneyancing solicitors (i am a case manager) and we do get this sort of thing all the time, a deposit is something that you just agree to, say on paper but when exchange goes through that is the old way of paying the deposit to all parties. but nowadays people will agree either a 5 or 10% deposit and this is paid on the day of completion as not many people have this sort of money to pay before they get the sales proceeds through. this should not cause an issue to anyone involved and your solicitor should have negotiatied this for you on your behalf to prevent any problems.
once exchange has taken place then the chain is legally binded to sell and buy and if someone pulls out then that person is liable to pay the deposit and possibly costs to the other party depending on the situation.  if all falls through then your solicitors bill has to be paid for the work that they have carried out on the current transaction but in some cases if you buy another house they will add this bill on to the next bill for you if you are using them for the next ourchase.
you really need to speak to your solicitors about this as you are paying them to sort this out for you but i am happy to give you any more advice if i can

thanks
Gill

Mad martins wife

[Mark_Solesbury]

thanks everyone.

it does seem that the deposit we get for ours will be passed on to our vendor, so we dont in theory have anything to worry about :)