need some advice -- on a house move

[eddy no1]

what it is is ...
my house went up for sale and was snapped up by some first time buyers in 3 days all good so far - so we went house hunting and found one all good- start the 'process with solicitors' mortgage all sorted both ways all fine and dandy - ''but'' the buyer for my pad are getting 100% mortgage inc fees so no deposit ,which leads me to my problem if they have no deposit to pass through how sound are these people ? is this common ? and my solicitor is saying we may have to exchange and complete on same day ?? sounds abit funky to me ?? am i just being over cautious or is there real cause for concern here ?

thanks for any input im really grateful

to verifi the chain

first timers (100%'s) ---> us ----->empty house (no onward chain)
also (if helps)the couple have signed all paper work , had a mortgage in principle agreed its at the point of awaiting their mortgage offer to arrive with our solicitor --

and the last thing is if the guy were buying off may want a deposit should we pay him or is it to risky ?

again thanks

[mjn]

If they're getting a 100% mortgage, more than likely, they have no cash in the bank. But i don't see why this should be a problem to you.

[eddy no1]

it the lack of deposit -- the people can just walk away , ive got fees and such to pay out and could loose them through no fault of my own - a deposit would just make it more secure

[mjn]

I should imagine that the bank will pay the deposit? I'm not up with how 100% mortgages work.

[dng007]

Hi Eddy,

Funnily enough, we're in exactly the same situation, and in fact I posted on it a couple of days ago.

Firstly, get your solicitor to confirm their deposit amount - since they will no doubt have to pay some stamp duty, they ought to at least be able to put down that, at least making a minimal deposit.

Next, your solicitor can write to your buyers solicitor, to confirm that they too, are happy with whatever deposit your buyers come up with. Now if they don't put down any deposit at all (or a very low one), it is feasible that your sellers might ask for you to still put down a deposit of up to 10%.

Of course once you complete, you get all your deposit back. But I guess your worried (as was I), about the small chance that your buyers pull out after exchange.. and if they have no deposit - what have they got to loose, whereas you with your large(r) deposit stand to loose more..

....However in reality, even with no deposit, if they pulled out, you would be able to sue them for breach of contract, for the full 10%. Of course being 1st time buyers they probably wouldn't have the money, but it is still very serious being sued for such a thing as you can probably imagine, and would have lots of repercussions (for example I doubt they'd be offered another mortgage for a long time!).

..So in reality, I don't think you need to worry unduly.. ..I did at first re my situation, but after speaking to my solicitor more, I feel better.

If I can be of anymore assistance - feel free to ask!

[eddy no1]

thanks for the reply mate
the thing is the first timers are buying my house at 120,000 - no stamp duty -so the really are 100% the only thing they are paying is there solicitors and search fees , i think havng met them twice that there great people and cant wait to move in --but skint-- the chance of getting a minamal deposit if any are slim .
ive spoke to our estate agents who contacted there lender and said everthing is going fine no probs atall ,but if our vendor want a deposit what shall i do ??

again thanks

WoW eddy , I think I will move to the UK with house prices like that , but then again thats in pounds ????? not dollars.

cheers

Big Ted

[dng007]

We're actually in the same position re deposit too - i.e. our buyers will be putting down around £1500 deposit - we've yet to find out if our sellers (and any others further up the chain) are okay with that level of deposit - but if they aren't, then we will add some more to it - may be say £5,000. I too was concerned, but as our solicitor explained - if it did all fall through after exchange, it makes no difference what deposit you put down; to try and explain:

After exchange, your buyers pull out - meaning you get their deposit (which in this case is zero). You then have to pull out of your purchase too, since it's dependant on the sale of your own property - and so on up the chain. If the absolute worst happened, the person at the top of the chain would sue their buyers, and so on... so you would end up sued by your sellers for up to 10% of the purchase price of the house your buying, and you would then have to do the same to your buyers. If you were to put down 5% deposit, they would take that straight away, then sue to for the rest... If you put down no deposit, they would simply sue for the full 10% - so in reality you are no worse off putting down the deposit.

Yes, because your selling to 1st time buyers (with naturally very little money to sue), you could in theory end up worse off than the others in the chain should it all fall through after exchange - but in reality very very few fall through, because of the serious implications should they pull out after exchange. If your concerned, ask your solicitor how many cases he is aware of that fell through after exchange, and what happened.

Lastly, you probably already know this - but deposits are only put down on the day of exchange of contracts... up till that point anyone can pull out with no consequence. Once exchange has happened the final part is completion; this usually happens around 4 weeks later and is the day you all physically move in, however it is possible to exchange and complete on the same day (though solicitors change a premium of several hundred pounds for this).


Obviously once completion happens, you will get back fully any deposit you put down.

I've sold over 30 properties and anyone can pull out until contracts are exchanged, its happened to me.Even then they can pull out albeit with some financial committment to pay.

On all my sales no money changes hands until completion anyway.

When they do pull out you are left with a pile of bills to pay .

The sale of houses needs a major shake up imo ,as its way behind the times.