My friend has asked me for my advice. Her solicitor has told her that the purchasers of her house can only manage a £1000 deposit on exchange of contracts. (completion end of October) Usually it is about 10%. Is there a risk in accepting this small amount?
2006-10-17 09:29:34 · 4 answers · asked by Veeta 2 in Business & Finance ➔ Renting & Real Estate
Deposits have generically been around 10%, however with the introduction of 100% mortgages, some people will exchange with no deposit at all!!!! so yes this should be fine. For 1 if the people buying your friends house are using a 100% mortgage from lenders like northern rock or coventry building society, then they will have no deposit at all. When you exchange contracts you are legally bound to purchase the property, and then so will become legally responsible for that proerty. Your friends solicetor should be in contact with his buyers solicetor and you should be able to find out if they are using a 100% mortgage or not. Also wheather your friends buyers are first time buyers or next time buyers. If they are next time buyers then they should have a higher deposit, unless they have personal debt to repay and then in turn using a 100% mortgage.
2006-10-18 05:36:18 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Big risk - they're unlikely to come with the money on time if they can't come up with a decent deposit.
The deposit is usually a booking deposit - the exchange of contracts should only be done when the FULL amount is paid.
Your friend should NOT hand over ownership of her house until the money is in her account. That's a world of trouble for her if she does.
Her solicitor doesn't seem to be acting in her best interests - make sure there's no conflict of interest there - check things out.
2006-10-17 09:46:26 · answer #2 · answered by RM 6 · 0⤊ 0⤋
We had a house in the Royal Forest of Dean Gloucestershire. My husband(British) finally got his American Citizenship and had only 180 days to enter America, first woman interested in our house fell through because she was going through a divorce and lied about not having her house to sell first. so we put our house on the market again, and we got a great offer second time around, drew up the paperwork, nothing was put down because there was no laws in UK stating there needed to be a promissory down payment. In all... on the day of signing, the man said he could not afford our house and backed out. It waisted our precious time. So we had to leave the house to his parents to sell and fly to USA. In the end we learned a valuable lesson. And thankfully the housing market kept going up in 2004 because we got 20k more for our house.
2006-10-17 09:53:06 · answer #3 · answered by Anonymous · 0⤊ 0⤋
The reason you hire a solicitor is to sort these kinds of problems out and to ensure everything is done as it should be. Are you a solicitor?
2006-10-17 09:45:29 · answer #4 · answered by Mogseye 3 · 0⤊ 1⤋