Buyer has forwarded signed contracts but without 10% deposit.

[Askor]

Hopefully someone can allay my concerns regarding the following situation:
I am selling my house and reached an agreement with a buyer. My solicitor received signed contracts from the buyer but they want to use the auctioneer booking deposit as the deposit that normally comes with a signed contract (10% of the agreed house price).

My solicitor says that he is seeing this more often in the last few years and it was up to me whether to proceed or not. I understand if the buyer is getting a 90 or 100% mortgage, but these buyers are regarded to be relatively wealthy.

The caveat in all of this is that I am purchasing a new home based on the successful sale of my existing house, and the contracts are due to be signed for this new house in a couple of days. If I proceed with this purchase and then the buyers reneges on my house, then they will only lose their booking deposit, whereas I am liable to lose 10% of a sizeable amount.

Has anyone else experienced this type of situation?

 

[bonnie1]

I experienced this situation about a month ago. The estate agent selling my house kept saying ''they wont pull out'' but I wasnt happy about it and got my solicitor to contact theirs to ask for the 10%. I had found out by posting my question on this website that most of the lenders offering the 100% mortgages will also offer a facility for the buyers to draw down the 10% needed in the form of a loan.
The 10% came through a few days later and I felt much happier and since then the sale of my old house and purchase of new one have closed.

 

[Askor]

But the problem with pushing for the 10% is that they may pull out of the sale altogether and I will not be able to purchase my new house. It has taken 4 weeks for them to sign the contract and unfortunately my house has been off the market during this time. I really don't like the way a prospective buyer can so easily pull out of a verbal "sale agreed" without a consequence upto the contract signing. This can keep a house off the market for months. There should be a nominal non-refundable deposit after the first few days of an agreement.

 

[renter]

Askor,
We are in this situation also. We agreed to the request even though we thought it was a bit suspicious. We did'nt want deal to fall through but solicitor and auctioneer said we could insist on 10% if necessary. We are waiting for deal to close which we are hoping will happen next week. Contracts are signed. Purchaser is pushing to close the deal as selling their house too and wants to move into ours.

 

[bonnie1]

I know what you mean, you dont want to frighten them off but on the other hand you are entitled to peace of mind too. Your solicitor said it was becoming common nowadays for this to happen, but mine said that in this kind of scenario some sort of a deal would be made. For instance if you were selling your house for 500,000 and the buyers didnt have 50,000 they could offer maybe 20,000 as a deposit. I know of another couple who accepted another 5,000 on top of the booking deposit but I wouldnt be happy with that. I agree with you that its very unfair on the seller.
Would you have time to put your house back on the market again?

 

[lmd]

We are closing the sale of our house next week. Our purchasers paid €5,000 at the 'sale agreed' stage and on signing contracts their solicitor asked our solicitor to see would we accept a further €20,000 as the contract deposit (it should have been over €40,000) and we accepted that as we know it is difficult (we had to borrow our own deposit for our new house from the credit union). Anyway basically I didn't care that it wasn't the full 10% once I knew it was a large enough figure to know they were committed.

I understand that you are nervous about them pulling out, but you can not let them have you over a barrel, you won't sleep until the contracts are signed and they will be in the driving seat the whole time. If I really wanted to buy a house I would get the deposit from somewhere (especially if you accept say €25,000) and believe me if they were in your shoes they would not accept €5,000. Don't listen to what estate agents say in relation to this, they are full of it and will say anything to get their commission, go with whatever your solicitor advises.

 

[Askor]

Well, the good news in all of this is that it is not a unique situation according to some of your posts. That has eased most of my concerns. I am going to proceed with it because I do not have time to put it back on the market. The buyers are buying my house as an investment and they knew that I was purchasing a new house based on a succesful sale. Unfortunately, they used this fact against me by withholding the contract deposit. I will let you know how the saga concludes.