Signing contract for house - do I need 10% of sale of house in cash ?

S

suzyann

Registered User
Messages
149
Hi
We have just bought a 535k house - we are using the profit from an existing house and then loan to pay for the house.
We have paid a 7K initially booking deposit to the Estate Agent .
We will be signing both contracts on the same day - We sold our house for 317500.
Do we need to have 10% of 535K when signing contracts for our new house - We do not have this yet as is tied up in the sale of the existing house ? Does anyone know how this works?
Thanks
 
It depends on the vendor. Usually 10% is paid on signing contracts but as your money is tied up at the moment the vendor may agree to accept the 7k now and the balance on closing. They could insist that you have contracts signed on the sale of your existing house first though.
 
It would be the bank rather than the vendor that may insist on you having contracts signed on your current property sale (it may be a condition on your new loan offer).

You will not be able to use the future proceeds from the sale of your house as a cross-over to fund the deposit on the new house.

While the possibility of the vendor accepting a lesser deposit is a possibility, the likely outcome I would think is that you will need bridging for whatever you fall short of for the deposit.
 
Thanks - Yes you are right - I contacted the solicitor and he indicated that we would need to have the 10% deposit less booking fee in order to sign - We have managed to scrape the deposit together with a little help from family.
My next question is then - upon closure we can use the monies from the sale of our house for the purchase of the new house along with the loan from the bank- ie we can immediately use the sale money for the purchase of our new house?
 
In theory, yes. It will all come down to timing.

I had a panic when I last moved in that we had the closing of sale and purchase tightly planned, and on the day we were due to close on our sale, our buyer's bank put the loan cheque in the post. We were moving out that day, and heard about the problem at 9pm that evening.

We moved out anyway and let the buyer move in next day, despite having to wait a week for our funds.
 
You must log in or register to reply here.
Back
Top