Trading up - deposit at contract signing

[Ash21]

We are considering trading up. We are in South Dublin and looking to move to a another location in the next year or so. But have a couple of questions...

Brief background:
Salaries: €130K combined

Current house value: €625k
Prospective new house value: €650K

Current Mortgage: €190K, 15 yrs
New Mortgage: €240K, 15 yrs (circa 25k extra to cover decorating and other costs, not interested in a property that requires extension etc.)
Savings: €25k (usually when we have had a surplus over this we pay into AVC's).

My questions are:

1. Is it viable to purchase a house in our area via a chain and closing the same day?
2. When it comes to the conveyancing, on signing of contracts would we need 10% hard cash for the deposit? (not to be confused with mortgage related deposit). It could be some years before we can save for that? Would a figure like €30K suffice at this point?

 

[Protocol]

At signing of contracts, every buyer needs 10% hard cash.

Anything less than that would be subject to negotiation with the seller??




Until recently, SSB like you needed 20% deposit overall

It seems that is now reduced to 10%??

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[RedOnion]

When it comes to the conveyancing, on signing of contracts would we need 10% hard cash for the deposit?

10% is standard, but it's pretty common to negotiate a lower amount. This is held in trust by the sellers solicitor.

Is it viable to purchase a house in our area via a chain and closing the same day?

It's possible, but can add stress, and reduces your buying power.
If I was a seller and had 2 offers on the table which were close in value, one in a chain and the other not, I'd be telling my estate agent to accept the offer that wasn't a chain.
There are stories of a lot of sales in your price bracket falling through in last couple of months, so research the market, keep an eye on properties coming up for sale etc. A lot could change in the next year before you sell.

 

[Ash21]

10% is standard, but it's pretty common to negotiate a lower amount. This is held in trust by the sellers solicitor.


It's possible, but can add stress, and reduces your buying power.
If I was a seller and had 2 offers on the table which were close in value, one in a chain and the other not, I'd be telling my estate agent to accept the offer that wasn't a chain.
There are stories of a lot of sales in your price bracket falling through in last couple of months, so research the market, keep an eye on properties coming up for sale etc. A lot could change in the next year before you sell.

We would understand the stress involved and that we wouldn’t be as attractive as a FTB, but there is no other option and willing to do it. Nowhere to rent in our area either.

We have built up good equity over the years but till now didn’t dawn on us that over €60k of hard cash would be required at contract signing when trading up. Don’t like holding on to a lot of cash on deposit, Frustrating, as all going well the solicitor would only hold on to it for a few weeks and we would get it back.

 

[RedOnion]

We have built up good equity over the years but till now didn’t dawn on us that over €60k of hard cash would be required at contract signing when trading up.

You just negotiate the amount before signing. It's pretty common.

 

[Ash21]

You just negotiate the amount before signing. It's pretty common.

Thanks, appreciate your help on this. Do you know what a reasonable percentage would be?

I’m a bit of a planner, and would like to get our ducks in a row. It’s stressful enough, wouldn’t like it to get to contract stage and have nowhere near enough. This would waste everyone’s time, and of course don’t want to look very foolish!

 

[RedOnion]

Do you know what a reasonable percentage would be?

Personally, I've seen as low as 5%. But it's up to the seller to accept whatever you propose (or more what their solicitor advises them). It really just needs to be enough to make sure you don't mess them around later and fail to complete the contract.