10% when signing contract

I'm just about to sign a contract for the purchase of my next house and I must come up with 10% of the purchase price less the booking deposit. I've asked my solicitor if I can put the 10% he is receiving for the sale of my house as part of the 10% for my purchase and he said no. Is this normal and if so does anyone know why?

Garfieldus said:

I've asked my solicitor if I can put the 10% he is receiving for the sale of my house as part of the 10% for my purchase and he said no.

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What do you mean by this? If the sale of your house does not close before the purchase of the new one and you don't have the cash in hand to put it up as a deposit then you can't do it. Perhaps you mean can you "pledge" the deposit in some way? As I presume your solicitor says you can't really put the deposit up unless you have it in hard cash.

ClubMan said:

What do you mean by this?

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I mean....

1. 10% of the purchase price will be handed over to my solicitor by the purchaser of my house when he signs the contract.

2. Some days later I will sign to purchase my new house and was wondering if I can use the 10% already handed over (in 1 above) as part of the 10% that I have to come up with.

Still not clear. Before you sign/close the purchase of your new house you will generally be required to pay the 10% deposit in advance. Will you have the money from the sale of your old house by that time? If so I can't see what the problem is. Even if your solicitor needs to release the money to you first and then receive back up to 10% towards the deposit so be it as long as the timing is right. However I would not expect any seller to accept some sort of pledge of the deposit contingent on your house being sold and the money received if that's what you mean. Maybe you can clarify the timing of events here in terms of signing the initial contracts and paying the deposit as opposed to closing the final contracts and the properties being handed over to their new owners?

Garfield,

I understand what you mean, I'm not sure where Clubman is getting confused

I would ask your solicitor to inform and request the vendor of your new house to waive the full 10%, they might

The deposit you receive, as your 10% deposit as a seller, is not usually released by your solicitor until closing
I am not entirly certain as to legalities of who owns that money but it is not usually released

Failing everything else ask your bank/mortgage provider for a short term loan, I know Ulster Bank will do one on interet only charging around 8-10% interest rate with a negotiable set-up fee, and not charges for paying up early

Not ideal situation but they should understand

stuart@buyingtolet.ie

Clubman, I think the question is when selling your current house and your solicitor receives the signed contracts back from your buyer along with the usual 10% that your buyer hands over at this stage, can this be used to fund the 10% deposit on the new house being bought.

As far as I am aware this is not possible..

Thanks folks - I was getting confused but understand now.

No, as Stuart says, the deposit paid in relation to the sale of your house is held by your solicitor in trust and cannot be released until it is closed. Similarly the deposit you are paying in relation to the purchase cannot be released by the vendors solicitor to his client before closing. As stuart points out, it is possible for the 10% to be negotiated downwards if the Vendor will agree to it.

Thanks to all for your replies. Clubman sorry for confusing you

The 10% isn't a problem and I don't need to negotiate it down. My reason for asking was that I just don't like being told "no" without an explanation and needed to know why.

Thanks again
Garfieldus