Sale Agreed but not paying 10% deposit?

Looking for a little advice. Have just received the good news that the contracts have been signed on the sale of our house. A problem has arisen in that the purchasers are getting a 97% mortgage thus meaning they are unable to pay a full 10%. The purchasers have paid down a 5,000 Euro booking deposit but there remains approx 15,000 to make up the 10%. Is this standard practice? Would it be advisable to proceed as the purchasers have indicated a willingness to close the sale with immediate effect? Just being (over) cautious here. Thanks in advance for any advice.

10% is still standard in second hand houses. There is always risk when selling property and at least the full 10% deposit cushions the pain if things go pear shaped. That said, if the purchasers can and will genuinely close quickly it might be worth going with them unless you have purchasers beating your door down. One way of doing it is to sign everything the same day i.e. contracts and deed so that if they cannot complete you're not trapped into the Contract. Mind you, thats not great from their side because what happens if you get a better offer before you close?

Swings and roundabouts

mf

We had the same situation when we sold our house 2 years ago. We put a clause that the sale had to close by a certain date if we were to accept the lesser deposit or else sale was off. FTB's are chain free so the lesser deposit makes up for a faster sale. Do what you feel comfortable with but we went ahead and sold the house very fast this way.

This happened to us when the buyer of our house claimed with only days to go to closing that she 'didn't know' about the need for a 10% deposit - she was buying our house with the proceeds of her own, wasn't getting a mortgage and therefore assumed that a deposit didn't apply - idiotic, I know, but that was her excuse. We had a sleepless night before deciding to go with her - if we'd insisted on her getting bridging or another type of loan at that stage we'd have been in danger of losing our new place. It all worked out okay in the end but our hearts were in our mouths - basically WE paid a 10% deposit for our new place so if things had gone wrong we'd have lost everything. We spoke to our buyer and she assured us that she was ready to go ahead - but we were saying rosaries that she'd remain hale and hearty for the duration of the sale process!! I wouldn't recommend it as a route to go down if you have any other option but we didn't, at the time.

Can you verify that they got a mortgage for 97%?

I looked into getting a 95% mortgage for a new house from BOI who offers this LTV ratio to graduates. However, it wasn't an option as the deposit required was more than 5% and you couldn't drawdown partially on the mortgage to come up with the rest of the deposit that the builder required.

So what they are saying is valid.

Best of luck.

AKA said:

However, it wasn't an option as the deposit required was more than 5% and you couldn't drawdown partially on the mortgage to come up with the rest of the deposit that the builder required.

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I know that UB allowed someone to drawdown a portion of their mortgage to finance the deposit (more then 5%) on a new apartment.

I don't really see what difference this makes as the deposits are refundable in any event until contracts are signed ??

So if it is €5,000 or 10% it still has to be handed back if it does go pear shaped.
So it only proves the seriousness of any offer.
I would take the lesser sum and hope for the best, which is all you can do in any event.

Just to clarify a buyer pays a booking deposit (afair 3%) to the estate agent until contracts are signed. The booking deposit is fully refundable. They then pay 10% when they sign the contracts. As this stage the deposit is not refundable.