Selling house- Not receiving the 10% deposit

Hi all,

I am currently selling my house and am sale approved. The buyer is using a 100% mortgage so will not be able to provide us with the standard 10% deposit. Is there any issues with this that I should be worried about. I understand that if the sale falls thru, I will be entitled to squat more than the booking deposit.

Hi there,
When we were buying our (and selling) we didn't have to give the full 10% to the vendors and we didn't get the full 10% from our purchaser.

When the sale closes the full amount will then be lodged in to your account.

Was a purchaser with a 100% mortgage and didn't end up giving a 10% deposit. In the end, after some negotiation, the sellers solicitor was happy to receive a copy of my official loan offer...

The Punter said:

I understand that if the sale falls thru, I will be entitled to squat more than the booking deposit.

Click to expand...

If the sale falls through before contracts are signed, you won't even be entitled to the booking deposit - it's refundable up to the signing of contracts.

If the contracts state there is a 10% contract which will be forfeited if the sale falls through, that is still legally enforceable. Even if they haven't lodged the money with your solicitor, you could sue them for it.

Seller Beware ! I went through this selling a house last year.

Was told buyer had 100% mortgage and was not in a position to pay 10% deposit. But they would close within a week or two with full amount issued so I said ok fine and signed contracts.

Buyer was refused life assurance on medical grounds, cheque could not be issued, sale fell through. This took about 2-3 months to sort out before I could actually put house up for sale again. At which stage we were into the late 06 slump so lost a lot of time and money as a result. If I had received deposit, this at least would have provided some compensation.

How buyer arranges their financing is up to them, but you should insist on the 10% deposit to ensure you are covered if any problems.

Banks issuing 100% mortgages, normally provide a short term loan to cover the 10% deposit. Its up to buyer to ensure this is organised.

If it was me now, I would insist on the 10% deposit being paid.

It has taken quite some time to get to this stage. It also seems to be a buyers market so how much pressure can we really put on the buyer to front up 10%? I would say not alot.

We didn't receive the full 10% deposit either when seeling our house 3 years ago but put a time limit into the contract that they had to close by a certain date. We received 6% instead of 10% but the sale went through ok by the date requested.

Id be a little wary of not receiving a deposit , particularly in this climate. Buyers are getting easily spooked and without the deposit as a hook to hold onto them , they could easily pull out leaving only court action as your remedy for their time wasting.

You should ask your solicitor can he add a clause to the contract about them pulling out of the sale such as a floating deposit which only becomes payable if they renague or what about this ?

http://www.exchangebond.com/index.html

Its a tricky one, as buyers are hard to come by these days.

As DeFinn says above, the 100% mortgage comes with a deposit drawdown facility. The buyers should avail of this if they do not wnat to enter into any of the above. House sales are generally subject to a 10% deposit as the norm, though there are exceptions. Your purchaser would have known this all along.

Lads i think this is moot - the auctioneer always holds onto the deposit for their payment. I have never given full 10% nor have i ever recieved any monies before closing.

i doubt very much that any solicitor representing a buyer worth their salt would allow a buyer to sign a contract stating the deposit to be given to seller if sale falls through.

" the auctioneer always holds onto the deposit for their payment."

THis is a booking deposit - its not the contract deposit. The total of the two was until recently generally in or around 10%.

" I have never given full 10% nor have i ever recieved any monies before closing."

Unusual in the past - not at all unusual in the current climate.

"i doubt very much that any solicitor representing a buyer worth their salt would allow a buyer to sign a contract stating the deposit to be given to seller if sale falls through."

The rules are very simple. You sign contracts - you pay a non refundable deposit. You don't complete - you forfeit the deposit. Makes you think twice before wasting everyones time. Not only that - you can be compelled to complete the entire purchase.This is not always feasible but if I sold to (e.g.) Mary MacAleese or Bertie Ahern, they pulled out after signing contracts and I could not sell to anyone else, I would compel them to complete.

mf

i understand where you are coming from - but if a buyer pays a deposit AND signs a contract - there is very little that can happen for the sale to fall through at that stage. i mean you are talking about the sale falling through the moment just before the keys are handed over.

"but if a buyer pays a deposit AND signs a contract - there is very little that can happen for the sale to fall through at that stage. i mean you are talking about the sale falling through the moment just before the keys are handed over."

Not true. Contracts are generally signed and a deposit paid several weeks in advance of completion when vacant possession, title and keys are handed over to purchaser in exchange for funds. A lot of things can and do happen in that time frame.

mf