“Ask the Expert”
Get all your legal questions answered by our expert Solicitor Emma Selfridge, Head of Conveyancing at Bowden Jones Solicitors.
Q: My solicitor is asking me for 10% of the purchase price for my deposit when I exchange. I don’t have this? What do I do?
A: I assume this may be because you are a first time buyer or having a 95% mortgage or even that you are selling a property as well as buying a property and your funds are tied up in your sale property.
10% of the price is the standard amount required as a deposit when you exchange contracts on a property in England and Wales. However, the seller can be asked to accept a lesser amount especially if you are first time buyer or having a 95% loan to value mortgage. Alternatively, the deposit may be coming up the chain from the buyer of your sale property and the entire chain will simply have to accept
the deposit that is available in the chain. Te deposit will be paid by the first buyer in the chain to the first seller in the chain and will go up the chain to the last seller. Law firms are very familiar with chains and this should not cause you any issue. Q: I don’t understand the legal terms my solicitors keep using. What is the difference between exchange and completion?
A: Exchange of contracts is when you become legally bound to buy or
sell the property.
Before exchange no one is legally committed and can walk away without any penalties due to the other party. When you exchange you agree a completion date and that date is then contractually binding on all parties. If you don’t complete on the completion date then there are financial implications involved and
you are in breach of contract. Exchange and Completion can occur simultaneously (same day) or can be a day or week or month apart. It really depends on the wishes of the seller and buyer.
Please note that the above is basic advice. Should you require additional information then please call our team on 02920 484550. If you have any questions that you would like answered within the next edition please email
enquiries@bowdenjones.co.uk.
New Homes Wales and the South West
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