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Selling & Buying at the same time..10% deposit for contracts

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  • 02-01-2021 2:31am
    #1
    TattooedLady
    Registered Users Posts: 38 ✭


    So we are hoping (all going well with mortgage approval etc) to move to a bigger house early this year. We have gone sale agreed on a house we love and our house has gone sale agreed, all within the last few weeks. Our mortgage is in the final checks before letter of offer is issued.

    We have no mortgage on our current house and the money from selling the house will be our deposit on a new house.

    We were meant to be meet our solicitor next week to discuss everything but not sure how it will all work out now with covid!

    Anyway my question is regarding the 10% deposit needed when signing contracts. Obviously we don't have the money until we sell our house so I'm presuming we would have to sell our house and have it completed and all before signing the contracts?

    It's just such a hassle as we have a toddler and moving in with family isn't ideal but I can't see any other way it'll work out.


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    #2
    Dav010
    Registered Users Posts: 14,006 ✭✭✭✭Dav010


    If you currently have no mortgage to pay, were you not able to save for a deposit?


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    #3
    godtabh
    Moderators, Science, Health & Environment Moderators Posts: 23,204 Mod ✭✭✭✭godtabh


    You sing the contracts for you place first. Get the 10% deposit. Then sign contracts for your place and transfer deposit.

    If you don’t have enough to cover the full amount you’ll have to beg borrow and steal off family and friends. If you can’t do this, you will have to close your house before singing contracts on another house which my frustrate the sellers of the house you are buying and risk losing it.


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    #4
    TattooedLady
    Registered Users Posts: 38 ✭TattooedLady


    Dav010 wrote: »
    If you currently have no mortgage to pay, were you not able to save for a deposit?

    We have some money saved but not enough to cover the full 10% needed


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    #5
    TattooedLady
    Registered Users Posts: 38 ✭TattooedLady


    godtabh wrote: »
    You sing the contracts for you place first. Get the 10% deposit. Then sign contracts for your place and transfer deposit.

    If you don’t have enough to cover the full amount you’ll have to beg borrow and steal off family and friends. If you can’t do this, you will have to close your house before singing contracts on another house which my frustrate the sellers of the house you are buying and risk losing it.

    I never thought of this. I kind of just presumed when the buyers for our property paid it it would just be held by the solicitor and we couldn't use it. We would be able to make up the difference between the 10% we get for ours and the 10% for the new one.


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    #6
    Dav010
    Registered Users Posts: 14,006 ✭✭✭✭Dav010


    TattooedLady wrote: »
    I never thought of this. I kind of just presumed when the buyers for our property paid it it would just be held by the solicitor and we couldn't use it. We would be able to make up the difference between the 10% we get for ours and the 10% for the new one.

    It is held by the solicitor.


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    #7
    memomtoo
    Registered Users Posts: 279 ✭✭memomtoo


    If at all planning to buy a used property
    Can we claim tax rebate?
    As second time buyers?

    And also wondering if we give first property for rent(not yet sure either sell or keep)
    Do we pay tax to rent?
    How to avoid or lower it as it sounds too much?
    As a paye worker


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    #8
    theteal
    Registered Users Posts: 7,593 ✭✭✭theteal


    Bridging loans are fairly standard practice for chain sales over here.Are they not a thing in Ireland?


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    #9
    Dav010
    Registered Users Posts: 14,006 ✭✭✭✭Dav010


    memomtoo wrote: »
    If at all planning to buy a used property
    Can we claim tax rebate?
    As second time buyers?

    And also wondering if we give first property for rent(not yet sure either sell or keep)
    Do we pay tax to rent?
    How to avoid or lower it as it sounds too much?
    As a paye worker

    You pay tax on income, so yes, you pay tax on rent. Unless you know and understand what you are getting yourself into, including tax implications, RPZs and tenant legislation etc, don’t become a landlord.


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    #10
    Dolbhad
    Registered Users Posts: 782 ✭✭✭Dolbhad


    Chat to your solicitor. My Aunt two years ago was selling her house and buying a second hand house. She didn’t have the money for the 10% deposit for the purchase. Her solicitor asked for a reduced deposit to be accepted by the sellers solicitor (which was just the booking deposit) and the sellers agreed.

    It’s understandable in your case you won’t have the full deposit as all your money is tied up until you sale your current house.


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    #11
    shreko
    Registered Users Posts: 69 ✭✭shreko


    Explain your position to the solicitor. When I bought my first house I got a 95% mortgage so only had 5% deposit. My solicitor asked the seller if they would accept that and they did.
    But it’s down to the seller at the end of the day.

    You cannot use the deposit Provided by the the buyers of your own house. This is held my the solicitor and only released to you on close of sale.


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