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Common Ground News

Do you pay 10 deposit on exchange of contracts?

Author

Chloe Ramirez

Updated on February 15, 2026

Do you pay 10 deposit on exchange of contracts?

Normally, a 10% deposit to be paid on exchange of contracts. If you are buying and selling your solicitor can usually use your buyers deposit in connection with your purchase so you will not have to find anything. If you are just buying, the amount of the deposit may depend upon the size of your mortgage (if any).

Likewise, people ask, can you exchange contracts with less than 10 deposit?

If you accept a deposit of less than 10 per cent you still have the right to sue your buyer for the full 10 per cent deposit, plus any other losses to which you are entitled under the terms of the contract, if the buyer does not proceed with the purchase after exchange of contracts.

Likewise, what is the deposit amount required on exchange of contracts? 0.25%

Also asked, what happens to the deposit on exchange of contracts?

Your exchange deposit, on the other hand, really is a deposit. Your solicitor transfers it to your seller's solicitor when you exchange contracts on the sale. This is known as the 'point of no return', in that if you back out of the purchase now, you will lose that money.

Do you pay solicitors on exchange or completion?

In terms of when do I pay solicitors fees when buying a house, you most often pay this initial deposit then the balance of your fees one day before completion.

Do I have to pay a deposit on exchange of contracts?

You will have to pay a deposit on exchange of contracts a few weeks before the purchase is completed and the money is received from the mortgage lender. The deposit is often 10% of the purchase price of the home but it can vary.

How long after signing contracts do you exchange?

How long between exchange and completion? The length of time between exchange and completion is whatever all the parties involved agree to, but it's usually one or two weeks.

Who holds deposit on exchange of contracts?

The buyer is normally expected to pay up to 10% of the purchase price at this stage as a deposit – this is normally held by the seller's solicitor pending completion. We recommend that you don't book removals or give notice to quit rented property until exchange of contracts has actually taken place.

Where does the 10 deposit come from on exchange of contracts?

A 10% deposit is due to the seller when contracts are exchanged. The seller needs to continue making mortgage payments until the completion day, and the existing mortgage or loan can't be transferred to a new property.

What can hold up exchange of contracts?

Many things that can hold up the exchange of contracts. These include, but are not limited to: Inefficient Enquiries – If your solicitor is unhappy with their answers to their queries, they won't complete. Slow Buyers/Sellers – Sometimes it's the buyer or seller holds things up (deliberately or otherwise).

What goes wrong between exchange and completion?

Another thing that could go wrong between exchange and completion is that you could find other serious issues such as damp, Japanese knotweed or structural issues at the property. This may give cause for concern and have you wondering if you should indeed go ahead with the property purchase or not.

Can you exchange contracts without a completion date?

You cannot exchange contracts without a completion date. The completion date in the contract will be a date that both parties to the contract agree. The exchange of contracts for house buying is the process that creates a legally binding contract. It is at this point where a deposit is paid.

Who gets the deposit when buying a house?

At settlement, you will officially own the property and pay the remainder of the purchase price. Once you've signed the contract of sale, you're legally bound by its terms. Your deposit either goes to the vendor, or if they're selling through a real estate agent, you'll need to pay it into the agent's trust account.

Can you get your deposit back after exchange?

Once both parties have signed and exchanged contracts, it is very difficult for either party to back out of the agreement. Buyer – If you do not complete you will lose your deposit and you can be sued. The deposit is returned to the buyer with interest and the vendor must pay to cancel any registration of the contract.

What happens if a buyer pulls out after exchange of contracts?

Once contracts have been exchanged, the buyer is legally committed to paying the price stated in the contract. If the buyer pulls out of the sale after contracts were exchanged, you can sue them for any loss this causes you and you may be able to keep the deposit. You will need to get legal advice.

Can I move in after exchange of contracts?

What happens after exchange? When exchanging contracts, the “completion” date is also confirmed. The completion date, put simply, is moving day. It's the date on which the seller must vacate the property and the buyer will get the keys and can move in.

What happens on completion day buyer?

Completion day (the clue's in the name) is the point that all the process of buying a house leads up to. On this day, the agreed upon sums of money are transferred, keys exchanged, and you could begin moving into your new home.

Who is responsible for buildings insurance after exchange of contracts?

If you have a mortgage

If you buy a house you should take out buildings insurance when you exchange contracts. If you sell a house you are responsible for looking after it until the sale is completed so you should keep your insurance cover until then.

Why do solicitors take so long to exchange contracts?

There are numerous factors that can cause delays, delays in conducting or obtaining searches, differences in valuations, the size of the chain, unresponsive buyers or sellers, a solicitor having too much to handle or simply being bad at his or her work.

When can the seller keep the deposit?

Yes, the seller has the right to keep the money under certain circumstances. If the buyer decides to cancel the sale without a valid reason or doesn't stick to an agreed timeline, the seller gets to keep the money. These are the most common ways a buyer will lose their earnest money.

Who signs first buyer or seller?

Once a real estate seller and buyer agree to terms, the seller normally signs a real estate purchase agreement or sales contract. Real estate buyers are generally expected to sign purchase agreements first, though, especially during offer and counteroffer phases.

Do you lose your deposit if finance falls through?

Under the finance clause, you can only pull out only if your loan is not approved by your lender. If you exchange contracts without a finance clause and your formal approval falls through, you could lose your deposit and the vendor can sue you for damages.

What is the maximum deposit required under the standard contract of sale?

Under a Contract for the Sale of Land in NSW, a Purchaser is required to pay a deposit, usually being 10% of the purchase price, at exchange of Contracts.

Do you get your deposit back when you sell your house?

Oh yes and the deposit isn't refundable - it's the bit you pay outright so that the mortgage lender isn't risking so much by lending you the full value of the property, in case its value goes down and they risk losing out if they have to sell it on.

What happens on settlement day?

On settlement day, at an agreed time and place, your settlement agent (solicitor or conveyancer) meets with your lender and the seller's representatives to exchange documents. They organise for the balance of the purchase price to be paid to the seller. Your lender will: provide the funds to purchase the new property.

Do you get your deposit back when buying a house?

In New South Wales, Queensland and the ACT there is a 5 business day cooling-off period in which you can pull out of your offer. If you do so within this period you will then be forced to forfeit 0.25% of the purchase price. The seller then has 14 days in which to transfer you back your full deposit.

Do you pay solicitors fees on completion?

The solicitor should send you a detailed quote. Actual payments will be done in stages, although I'd expect the majority of the money paid at the end, I.e. Completion. They will ask for a deposit upfront to pay for searches and other fees on your behalf.

Do mortgage lenders do final checks before completion?

For the vast majority of mortgage applications, a credit check at this stage of the process is purely to ensure there have been no significant changes before final completion. The good news is that when a lender decides to re-run a credit check just before completion, it is normally to check the status of employment.

Is stamp duty calculated on exchange or completion?

Your solicitor or conveyancer will usually calculate and pay your stamp duty bill on your behalf. They will normally submit your return and pay the stamp duty on completion day, having collected the money from you in advance.

Do you have to pay solicitors fees if sale falls through?

Some Conveyancers offer a 'no completion no fee' service, so if a sale falls through there will be no fees for legal work carried out. The disbursements incurred will still be paid but the agreed 'fee' will not become payable.

Can I add solicitors fees to my mortgage?

If the lender does not cover the costs and you're paying the solicitor fees yourself, you should expect to cover various bills at different points during the sale process. And as we mentioned earlier, you can't add solicitor fees to your mortgage.

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