Who holds the deposit after exchange and what happens if the buyer pulls out

Buying & Selling
1

Selling a large detached in the South East. Downsizing. Have an interested party who seems keen but no offer yet.

Wanting to understand the sequence once we get to exchange:

  1. Buyer pays a deposit, typically 10%. Who actually holds this? The seller’s solicitor? The buyer’s solicitor? The estate agent?
  2. If the buyer pulls out AFTER exchange, the seller keeps the deposit. Straightforward enough. But does the seller also have a right to sue for ADDITIONAL losses, e.g. costs of remarketing, bridging finance, price difference on resale?
  3. What if the seller pulls out after exchange? Same principle in reverse? The buyer gets the deposit back AND can sue?

I have read various articles online and they all say slightly different things. Some say the deposit is held by the buyer’s solicitor as stakeholder. Others say the seller’s solicitor. Wanting to know what actually happens in practice before I get too far down the line.

2

Buyers solicitor holds the deposit as stakeholder unless the contract says otherwise. On exchange it gets sent to the sellers solicitor. If the buyer pulls out after exchange yes the seller keeps the 10% and can in theory sue for additional losses but in practice almost nobody does because its expensive and uncertain. The deposit is the remedy. Dont plan your finances around winning a court case.

3

Understood on the stakeholder point. One follow-up. The 10% deposit on exchange, is that always 10% or can the buyer negotiate it down to, say, 5%? And if so does that weaken the seller’s position if they do pull out, given you would only forfeit the lower amount.