Price change after exchange

A family member exchanged on property A with a subject to finance clause (which was contingent on selling property B).

They are finding it more difficult to sell property b than they expected which means they may have a smaller deposit which is not enough to get financing. Will use round numbers for maths here to ask question

Say the purchase price for property A is $1m and they need a 10% deposit ($100k). Let’s assume they have the money for stamp duty

They thought they would easily clear $100k on selling property B to cover the deposit, legal etc (eg sale price less debt) however with feedback it looks as they though may get closer to $50k

Obviously the sellers of property a don’t want to lose out on the sale so have offered to be negotiable on price. The bank Val came back at $1m

So if the sellers agreed to drop the price to say $950k, this doesn’t really help- it just means the deposit needed falls $5k from $100k down to $95k

Trying to think creatively, is it legal / ethical for the property purchase price to remain at $1m but the sellers to give back $50k at close ? That way, the buyer gets the $50k they need to make up the deposit.

Assume buyers are good from a servicing perspective but need the deposit. They would also pay stamp duty on the $1m.

I cant think of any victims here but at the same time it feels a bit “off” - welcome thoughts.

 

Can they negotiate a smaller deposit? We took 5% on our last sale.