Quizzes & Puzzles3 mins ago
Selling house - deposit
We are selling our house and I believe that it is usual for a deposit to be made by the buyers as the completion date approaches.
Will we see this deposit or is it held by the solicitors? If we won't actually see it can we request a sum of money from it?
I ask as we are moving into rented in the short term to take away any forward chain and this would pay the deposit.
Thanks.
Will we see this deposit or is it held by the solicitors? If we won't actually see it can we request a sum of money from it?
I ask as we are moving into rented in the short term to take away any forward chain and this would pay the deposit.
Thanks.
Answers
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Not sure if it is different in England, but I can't think why it would be - but here in Scotland, the answer is no. You are not required to pay a deposit unless you are paying for a new build off plan and it is then basically a reservation fee.
What happens is that the solicitors will ask for evidence of ability to pay from the other parties solicitors - this is usually a confirmation of mortgage letter together with information on any other funds needed to make up the total sale price - e.g. from savings, or from proceeds of another property. The bank/building society may choose to pay in their share of the purchase money the day before completion, but both the mortgage money and any other funds are only required to be with the solicitor in cleared funds on the sale date. That way, he has the funds available to pay for your new property, or to hand on to you. If you have a property purchase pending then he may request to hold the money until that goes through, he will have to provide evidence of your ability to pay to the other parties solictor from who you are buying.
Usually when you are buying and selling and using a mortgage to part pay, you never see any of the money unless of course you are down sizing or reducing in property value and you will get the remainder back.
I would find some other way to pay your rent deposit.
What happens is that the solicitors will ask for evidence of ability to pay from the other parties solicitors - this is usually a confirmation of mortgage letter together with information on any other funds needed to make up the total sale price - e.g. from savings, or from proceeds of another property. The bank/building society may choose to pay in their share of the purchase money the day before completion, but both the mortgage money and any other funds are only required to be with the solicitor in cleared funds on the sale date. That way, he has the funds available to pay for your new property, or to hand on to you. If you have a property purchase pending then he may request to hold the money until that goes through, he will have to provide evidence of your ability to pay to the other parties solictor from who you are buying.
Usually when you are buying and selling and using a mortgage to part pay, you never see any of the money unless of course you are down sizing or reducing in property value and you will get the remainder back.
I would find some other way to pay your rent deposit.
Before completion, contracts are exchanged.
Exchange can happen at any time before completion, but normally happens just before (on the same day).
On exchange, a percentage (about 10%, can be more, can be less) is paid - this is the deposit you refer to.
Depending on the circumstances, exchange can happen way before completion - e.g. when you commit to buy a house that's not yet built.
Whether or not you can have this money depends on the mortgage arrangements - ask you solicitor.
Exchange can happen at any time before completion, but normally happens just before (on the same day).
On exchange, a percentage (about 10%, can be more, can be less) is paid - this is the deposit you refer to.
Depending on the circumstances, exchange can happen way before completion - e.g. when you commit to buy a house that's not yet built.
Whether or not you can have this money depends on the mortgage arrangements - ask you solicitor.
For England & Wales, I agree with Vagrant.
The deposit of typically 10% is held by the solicitor and is a surety that enables your solicitor to extract funds in the unlikely event that the buyer fails to complete the transaction on the agreed date - there are terms within the contract that was set-up (on the date of exchanged contracts) that bind both parties at that point.
It is most unlikely that you can have early release of these funds - see what your solicitor says.
The system is different in Scotland.
The deposit of typically 10% is held by the solicitor and is a surety that enables your solicitor to extract funds in the unlikely event that the buyer fails to complete the transaction on the agreed date - there are terms within the contract that was set-up (on the date of exchanged contracts) that bind both parties at that point.
It is most unlikely that you can have early release of these funds - see what your solicitor says.
The system is different in Scotland.
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