When the deposit should be with the solicitor? Exchange date or completion date?
I'm buying a property and need to transfer the deposit to my conveyance solicitor. Do I need to transfer the money to them before the exchange date, or just before the final completion date? I know that there are often 2 weeks between these two dates.
deposit is the money I paid to the bank for the mortgage (i.e. mortgage deposit).
- CliveLv 76 years ago
The deposit is NOT what you pay for the mortgage. It never goes anywhere near the bank. It's what you pay yourself towards the house, and the mortgage makes up the difference. You pay it to your solicitor, and they pay it to the seller's solicitor, who will hold it as independent stakeholder until completion.
The terms of the standard house purchase contract are that you pay the deposit when contracts are exchanged, so your solicitor will need to have it before that so they're all ready to exchange when YOU are. Upon exchange, you are committed to the deal and lose your deposit if you change your mind later. Then on completion day, the bank releases the mortgage money and that plus the deposit both go to the seller. Now they have the agreed price and you have the house.
It is at exchange of contracts that the completion date is agreed and written into the contract. The reason why it has to be done this way is that traditionally, there was more paperwork to do after exchange and before completion, to "deduce title" so your solicitor can be satisfied that the seller really owns the house and has the right to sell it. Again traditionally, this would take "the usual month". But now that most houses have registered ownership, there is no need to deduce title as your solicitor has already seen the land register of the house and there is no "deducing" to be done. The register shows who owns the house and that's that. So the only thing left to be done is a Land Registry pre-completion search to make sure the seller hasn't sold it to someone else behind your back, and you can complete quicker than "the usual month".
Of course your solicitor will do all this but I just add this in because it's nice to know what your solicitor is supposed to be doing!
- Nosy ParkerLv 46 years ago
Maybe you should stop worrying so much. Your solicitor will tell you when you have to pay the deposit, that is why you hired him. He is there to advise you - no point in hiring a solicitor if you want to guess when things will happen.
You will pay the deposit over when the contracts are exchanged between you and the seller. Once the deposit is paid over, if you change your mind, you will lose your deposit and if the seller changes his mind you can sue him.
Just be patient and wait for your solicitor to tell you what to do and when, that is their job.
- Anonymous6 years ago
Before exchange. If you miss the completion date you will have huge penalties imposed on you. Your solicitor will confirm.
- blackgrumpycatLv 76 years ago
It is usually for exchange. It will then be held by the solicitor until completion.