[Closed] A quick question for conveyancing people..RE house purchase

Scottish or English sale?

Unusual....all fees & stamp duty paid once all the money has been exchanged at completion has been the case on all (English) house moves we've done including our move in November 21

English..

@nuke I wonder if i'm misreading the letter, as your experience is also mine.

Will email tehm to check!
Anyway, i can't magic the money, so will watch this space eh!

DrP

Lol. Sounds well dodge
Having just spent 7 months trying to sell my mother in law’s house to find after 6 1/2 months that the buyer’s finances aren’t what they seem after all and perhaps they don’t have the money nothing surprises me.
Can you use a different solicitor? The one acting for us was excellent. Lucky one side was competent.

SO you need £850 of which £700 is not in your possession. You have £100...where's the other £50 coming from?

Assuming that's all sorted. It sounds like you'll need a bridging loan to get you to £130+ for the fees/deposit.

EDIT Our solicitor wanted proof of capability to complete including the deposit, SD fees and conveyancing fees transferred.

That's nonsense, as said, Stamp-duty is payable after the sale (you have 14 days in law to file and pay SDLT, and I bet the solicitor will hold on to that for 13 days...) They might ask for proof of your savings, but they don't need the cash.

yeah, sounds weird. When we bought a couple of years ago, might have paid the solicitors fees up front (can't 100% remember, the money was certainly there in bank) but everything else - deposit, SD etc, relied upon [I]things happening[/I] so all the money kind of came together at once (we exchanged/completed on same day).
Never even [I]heard[/I] of an "exchange deposit" up-front before! And certainly didn't have to pay one - just demonstrate that the money would become available (and from where) for the deposit i.e. non-mortgage portion of the purchase.

As per Daffy's post, £300 equity + £100 savings + £400 mortgage equal the £800 purchase price. Where's the £50 stamp duty coming from? Do they want evidence you can pay?

Sorry...my figures are examples and I agree, don't add up!

Essentially, we have enough money for all the costs EVENTUALLY, but NOT prior to the sale of the OH's house..
I'm hoping that i'll speak to the solicitor and they confirm that not all fees and stamp duty need to be available prior to the sale of her house..

Also..is it odd that I'm being asked for a 10% exchange deposit?? It's a hefty old sum we're being asked to pay up. Obvsiously it'll go towards the house, but.. is it odd?!

DrP

Edit.. from which, so not unusual it seems..
"What is an exchange deposit?
When contracts are exchanged, you'll need to pay an exchange deposit to the seller. This is usually 10% of the property price, which might be different from the amount of mortgage deposit you're putting into the property.

If you've got a bigger deposit than 10%, you'd normally pay 10% at exchange and the remainder when you complete."

Isn't there some scams like this, or am I thinking of something else?

Maybe phone your solicitor and check they actually want the money.

Letter by email, or letter by post?

Phone them to double-check it's correct and make sure your email hasn't been hacked.

We're selling at minute and nothing like this has been mentioned. All we were asked to do is provide proof of funds. In our case all funds are coming from the sale of our house, and we're buying a slightly cheaper one.

I understood all financials, bills etc were taken care of on day of completion, unless you exchange contracts before completion date.

unless you exchange contracts before completion date.

Which we are..Exchange and completion on teh same day is quite rare I thought?

DrP

Which we are..Exchange and completion on teh same day is quite rare I thought?

Not so much nowadays. We sold my late mother-in-laws house a couple of years ago and that was exchange/complete on same day.

Think it depends on the chain.

Regarding disbursements, make sure they are using the new Land Registry fees which were introduced at the start of Feb when calculating their completion statement.

Holding on to the stamp duty cash to the last minute would be a bit naughty as it might trigger an embarrassing late payment penalty notice from HMRC to be sent to the purchaser of the property. Also, if it needed to be sent the same day a faster payment or CHAPS fee might be involved and it that was claimed for by the solicitor on their invoice I'd be unhappy.

Ref the 10%, I questioned this recently as our 10% deposit comes from the deposit our buyer pays and our house is worth less than the one we are buying. Our solicitor advised that the deposit we ‘receive’ will be forwarded up the chain, but we will be liable for the full amount should we fail to complete after exchange.

Exchange n completion on the same day is more common than you think. Especially in covid times.

Exchange n completion on the same day is more common than you think. Especially in covid times.

Yep, done it twice.

Forgot how expensive conveyancing is though. Almost £800 premium to have the solicitor within strangling distance, which is essential IMHO.

Just bear in mind also that this is a fairly common scam. Not saying it is the case here however worth picking up the phone and calling the solicitors to check. Basically the scam goes 'Solicitors here - your house purchase is about to complete and we need £££££ in the bank now please'. Buyer transfers the money never to be seen again.

People have lost their deposits and more via this method so worth double-checking. And yes, when we bought the current house the sols knew a lot of the disbursements would come from the sale of our current house.

Even deposits are often passed up the chain as they are often tied up in the current property's equity.

Deposit on exchange is common but it doesn't have to be 10%, especially on expensive houses as it is quite a chunk of cash. I'd also make sure you know how it is protected.

We recently bought a new build where exchange tends to be months before. They wanted 10% but our solicitor was ace and negotiated it down to 5% without us even asking 🙂 The guarantee / warranty on new builds also covers the deposit if the builder goes pop.

Deposit on exchange is common but it doesn’t have to be 10%, especially on expensive houses as it is quite a chunk of cash. I’d also make sure you know how it is protected.

Deposit on exchange is a requirement of the contract. It is the entire point of the deposit! It is protected as the solicitors have to hold it in a client account which is protected if the solicitor goes pop.

On exchange it gets sent to the seller's solicitor who also has to hold it in a client account.

It only goes to the actual seller (or their mortgage co!) on actual completion so is as safe as such things can be...

Deposit on exchange is a requirement of the contract. It is the entire point of the deposit!

The deposit is the entire point of the deposit?

But is it refundable???

I think technically, no...
It's a commitment to buy at the exchange point...

DrP

Is the same solicitor handling the sale & purchase? If not, I can see why they are asking. If so, I would expect them to be able to calculate the equity and confirm that can be used against the total bill.

We bought in October, with exchange and completion a couple of weeks apart. 10% deposit was required in their account before they would exchange, and then the rest of the deposit, stamp duty and solicitors fees all required up front before completion - I think this is fairly normal.

No the exchange is a legal contract and you are committing to complete. 10% is standard. If you default then you lose the 10%. You might be able to argue mitigating circumstances with your seller to reduce the 10% but it’s basically at their discretion. Guess how I know all this stuff. Stressful time buying/selling houses

We've not done a house sale-and-purchase on the same day; and always done exchange of contracts 14 days before completion. We have always given a ~10% deposit in cash of the agreed purchase value about 2 weeks ahead of completion (3 times in England, the exact amount of deposit is negotiable to some extent as it covers things like the solicitors fees and fees to removal companies, storage and/or overnight accommodation and so on, if the buying party were to screw up or pull out on day of completion - if the other way around you have to sue).

OP, if the same solicitor is dealing with the sale and the purchase, and you have been clear you are a chain and the purchase cannot go through without the sale (which is pretty obvious from your rough example) then they should be able to take the SDLT from the sale cash on completion. As others have said above, perhaps they just need confirmation of where the total sums are coming from.

Just bear in mind also that this is a fairly common scam. Not saying it is the case here however worth picking up the phone and calling the solicitors to check. Basically the scam goes ‘Solicitors here – your house purchase is about to complete and we need £££££ in the bank now please’. Buyer transfers the money never to be seen again.

How does that work? Surely you will have the solicitors bank details from when you paid their retainer? Not claiming to know better - on the contrary, just sensitive as I'm about to buy a house ....

ps - my question about conveyancing is why does it take so flippin' looooong??

The scam: Someone has your personal (hotmail, gmail) email account details and password, or that of the solicitor, and watches the emails coming in and out of your account. At the point they see the solicitor is gearing up to exchange, they send a spoofed email with their own bank details, asking for the deposit / cash due for the sale. It looks legit and is timed well enough (because they have been watching your emails) that you make the transfer. We were warned about this when we last bought (about 3 years ago) and on receipt of the email request, I called the solicitors and confirmed the bank sort code and account number again. The receptionist had no issue doing this and I think might have said it was quite common for people to check, since it's such a large sum of money and the banks want to put the onus on the transferee to get the numbers right!

You don't really pay a retainer you pay all the solicitor's fees after completion or at least that was my experience. We transferred them one lump sum that covered their fees and our deposit. We were first time buyers though so didn't have an existing house involved.

You don’t really pay a retainer you pay all the solicitor’s fees after completion

I did. Twice! Maybe that was the scam 🙁

The scam: Someone has your personal (hotmail, gmail) email account details and password, or that of the solicitor, and watches the emails coming in and out of your account. At the point they see the solicitor is gearing up to exchange, they send a spoofed email with their own bank details, asking for the deposit / cash due for the sale. It looks legit and is timed well enough (because they have been watching your emails) that you make the transfer. We were warned about this when we last bought (about 3 years ago) and on receipt of the email request, I called the solicitors and confirmed the bank sort code and account number again. The receptionist had no issue doing this and I think might have said it was quite common for people to check, since it’s such a large sum of money and the banks want to put the onus on the transferee to get the numbers right!

I was worried about this! Possibly over cooked it, but I went to the solicitors and got them to write it down on a piece of paper. Then on the day I sent a £10 test transfer first, phoned them to confirm they had it, then stuck the rest over. Probably paranoid but it was several hundred grand and the most money i've directly dealt with in my life!

The scam: Someone has your personal (hotmail, gmail) email account details and password, or that of the solicitor, and watches the emails coming in and out of your account. At the point they see the solicitor is gearing up to exchange, they send a spoofed email with their own bank details, asking for the deposit / cash due for the sale. It looks legit and is timed well enough (because they have been watching your emails) that you make the transfer.

They normally hack the solicitors email and sit waiting patiently, then swap the details over mid way through the process, changing bank details and / or phone number.

This happened to one of our previous suppliers at work (world's 3rd largest contract manufacturer). They hacked the companies email and changed the invoice details mid transaction. Didlled my ex employer for $1.3m in three payments. What was shocking was that one of the finance team flagged it as possibly fraud (spotting the bank account had changed), but CFO over ruled. Then our bank (Barclays) flagged it as possible fraud (as bank account of our largest supplier had suddenly changed after 20 years of being the same), CFO over ruled three times in a row. Then the real supplier emails to say where are our payments as we're late on the account. What was worse was CFO kept his job (until the company folded not long after).