Is it possible to lose a deposit?

jennfercain

Hello

I'm a FTB so this question may sound silly to the more experienced home buyer! I want to know whether its possible to lose my deposit, what if the people we're buying off backed out at the last minute once we had given our deposit (£7000) to the solicitor? I've head about a penalty they may have to pay but would we still get our full deposit back?
This will probably never happen but I still want to know just so I can prepare myself for the worst!

All advice apriciated!:money:

Richard_Webster

I'm tempted to say "Ask your solicitor!" I find so many people posting queries here when their solicitor can easily give them the answer.

The critical point is exchange of contracts which happens after you have signed the contract and given your solicitor the deposit. At that point the sellers are legally bound. Assuming there is no-one else in a chain above (then it gets a little more complicated), your solicitor sends the depsoit to the seller's solicitors. They have to hold it as what are called "stakeholders" and cannot release the money to their clients.

If, once they have exchanged contracts, the sellers don't go through with the transaction on the day of completion then your solicitor will send an official "notice to complete" and then have about 14 days to complete (depending upon the precise wording of the contract) and at the end of that period your solicitor can ask for the money back and the seller's solicitor has to send it back. This very rarely happens.

What is a bit more common is that you are hoping to exchange contracts having signed everything necessary and given your solicitor the deposit, but the seller then changes his mind before contracts are actually exchanged.. In that event your solicitor has still got the money - he's YOUR SOLICITOR - he will send it back to you as soon as you ask for it.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients