When does money need to be in place?

fishpond

Had a phone call from my solicitor requesting that I start getting the deposit and main monies over to his firms bank account for this property purchase.
Just to refresh my memory:- Does all of the money need to be in by exchange or by completion?
Many Thanks

arbrighton

Deposit (and often sols' fees) usually need to be in place for exchange, then other funds for completion but if short gap between the two, or to avoid paying extra transfer fees, send all over before exchange. We did this as cash buyers and two different accounts each to avoid paying 4 fees of 30ish quid each

mandm65

thats a good point of making sure that funds drawn from a single account to minimise the transfer fees and yep i would agree that deposit on exchange and balance on completion.

moneyistooshorttomention

There will be other costs to bear in mind too, ie as to when the money will be expected.

In my case, my removal firm tells me that they require a 50% deposit when I book them and the other 50% on Moving Day. Hence I need around £900 available instantly for the "date I book them".

Personally, I've had to hand over £340 search fees etc to my solicitor the second I officially booked them up and am expecting to hand over the rest on Completion Day.

My estate agent requires their fees on Exchange of Contracts Day.

I'm taking the precaution personally of having all remaining monies of every description (apart from the 10% deposit at Exchange of Contracts Day) that I will need for what I call Swopover Costs sitting there in my bank account ready to pay out as and when required (but then I am in a position to do so and I do appreciate that some people won't actually have things like balance of solicitors money and/or removers fees available until Completion Day).

The one thing that has been a surprise to me is to find that buyers with less than 10% deposit (ie the standard non-refundable deposit required at Exchange of Contracts date) might try and expect their vendor to accept less than the 10% due to THEIR personal financial circumstances. "No way Hosea" would probably sum up the average vendors' expectations in this respect (ie thinking any vendor might "carry the can" of them having a lower percentage deposit on the one hand, whilst THEIR own vendor will probably require that standard 10% deposit on the other hand)...some mothers do 'ave 'em...

My own 10% deposit at Exchange of Contracts day that I expect my vendor to require will come from passing my own buyers' 10% deposit "up the line" to them.

TeamLowe

moneyistooshorttomention wrote: »

The one thing that has been a surprise to me is to find that buyers with less than 10% deposit (ie the standard non-refundable deposit required at Exchange of Contracts date) might try and expect their vendor to accept less than the 10% due to THEIR personal financial circumstances. "No way Hosea" would probably sum up the average vendors' expectations in this respect (ie thinking any vendor might "carry the can" of them having a lower percentage deposit on the one hand, whilst THEIR own vendor will probably require that standard 10% deposit on the other hand)...some mothers do 'ave 'em...
.

Of course if the vendors did say 'no way Jose' then the buyers could say 'well we don't have any more money right now, our mortgage was agreed with a 5% deposit and aren't willing to stump up more for no benefit whatsoever to us and because of YOUR personal circumstances and your onward purchase' and so they risk the sale of their house. now which is worse, less money on exchange or no exchange at all...
negotiation is always key

OP- we've just sent our solicitor our deposit and he's not asked for fees but ours is a fee free purchase, I assume disbursements will be paid at completion as it would be sensible to pay for the total. we paid for the searches in advance though

G_M

If you transfer in timeyou can use Faster Payments and save the £30 CHAPS Transfer fee.

Check the limit your bank applies to FPs though and do it over 2 or 3 consecutive days if necessary.

The interest you lose by transfering a dayor 2 earlier will be minimal.

moneyistooshorttomention

TeamLowe wrote: »

Of course if the vendors did say 'no way Jose' then the buyers could say 'well we don't have any more money right now, our mortgage was agreed with a 5% deposit and aren't willing to stump up more for no benefit whatsoever to us and because of YOUR personal circumstances and your onward purchase' and so they risk the sale of their house. now which is worse, less money on exchange or no exchange at all...
negotiation is always key

'Tis true obviously that a buyer might be prepared to take the risk that their own vendor might (or might not) be prepared to "carry the can" of taking a lower than 10% deposit at Exchange.

Personally, if I were in Buyer position I wouldn't want to take the risk that my own Vendor wouldn't be able to get their own Vendor to accept lower than 10%, as I very much doubt that most Vendors could or would accept a lower deposit if their own vendor was still expecting that standard 10%.

I know I personally could subsidise my own buyer by "lending out" a missing 5% in the direction of my own vendor still expecting that standard 10%, but I would instantly start wondering about why my own buyer had been so unprepared for "standard terms" that they thought it was acceptable for me to make up THEIR shortfall to my own vendor. Many vendors simply won't even have the option of "making up the difference" to their own vendor and would have to tell their own buyer "Sorry mate...my own vendor won't take less than 10%...so you gotta get with it or forget it and I will find another buyer".

The system goes the FTB provides a 10% deposit at Exchange (totally regardless of how much deposit they are actually paying on the house) and this deposit is "passed up the line" to their vendor on to their vendor on to their vendor and so on ad infinitum until the FTB'ers deposit reaches the "top of the chain" person. The second-in-line person upwards only have to find 10% of any difference between the deposit "passed up" from the FTB'er and any higher cost they are paying for the house they are purchasing.

Example being:
- if I'm the one who has an FTB'er buying from me, then they hand me say £17,000 as 10% of the cost of my house

- if I then go on to purchase a house for £250,000 then I have to find £25,000 deposit at Exchange for my vendor (this will then be my FTB'ers £17,000 "passed up the line" and a further £8,000 from myself)

and so it goes on...