Should my solicitor hold my buyer's deposit?

markb1_2

When should a solicitor pass on the deposit received on exchange? My solicitor has told me that they hold on to it until completion and then pass on the full balance at that point, but a friend who is seemingly very knowledgable about these things says that they should pass on the deposit straight away. This would make more sense as if someone was buying a property at the same time they would need that deposit for their new property.

Any insight would be much appreciated.

wifey24

Solicitors are the ones that hold the money after exchange and will only pass on the money to the vendor at completion. If the vendor is also purchasing a property, the deposit money can move up the chain from one solicitor to another. If you are buying a more expensive house and you have agreed to pay the full 10%, you might have to add money to top up your buyer's deposit.

Cornucopia

It used to be the case that deposit funds would pass up the chain at the point of exchange of contracts.

These days, that doesn't usually happen. Instead, the buyer's solicitor promises the seller's solicitor that they are holding the agreed deposit, and both parties also agree that it will be forfeit in the event of non-completion.

G_M

So to answer your question, the deposit is held by one or other of the solicitors involved, and not passed to the client till Completion.

markb1_2

Thanks for all the replies, which agree with my own further research, much appreciated