When do solicitors ask for payment from a buyer?

[Deleted User]

First time buyer here. I'm in the position where I want to make an offer on a property which will be funded by cash from the sale of a property (probate) which has already been agreed and is progressing but I am completely penniless until the sale completes!

If I was to have an offer accepted and instructed a solicitor for the purchase, would they typically require any payment up front e.g. for searches, or do you normally pay them everything in one go when they have finished all their work on the purchase? I guess I would need money for a survey in any case, which I don't have.

I don't want to make an offer and then be stuck because I have no immediate access to funds. :embarasse

kingstreet

£250 for searches fairly early on, deposit ahead of exchange of contracts and balance, fees and stamp duty in advance of completion.

tiger_eyes

My solicitor didn't start work until I'd paid in advance for searches, and I had to pay further instalments throughout the process. The solicitor will need to make disbursements to third parties and they may not be thrilled to do so on credit.

From the solicitor's perspective, if you're depending entirely on the proceeds of the house sale to pay them, you're a serious risk if the sale falls through - making it possible they won't get paid at all for costs incurred and work done.

On top of the legal fees, searches and other disbursements, and survey costs, also factor in mortgage arrangement fees (if any), moving costs, etc.

I don't think this is doable without funds.

moneyistooshorttomention

My firm of solicitors (of which I got someone who turned out to be a legal executive) asked me for around £300 as I recall pretty much at the outset (ie when I swopped house about 2 years back). The balance of what they wanted from me (their fees/stamp duty/estate agent fees came out come the end). In my case - the vast majority of the costs were coming out from the leftover balance of "house equity money" that had been tied-up in my starter house in dear location and then got transferred over into buying a detached/etc house in cheaper location.

My solicitor firm took the money I had been paid for Starter House, deducted the balance of their bill/the stamp duty/my estate agent fees (which they paid to my EA on my behalf) from my leftover house equity money at the end of it all. They then credited the balance of the house equity money from my Starter House back into my bank account after it was all over.

So - my circumstances were that I had thousands of £s over from the "house equity" money tied-up in that starter house AFTER I'd covered all those costs of buying better house in cheaper location.

In those particular circumstances - I only had to worry myself about that £300 odd that that my firm of solicitors wanted upfront and the fact that my removal company also wanted a substantial chunk of their money upfront. All the rest of the "swopover costs" (as I call them) came out of that leftover "house equity" money from selling my starter house.

The "swopover costs" were about £9,000 all told (including removal costs to quite some distance away in Britain) and I had to find that around £300 for the solicitor upfront and a fair chunk of the removal firms bill. I think the total upfront costs were somewhere between £1,000 and £1,500 as I recall (ie just as anticipated).

So - basically that part, at least, of swopping house went according to plan. My vendor demanded the standard 10% of the price I had agreed to pay for the Next House out of me in the course of this - but I had enough money in savings at that point in time to cover the fact that I had to "lend out" 10% of cost of Next House before I had been paid for Starter House. It was only a few weeks.

In your position - I think the biggest concern is that most vendors will either expect or need that standard 10% deposit at Exchange of Contracts time. The solicitor bill isn't likely to be a problem - if they follow standard practice.

SmlSave

Money on account when you instruct with your id and paperwork.(completed questionnaires)

Deposit when you are close to exchange

Full remaining balance at least a day before completion.

moneyistooshorttomention

SmlSave wrote: »

Money on account when you instruct with your id and paperwork.(completed questionnaires)

Deposit when you are close to exchange

Full remaining balance at least a day before completion.

Goes to show how variable firms are on this then - ie I didn't have to hand over that "full remaining balance" until after Completion personally with the firm I had.

Hence - its clear that people need to know there are these variations in practice and ask the firm they personally are using what will happen in their case.

I believe that the way things were in my case is the "standard practice" on these things as far as I can tell - but it is a good idea to check in case your particular firm follows a worse practice than "yer usual practice".

Good to know this - and I will certainly check the position if I ever sell Current House and move again. All the more so - as, if I did move again, then it would be to a dearer house and back across the country again (ie so no surplus "house equity money" coming into it that time).

davidmcn

moneyistooshorttomention wrote: »

Goes to show how variable firms are on this then - ie I didn't have to hand over that "full remaining balance" until after Completion personally with the firm I had.

Think there might be a misunderstanding, unless your solicitors were generous enough to lend you money so you could complete your purchase?

Thrugelmir

[Deleted User] wrote:

I don't want to make an offer and then be stuck because I have no immediate access to funds. :embarasse

Probably best to wait until you've certainty as to when the funds will be available.

chappers

davidmcn wrote: »

Think there might be a misunderstanding, unless your solicitors were generous enough to lend you money so you could complete your purchase?

I would agree. any sort of credit, from a solicitor would be very unusual and not really in their nature, they generally only like to deal in certainties.
The conveyancing solicitor we used to use, worked in the practice where my father in law was one of the senior partners and my brother in law also a partner and he never gave us any credit in about ten deals, very cheap deals yes but credit, not a penny.

Brown_Eyed_Girl

Your solicitor tends to only ask for the search fees up front £300. But both they and your mortgage lender will want you to prove you have the rest of the funds to complete the deal. Not sure how that works with probate so you'll want to check what they will need from you. Worth calingn round and getting quotes

moneyistooshorttomention

Brown_Eyed_Girl wrote: »

Your solicitor tends to only ask for the search fees up front £300. But both they and your mortgage lender will want you to prove you have the rest of the funds to complete the deal. Not sure how that works with probate so you'll want to check what they will need from you. Worth calingn round and getting quotes

Was beginning to wonder if I had mis-remembered the procedure - though it was only 2 years ago:rotfl:

But...yep...that £300 or so upfront (which, as I recall, was search fees). I employed/paid my surveyor in standard way upfront.

What I had to have/pay in advance was:

- That £300 or so upfront to solicitors (search fees as I recall)
- The money to pay my surveyor
- 50% of removal firms fees they wanted upfront

Sum total of what I personally had to find myself upfront came to around £1500 (searches/surveyor/removal firm).

The 10% of purchase price of Present House that the vendor asked for (as anticipated) came from the 10% I asked the buyer of my Starter House for at Exchange of Contracts time (ie my buyer paid the 10% and it was passed up the ladder).

As for the rest:
- I wrote out a cheque on Day of Completion/Moving Day to the removal firm for balance of their bill
- The solicitor/legal executive deducted the balance of their bill after Completion (in my case from the money left over after purchase of Current House - because of coming to cheaper house). They also deducted the money to cover my estate agent fees and paid it to my EA before forwarding "leftover" money back into my bank account.

Not sure what would have happened if I were moving to dearer house or buying a house in the first place. Maybe its at those points that a solicitor firm might ask for all their money in advance???