Direct money transfer (275k) between the buyer and seller.

BobJenkins

I've decided to complete my own conveyancing on what should be a relatively simple cash-based house sale. Unfortunately we identified a potential stumbling block when it came to the transfer of our cash fund consisting of legitimate money held in UK banks. We became aware that the vendors solicitors may not accept our money because we're not solicitors ourselves - fair enough.

Additionally before deciding to undertake the conveyancing process we instructed a solicitor to act for us, unfortunately on receipt of their detailed terms and conditions which stated they had power to seize our entire (275k GBP) cash fund if we couldn't prove the sauce, we decided that was not an option. We appreciate this makes it seem like we're hiding the source of our money but the fact is our finances are held in UK bank accounts and are on the complicated side. The money has been acquired over many years via a number of different sources - investments, savings, pensions, inheritance, earnings etc - and is retained in more than one bank account. As such we're concerned it's going to be difficult to prove the origin of every single pound to satisfy a solicitors onerous AML checks - once this solicitor has our money we enter a very weak position which we will not entertain.

At this point the house sale is looking unlikely due to this problem so we're wondering if there is any feasible ways around it - are there any laws on direct bank transfers between a vendor and buyer in terms of a 275k house purchase?

HampshireH

You would be expected to go through money laundering checks. Also imagine your bank wouldnt just send this amount.

I did chuckle at the sauce. I read it 3 times wondering what new phrase I wasn't up to speed on.

Generally you just need to prove an accumalation  of funds and pay slips for example.

We were gifted a small amount which was inheritance. My dad had to prove it was an inheritance. It wasn't difficult to do

steampowered

Presumably you have done the appropriate searches to satisfy yourself as to the ownership/legal status of the property and the person selling it? It's a pretty big risk to be a buyer without using a solicitor, even for a cash sale.

Solicitors are not interested in verifying every single pound. That is not what the AML regulations require. They are however required to verify the source of funds in line with AML regulations. Surely you would have some documentation as to where the funds came from.

Conveyancers (and other professionals) are required by law not to return funds which are suspected to be the proceeds of crime so I don't think you'll find any different from other conveyancers.

The best way around the issue you have identified is presumably to satisfy the conveyancers' anti-money laundering requirements before you transfer the money?

There's no law against direct bank transfers, but using solicitors resolves through professional undertakings the "chicken and egg" situation of whether you pay the money first; or the vendor transfers the title to the property first. It also deals with the issue of what happens to the deposit if you have a gap between exchange and completion (which is normal and generally advised to give you certainty on the completion date). Your vendor/buyer may well insist on using a conveyancer in which case the conveyancer will want things done properly in the normal way.

I would also be concerned as to whether the property contracts (Standard Conditions of Sale) and land registry registrations are being handled property if you are trying to avoid using a solicitor. You'll need to get ID verification requirements sorted to be able to register with the land registry.

pinkteapot

If my buyer said they wanted to transfer me the sale price directly because they didn’t think they’d pass a solicitor’s AML process I’d run a mile...

I’m certain the vendor’s solicitor will advise them against it.

You don’t have to provide a trail of paperwork back to the moment each pound entered your ownership. Explain your fund sources to a solicitor and ask what documentation they’ll need - it won’t be as onerous as you think. 

Thrugelmir

Another post from the OP on the same topic
https://forums.moneysavingexpert.com/discussion/6105952/diy-conveyancing-solicitor-cash-transfer#latest

Thrugelmir

BobJenkins said:

 The money has been acquired over many years via a number of different sources - investments, savings, pensions, inheritance, earnings etc - 

Given the sum involved shouldn't be problematic to evidence the bulk of the source of the money. Wills are published online. Pensions are still in payment presumably. Investment holdings will have annual statements. 

trex227

I always remember when I first started working at a conveyancing firm taking a call from a guy who had given the seller £40k in cash in a suitcase to secure the property. The seller had then gone quiet. I don’t know what the outcome of that was as he didn’t use the firm. However I would consider transferring money directly, even though you will have a paper trail of the bank transfer, an enormous risk. If the seller doesn’t go through with the transaction after receiving your money your only recourse would be to take legal action to recover the money.

My spouse, who is a conveyancer, confirmed she always gets proof of source of funds well before money is received from clients. So as long as you have provided statements etc and ensured the solicitor is completely satisfied as to source of funds before sending the money to the solicitor I can’t see there would be any problem.

Slithery

Not going to happen - you need to employ the services of a solicitor/conveyancer.

BobJenkins

Are all conveyancing solicitors equal in terms of check stringency? If not how can I find one that's going to be more favourable to our concerns and work in our favour - I.E. somewhat 'less rigorous' for lack of a better phrase? Regarding fund transfer does this always occur after the checks are complete? I'm not adverse to using a conveyancer providing I can trust them - it's a matter of fact we got terrible vibes from this particular solicitors T&C's.

davidmcn

Alarm bells will start ringing if you shop around for a "fewer questions asked" solicitor.

I'm not sure exactly what you've read, but the solicitors don't have the power to "seize" funds: if they have suspicions then they'll report them to the authorities and may hold up the transaction until they're (usually) told they're free to proceed.

What's so difficult about verifying your source of funds anyway, generally solicitors are only going to look back a matter of months to check it's your money?

Slithery

My previous thread where I questioned the same thing...
https://forums.moneysavingexpert.com/discussion/5907529/self-conveyancing-an-auction-land-purchase