Selling house privately - can I 'just' accept a bank transfer?

eddddy

KimAlexa18989 said:

Would it cause us issues when buying a new house, if we were able to sell it privately? I.e., would we have sufficient proof of where our house sale money has come from? 

Are you selling and buying at the same time (i.e. on the same day)? And are you buying using a solicitor?

Or are you doing something like: Selling - Moving into temp accommodation - Buying?


Your solicitor might still be concerned that you are involved in a money laundering scheme.  For example, your friends have acquired their money through drug dealing, they've used the drug money to buy a property from you, and you're using the drug money to buy a new house.


On a different topic, the reason people don't usually trust a simple bank transfer for a property sale, is that it's easy for somebody to be cheated.

e.g. The buyer transfers the money, but then the seller refuses to hand over the house. Or the seller hands over the house, but then the buyer refuses to transfer the money.

(Obviously, the cheated party can take the other party to court - but that might take weeks or months - and meanwhile the cheated party has no house and no money.)

KimAlexa18989

Thanks everyone. Really appreciate it.

My friend has proof of where all the funds have come from for her to buy our house but it definitely seems the safer option to use a solicitor. 

Will close this thread as I think that will be our preferred route. 

newsgroupmonkey_

You mentioned in the original post that you were looking to use a conveyancer.
Normally, your friend would give them the money. They in turn give it to you (and charge you for the privilege)

This might seem a bit odd, but it just covers everyone. Whilst I'm sure you and your friends are absolutely tight and wouldn't let things go wrong, they often do. Even with people you know.

I mean, there's a thread here from yesterday where someone's brother gifted them a deposit and is now threatening legal action to get the money back!

MobileSaver

Hedgepigs said:

No mortgage on our current home as we have paid it off but we would use cash from this house sale plus a small mortgage on a new house.

I don't know, but I can imagine your new mortgage lender potentially being a bit prickly about source of funds for the deposit on your onward purchase. Are you buying and selling at the same time? 

I don't know the answer but would the new mortgage lender know or care where the previous buyer's funds came from and/or whether a solicitor was involved in the conveyancing?

The OP has proof they sold a house for £xxx and now has £xxx in the bank to use for the deposit and onward purchase, would a new lender typically (or even ever) want confirmation the OP's previous buyer's funds were legit?

user1977

MobileSaver said:

Hedgepigs said:

No mortgage on our current home as we have paid it off but we would use cash from this house sale plus a small mortgage on a new house.

I don't know, but I can imagine your new mortgage lender potentially being a bit prickly about source of funds for the deposit on your onward purchase. Are you buying and selling at the same time? 

I don't know the answer but would the new mortgage lender know or care where the previous buyer's funds came from and/or whether a solicitor was involved in the conveyancing?

The OP has proof they sold a house for £xxx and now has £xxx in the bank to use for the deposit and onward purchase, would a new lender typically (or even ever) want confirmation the OP's previous buyer's funds were legit?

The lender would need to know the funds were (now) the OP's. Beyond that, identifying the source of funds is more of an issue for the solicitor than the lender.

propertyrental

A lot of very negative responses. Perhaps it's wise to be ultra cautious but I'd be more positive.

* To protect yourself, don't hand over the signed TR1 to your friend till their money is safely in your bank. I did this once. We (me and buyer) met in the bank office. Once the clerk confirmed the money had arrived, I handed over the TR1

* no mortgage so no complication there

* I don't see  money laundering problem. When you buy, you show your solicitor the source of your funds = sale of property. In case they really want more eg source of your friends funds, well, you could ask friend to give you details of where they got their purchase money before you complete, just like a solicitor would.

* your buyer pays SDLT (within 14 days) if applicable. Even if none due they still have to send HMRC a SDLT return. See here

* once SDLT dealt with, they send TR1, AP1, ID1 and HMRC confirmation to the Land Registry

Sorted.

lindos90

You say you plan to use the money from the sale as a large deposit for your next house. (Which I'm guessing you will be buying with a solicitor) 
You can't buy it until you have the money from your sale, your f uend can't move in until you are moving out. Personally, because you need a solicitor for your purchase, for the sake of a few hundred pounds it makes sence to use them for the sale too. Things would all be coordinated and hopefully run smoothly then. But then I'm quite risk averse and would worry too much about things going wrong otherwise. 

user1977

propertyrental said:

* I don't see  money laundering problem. When you buy, you show your solicitor the source of your funds = sale of property. In case they really want more eg source of your friends funds, well, you could ask friend to give you details of where they got their purchase money before you complete, just like a solicitor would.

I would want to first check what those details are going to look like though. We've had previous examples of here of apparently innocent things like "savings" involving a transfer of cash, making the thing unverifiable and starting alarm bells ringing.

RAS

The OP is looking for a small mortgage on their new house.