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selling and buying cheaper house

krishcanag7
krishcanag7 Posts: 12 Forumite
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in House buying, renting & selling
hello.


I was wondering as I am selling a house and downsizing to a cheaper house and expect to have cash of around 90k to be put in my bank account. There is at present a mortgage on my sale and very small mortgage on my purchase. but still I will have 90k for me.
Is this money directly from mortgage bank go into my account or via solicitor? what is to stop the solicitor taking the money?
krish
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Comments

  • eddddy
    eddddy Posts: 16,390 Forumite
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    krishcanag7 wrote: »
    Is this money directly from mortgage bank go into my account or via solicitor? what is to stop the solicitor taking the money?

    The money will go via your solicitor. Your solicitor will transfer the money into your bank account.

    In theory...

    - Your solicitor could steal your money
    - Your mortgage lender could steal your money
    - Your bank could steal your money
    - Your seller could steal your money
    - Your buyer could steal your house

    But the combination of the law, regulating bodies, insurance and the design of the conveyancing system makes all these things very, very unlikely.
  • AdrianC
    AdrianC Posts: 42,189 Forumite
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    Why borrow for the purchase, when you're taking so much equity out? This is a great opportunity to be mortgage-free.

    That apart, the money for your sale comes from your buyer's solicitor to your solicitor. He then pays off your old mortgage, and anything else needing paying, transfers any equity to your new purchase, and anything left gets remitted to you.

    If you don't trust your solicitor to do that, why are you using that solicitor?
  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
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    krishcanag7 wrote: »
    what is to stop the solicitor taking the money?
    The likelihood of legal action against them and no longer being able to practice as a solicitor.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
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    krishcanag7 wrote: »
    what is to stop the solicitor taking the money?
    Much the same things which stop someone at your bank taking your money.
  • pinkteapot
    pinkteapot Posts: 8,038 Forumite
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    We sold to rent temporarily last year and had a large sum transferred to us by our solicitor. It never crossed my mind that the solicitor might steal it!?

    What you should worry about is (1) making absolutely sure you give your solicitor your bank details correctly for the transfer and (2) the solicitor’s anti-fraud process to ensure a criminal can’t pose as you and give your solicitor new account details.

    You’ll probably have to give your solicitor your bank details when you fill in their initial forms. At that point, agree with them the process you’ll use if you need to ask them to pay into a different account. They should refuse to accept an email instruction alone. Our solicitor said that if we emailed to say our bank had changed then they’d phone us to confirm.
  • Doozergirl
    Doozergirl Posts: 33,800 Forumite
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    AdrianC wrote: »
    Why borrow for the purchase, when you're taking so much equity out? This is a great opportunity to be mortgage-free.

    If you can make it work harder than the interest you're paying, it's not a bad idea.
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  • AdrianC
    AdrianC Posts: 42,189 Forumite
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    Doozergirl wrote: »
    If you can make it work harder than the interest you're paying, it's not a bad idea.
    That's a VERY big if, especially after tax, unless you're introducing a reasonable degree of risk to the investment.
  • hazyjo
    hazyjo Posts: 15,469 Forumite
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    Just make sure you're taking all fees etc into consideration. I did the same a year or two back and it cost around £20k to move (stamp duty, EAs fees, solicitor, removals, mortgage costs, survey, etc).


    Following on from what pinkteapot says, not only must you double check your details, you should ring the solicitor to check their bank details. Please do not rely on what you might receive in an email. And make sure you ring the number you know is theirs, not one from an email.


    You should be more worried about fraudsters/scammers/hackers than the solicitor. They're usually pretty safe. Many stories can be found online. Not trying to scare you, it's rare, but you need to be cautious.


    Saying all that, a firm of solicitors I used were done for theft. Over £3m of stamp duty was kept and not passed on to the government. Thankfully I wasn't one of those cases, but did use them around that time! Hope that hasn't put the fear of God in you lol.
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  • FreeBear
    FreeBear Posts: 14,584 Forumite
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    eddddy wrote: »
    But the combination of the law, regulating bodies, insurance and the design of the conveyancing system makes all these things very, very unlikely.


    Unfortunately, theft of client's money does happen - https://www.todaysconveyancer.co.uk/main-news/solicitor-jailed-stealing-conveyancing-clients-money/
    However, the SRA has measures in place to protect funds - https://www.sra.org.uk/risk/outlook/priority-risks/protecting-client-money


    The biggest risk though is scammers targeting the solicitors with fake emails requesting funds are transfered to a different account - This is easily defended against by instructing the solicitor to never transfer funds without explicit written authority (i.e. Signed letter, not email) and checking the authenticity of the destination account.
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  • steampowered
    steampowered Posts: 6,176 Forumite
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    If the solicitor did steal your money, you would be protected by their professional indemnity insurance.

    If they didn't have professional indemnity insurance, you would be protected by the solicitors' compensation fund.

    The risk is pretty much zero. Certainly no more than the risk of the bank stealing your money.

    Taking out a new mortgage hardly seems worth paying the application fee, might be better to pay it off.
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