When do you pay your house deposit?

12/09/2018
The 10% deposit payable on exchange is what you'd most likely think of first regarding deposits and buying houses but there's quite a few other deposits you'll need to budget for (and know when to pay) during your conveyancing process. Read on and we'll explain what needs to be paid and when so that you can carefully budget the costs of buying your home.

The following are the main sums you can expect to pay

Click to find out more about these and when you can expect to pay them



Day 1 - £160 - Solicitors' deposit

Once you have found the property you want to buy then you'll need to find a solicitor to handle the legal work for you. Solicitors' fees range from £500 to £2,000 depending on the value and tenure of the property. Most solicitors will require a deposit to be made on account ranging from £160 to £300. Our solicitors take a deposit of £160 and for sale and purchase transactions, this deposit is covered under our no sale no fee policy. Read more about our No Sale No Fee Policy Here.

Day 1 - £% of property - Reservation deposit

Some estate agents require a reservation deposit to be paid to the seller in order to take the property from the market. This is very common for new build purchases and the reservation deposit can range from £250 to £2,000. Be careful to check the terms of a reservation deposit as you want to make sure it is refundable if you have to pull our and also that it is a reservation deposit as part payment of the purchase price - there are some estate agents who charge you a fee to accept an offer. Read this article - Is it a reservation deposit or a fee payable to the estate agent?

Day 1-21 - £265 - Property Searches

When buying a property you will need to pay for property searches, however when you pay for them depends on your transaction. Property searches can take anywhere from 3 days to 25 days to come back from the local authority so many buyers choose to buy them when they instruct their solicitor. The latest you should be ordering your property searches is when you order your mortgage valuation.

The costs for these vary depending on your solicitor and range from £265 to £400. Read what searches get ordered by clicking - Property Searches Explained

Download your FREE Pre-Exchange Checklist

From organising your buildings insurance to signing off on the seller's protocol forms, our checklist has everything covered so you don't miss anything.

Reduce the chance of missing something by downloading your FREE Pre-Exchange Checklist - Created by Solicitors


Fixed Fee, No Sale No Fee with a 5 out of 5 rating

 

Day 2-21 - £400-£1,500 - Mortgage valuation deposit

One of the first jobs after you instruct your solicitor is to organise your mortgage valuation. A mortgage valuation is organised through your mortgage lender and they require it to confirm the current value of the property. You will have to use the surveyor instructed by the mortgage lender: you can't choose your own surveyor from the open market. The cost of mortgage valuations range from £400 to in excess of £1,000, however you can confirm this cost directly with your mortgage company. Read this article - The 3 steps to getting a mortgage


When do you pay your house deposit

Day 2-21 - £400-£1,000 - HomeBuyer Report or Building Survey

You will need to get an independent surveyor to assess the structure and condition of your property. Often confused with the mortgage valuation, the HomeBuyer Report or Building Survey provides a detailed assessment of potential defects that the property may have. This type of survey should be undertaken by an independent RICS surveyor with relevant experience in the local area. Find out more about property surveys here - HomeBuyer Report Vs Building Survey

1 Day Before Exchange - £10% of the purchase price - Exchange Deposit

Prior to exchange of contracts you'll need to pay 10% of your purchase price to your solicitors' client account so that they can exchange contracts and then send on the house deposit to the seller. After you have exchanged contracts, you'll be contractually bound to purchase the property.

The money needs to be cleared (available) in your solicitors' client account before your solicitor can exchange contracts with the seller's solicitors.

TOP TIP: You can transfer up to £10,000 free each day using the Fast Payment payment system. You should time transferring the money to your solicitor so that if for example you need to pay £25,000 for the exchange deposit, you send £5,000 on one day, £10,000 on the next and then the balance the day after that. That way you won't incur bank transfer fees from you bank (make sure to speak to your bank and confirm you can send money by fast payment before you get close to completion).


We are often asked at the beginning of the conveyancing process to confirm exactly when exchange of contracts is likely to take place. The challenge is that although the conveyancing process follows a set path, there are a number of things that can happen along the way to slow the process down such as:


Solicitors estimate an average time frame a freehold purchase is 8 weeks and a leasehold/share of freehold is 12 weeks. The more complex the conveyancing process and the more people involved, then the longer the time it will take to get to exchange of contracts. Click on the following link to find out more about - Exchanging Contracts

1 Day Before Completion - Balance of completion monies

The day before you complete your purchase you'll need to pay the balance of your completion monies to your solicitor including:


There maybe some other costs that you need to pay when buying a property so make sure to get your completion statement sent to you by your solicitor. You can read more about all of the costs with detailed explanatory notes by clicking here - Purchase Completion Statement Explained.

Check your solicitor's bank account details by phone

It is essential that when you transfer any deposit to your solicitor, that you verbally check the bank details with another person within the solicitor's practice. This is additional protection against fraud.


See the full conveyancing process

Now you know when and what you'll need to pay your deposits for when buying a house, you can view the full home buying check list by clicking here - Use our FREE online Conveyancing Process

Don't forget to download your FREE Pre-Exchange Checklist

From organising your buildings insurance to signing off on the seller's protocol forms, our checklist has everything covered so you don't miss anything.

Reduce the chance of missing something by downloading your FREE Pre-Exchange Checklist - Created by Solicitors



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