Q I am writing to request your advice regarding the time difference between payment of our deposit and the exchange of contracts. We paid our conveyancer our deposit of 10% of the purchase price a week ago. But at the time, they said the sellers and their conveyancers were not yet ready to exchange contracts. Should we be worried? How long does one typically wait between payment of the deposit and exchange of contracts? Is it reasonable to ask our conveyancer to return our deposit and we pay them only when they are ready to exchange contracts?
A I don’t think you should be worried about paying your deposit to your conveyancer as the money will simply be sitting safely in the conveyancer’s client account. It won’t get paid to the seller’s conveyancer until contracts have been exchanged. If that doesn’t happen – because your seller pulls out of the sale or you pull out of the purchase – you’ll get your money back with interest, if applicable. That’s not the case if you were to pull out after contracts have been exchanged because your seller would be entitled to keep your deposit.
However, it is a bit odd that your conveyancer asked for your deposit before your seller was ready to exchange. It is more normal to request deposit money from a buyer only once a date for the exchange of contracts is set although it is also normal to ask for the money a few days in advance of exchange taking place to ensure the money can definitely be paid over. It could be that your conveyancer is being extra zealous about wanting to be ready to act promptly when your seller finally gets round to setting a date to exchange. In the meantime, rather than worry about your deposit money, you should be getting quotes for buildings insurance. This is because once contracts are exchanged, you become responsible for insuring the property even though you won’t be living in it until after the completion date.
Muddled about mortgages? Concerned about conveyancing? Email your homebuying and borrowing worries to Virginia Wallis at firstname.lastname@example.org