The vast majority of adults know what the word ‘deposit’ means; however, they may not realise that there are differences between a normal deposit and a conveyancing deposit. This can cause problems when it comes to buying a house, especially if your solicitor or conveyancer has not made the differences clear.
Are you thinking about buying a home? If so, here is everything that you need to know about conveyancing deposits.
Where the confusion starts
When most people hear the word ‘deposit’, they think about the amount of money they will put down to secure the house; for example, if you rent a property, you may have to pay a security deposit before you move in. This is a standard, normal deposit – but a legal deposit is slightly different.
What a conveyancing deposit actually is
A legal conveyancing deposit is different for a few reasons. Normally, when people put a deposit down on a house, they pay 10 per cent straight away as a deposit to secure the house. This means that the house is theirs and they have a certain amount of time to pay off the rest of the deposit.
The problem with house deposits is that they can be pretty expensive; in fact, the average house deposit in the UK is over £10,000. Many people can’t afford this, so they pay five per cent upfront instead of paying ten per cent. This covers half the deposit, so they still owe the other five per cent. If you decide to pull out of the transaction after contracts have been exchanged, you will still owe the rest of the deposit, which could be £5,000 or more.
If you want to find out more about the conveyancing process, consult a professional such as https://www.samconveyancing.co.uk/login.
This makes it easier for people to buy homes, as it is cheaper and more accessible; however, it is essential to speak to your conveyancer to check the amount of the deposit. This means you won’t end up in a sticky financial situation if you change your mind about the house before completion.
Buying a house can seem like an overwhelming task, but your conveyancer should help to make things clearer. This should make the process much easier and faster, meaning that you can move in as soon as possible