When do you pay your house deposit?

You don't pay the money direct to the seller or their solicitor. The buyer's solicitor often sends the house deposit to the seller's solicitor by cheque.

It is rare to send the deposit before completion, unless you are buying a new build from a developer.

How much deposit do i need for a house?

The contract between you and the seller states that you are liable to pay a 10% deposit on exchange:

2.2 Deposit

2.2.1 The buyer is to pay or send a deposit of 10 per cent of the purchase price no later than the date of the contract"

You can, however, agree with the seller to pay a deposit of between 5% and 10%. Read more - How to buy a house with 5% deposit

Even if you have a larger deposit, for example 25%, you still only need to pay 10% on exchange of contracts and the balance you pay on completion. If you're struggling to save for a deposit then read this - How to budget the costs of buying your home.

So...When do you pay your house deposit?

This is when you need to pay your house deposit during the life of the conveyancing process including when you need to pay money on completion:

• 1Solicitors Deposit
• 2Reservation Deposit
• 3Exchange Deposit
• 4 Balance of Completion Monies

Paying deposit to solicitor for a house

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 £190 to £300.

Our solicitors take a deposit of £160, which is covered under our no sale, no fee policy. In terms of when do I pay solicitors fees when buying a house, you most often pay this initial deposit first and then the balance of your fees one day before completion. Read more about our No Sale No Fee Policy Here.

Reservation deposit

When do you pay deposit on a new build house? 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 out, as well as 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. We discuss this further in our article - Is it a reservation deposit or a fee payable to the estate agent?

10% of the purchase price

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. This is perhaps the most important answer to the question when do you pay your house deposit or perhaps, more pertinently, when do you pay your mortgage deposit? This deposit is a compulsory part of eventually receiving the balance of your mortgage, which you use to buy your home. 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.

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:

• how long the chain is;
• if you are getting a mortgage;
• if the property is leasehold
• how responsive the seller;
• if there is a management company/freeholder; or
• if you are buying using a gifted deposit.

Solicitors estimate an average timeframe for 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. We explain more about this stage in our article - Exchanging Contracts

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:

• Balance of the purchase price - This is the purchase price, less your exchange deposit and reservation deposit;
• Stamp duty - this is payable to HMRC within 14 days after completion, however your solicitor must be in receipt of the correct stamp duty in order to complete. You can use our online Stamp Duty Calculator.
• Land registry fee - Check to see what your Land Registry fee will be by clicking here
• Solicitor's fees - Calculate your solicitor's legal fees by clicking here
• (If leasehold) Apportionments and landlord notice fees;

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 reading our article - Purchase Completion Statement Explained.

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