When Do I Receive Funds From a House Sale In The UK?

When do I receive funds from a house sale in the UK?

A house sale is only final after the sale ‘completes’. In other words, you’ll get paid the full amount for the house when the sale moves to ‘completion’.

But does this happen on completion day or after it, and what can you do to get your funds faster? 

Let’s find out.

When Do You Get The Deposit When Selling a House?

The buyer is required to put down a deposit when the parties exchange contracts and the deal becomes legally binding.

At this point, they usually have to pay around 10% of the property’s value, but the conveyancer can negotiate a smaller amount if the buyer is taking out a mortgage or can only provide the funds at a later date.

If the buyer, for any reason, fails to complete the purchase, the seller is entitled to the deposit. Furthermore, if there was a pre-agreed completion date in the contracts, which cannot be met, the seller may receive interest on the deposit value.

How Long After Completion Do You Get Money?

Completion day is the final stage of the selling process when the seller’s solicitor receives the funds from the house sale. 

On completion day, the buyer transfers the funds to their solicitor, who then sends the money to the seller’s solicitor.

Once the seller’s solicitor confirms that they have received the funds, the sale is considered to be ‘complete’. The seller will then officially transfer ownership of the property to the buyer and provide them with the keys to the house, through their conveyancer.

If you’re thinking, ‘I sold the house. When do I get the money?’ The answer is: Probably on the same day.

How Long Does It Take For Solicitors To Release Funds?

The seller’s solicitor will hold the funds until they complete all the legal checks and confirm that any outstanding payments stated in the pre-agreed ‘completion statement’ are covered.

This is usually done on completion day, so you should receive the money transfer on the same day if the buyer used a bank transfer.

However, if your solicitor is holding the funds after completion, it usually has to do with external factors:

• Clearing the funds: The funds from the buyer’s solicitors need to be cleared in your solicitor’s account so they can transfer them to you. This typically happens on the same day when using a bank transfer. However, if the sale was paid via a cheque, your solicitor will need at least 4 days to clear the funds.

• Redeem the mortgage: Your solicitor may not be releasing the funds after the house sale if there is a mortgage to pay, as they will first need to clear the outstanding debt. The first thing they’ll do is request a redemption certificate and redeem your mortgage to minimise interest rates.

• Final checks and Fee Note: The solicitor needs to carry out several financial checks to ensure they’re retaining enough to pay all the necessary outlays and fees involved in the selling process. They’ll also send you an invoice for their fees, known as Fee Note.

• Compliance checks and Bank Mandate: Your solicitor will also have to conduct certain identity checks and verify a bank mandate for security reasons before they send you the funds.

What Is a Completion Statement?

A completion statement is a document issued by a conveyancer to the seller before a house sale is complete.

This statement details everything that needs to be paid out of the sale proceeds, including legal costs, estate agent fees, and admin fees. It also outlines the exact amount that you’ll receive at the end of the house completion via the money transfer.

The complexity of the statement may affect when you will receive your funds. 

For example, if you’re paying off house repayments or a proportion of the funds goes towards a new purchase, the completion statement will be longer. 

What Fees Do You Need To Pay When You Sell Your House?

Selling a house is a long process that incurs a variety of fees from start to completion, meaning you won’t receive the full amount that the buyer pays for the house. 

Your solicitor will take out any legal, estate agent, and mortgage fees before sending you the remaining funds. They’ll also use that money to cover removal costs and conveyancing fees.

Other costs include:

• Preparing your house for a sale.
• House repayments exit fee (MEAF).
• Early house repayment charge.
• Incentives.
• Capital Gains Tax. (Here’s how to avoid it!)

What Should You Do If You Need Funds Faster?

While selling a house can be a long and exhausting process, there are a few alternatives that can help speed up the sale, including:

• Auction: The entire process, from the exchange of contracts to completion, is much faster at auctions than with real estate agencies, as the buyer is required to put down a deposit immediately after they place the winning bid. There is also a set time period, usually 28 days, in which the sales need to reach completion. 

• Sell house fast services: Alternatively, you could sell your house and receive the funds within 7-14 days through one of the sell house fast companies. The company will give you a cash offer for the house and cover all your legal fees. The downside is the offer from the company will be below market value, but you won’t have to pay any commissions or fees, and you’ll get the exact amount you were offered.

Bottom Line

A property sale is a lengthy process, and getting your money can take days and even weeks from the time it’s declared as being ‘under offer’. 

Typically, sellers get paid on the day of the completion of the sale. This is when the buyer sends the funds to their solicitor, who then transfers them into your solicitor’s account. Your solicitor should be able to send you the money on the same day, but there are external factors that can delay the process.