One of the first questions you may have when you are selling property is when your funds will come through. In most cases, the sale’s full proceeds will be paid by the buyer on settlement day, although there are few exceptions to this rule. The buyer will generally pay a deposit when they sign the Contract of Sale and although this is usually held in trust by the real estate agent, in some cases it may be possible to release the deposit before settlement.
Your conveyancer or solicitor will help you with the transfer of these funds, but it’s also important to work with a qualified real estate agent as a seller as they may be responsible for drawing up the Contract of Sale and negotiating this deposit.
(A good real estate agent will have professional connections to conveyancers and conveyancing solicitors, you can compare real estate agents upfront at LocalAgentFinder and get the expert advice to help you sell your property.)
Releasing the Deposit Early
In addition to working with your real estate agent, you will need to speak to your solicitor or conveyancer if you wish to have your deposit released early. It’s best to discuss this as early on in the process as possible, even as early as when you first hire your conveyancer or solicitor. This will give them plenty of time to prepare all of the necessary documents. That way, the legal documents can be served to the buyer immediately after they have signed the Contract of Sale.
How a Mortgage Can Affect Early Release
The buyer will be more willing to agree on an early release for the deposit if there is no mortgage on the property. This is because there won’t be any existing encumbrance and they will feel more secure about the settlement. Without a mortgage, the purchaser should receive clear title during settlement as per the original Contract. The conveyancing transaction should be straightforward.
Yet if you do have a mortgage on the property, then this will involve a bit more effort on the part of your conveyancer or solicitor. They will need to contact the mortgagee for details, so that these can be passed on to the purchaser. Without this information, the buyer is entitled to deny your request for an early release of the deposit. Even with this information, if they feel uncomfortable or unsatisfied with what they have received, they can refuse this request. An example of this might be if the mortgage allows advances beyond the original sale price. The purchase might be worried that you would potentially draw on the advance, in which case the proceeds of the sale wouldn’t be sufficient enough to discharge the mortgage.