Do we need a solicitor to put a deposit on a house

[random10]

We have found a house we like, the story is that the man is bankrupt but the house is in her name. We made a offer which the owners and their solicitor is happy with but they need to check that their bank is happy because of his financial situation (This is what we've been told). The offer just about covers the mortgage so the estate agent seems to think this shouldn't be a problem. I asked the estate agent what the next step is should the offer be formally accepted and he said we put a deposit down. He said the deposit is fully refundable for any reason up to the signing of contracts even if we find a house we simply like better. Is this correct and standard? Should we pay the deposit through a solicitor or not?

 

[mathepac]

... I asked the estate agent what the next step is should the offer be formally accepted and he said we put a deposit down. He said the deposit is fully refundable for any reason up to the signing of contracts even if we find a house we simply like better. Is this correct and standard? Should we pay the deposit through a solicitor or not?

There is no formal acceptance by either party until contracts are exchanged. Your "declaration of interest" payment should be payable to the estate agent and is refundable by the estate agent up to the signing of contracts. Get a receipt. Up to that stage either party is free step out of the arrangement.

Just in relation to taking advice from an EA. No disrespect in general or that one specifically, but always bear in mind they work for the seller and have the seller's interests at heart.

I am not a legal expert and this is not legal advice. If you feel happier consulting a solicitor then by all means do so.

 

[Macstuff]

AFAIK you don't need a solicitor to handle the deposit. I bought a house ten years ago and did not use a solicitor at this stage in the process. The deposit should be a relatively 'small' amount of money - relative to the overall price.
In most cases - again AFAIK - they don't actually cash the cheque at this point, but will reduce the amt. of the cheque from your purchase price once the sale goes through.

Once you get the go-ahead to proceed with the deal, the house will be marked sale-agreed. However, you should realise that you have no legal standing in the deal until both parties sign the contract and the house is then 'Sold'.
This means, until you both sign either party can withdraw without any comeback. If you did decide to withdraw before contract signing you would be entitled to your money back.

 

[Gerard123]

Ordinarily I would say there is no particular need to have a Solicitor involved in the booking deposit, which this is. Normally pay to the sales agent and get a proper receipt. As per others it should be a modest amount.

However, if I was you, in this case (for peace of mind as much as anything else) I would route the money through your solicitor. You will need a solicitor anyway to handle the purchase so not a big deal for them to send the deposit. The reason I say this case is a little different is due to the seller being bankrupt. I'm not a solicitor so I dont know what exactly the legal position is but you would not want to find yourself in a position where you paid the deposit, it goes to the seller or is held to the benefit of the seller and it somehow gets 'mixed' up in the whole bankrupcy situation.

Best to avoid that even if there is a remote chance - why take one? Better to talk to your solicitor, at the very least to see what the story is.

 

[Bronte]

He said the deposit is fully refundable for any reason up to the signing of contracts even if we find a house we simply like better. Is this correct and standard? Should we pay the deposit through a solicitor or not?

What the estate agent told you is correct and standard. You are paying a booking deposit to the estate agent, it is fully refundable as you have not signed contracts. There is no need for a solicitor at this stage.

 

[Gerard123]

What Bronte is saying is indeed technically and legally the position in all probablity. I'm sure if you ask bank depositors and people with pensions or funds they would say the same technically and legally. Or perhaps you can ask customers of some estate agents who have been in media for all the wrong reasons. But alas there is the reality, and I think we can agree that theory and reality can be very far apart when it comes to entitlements around money. I fail to see any downside with involving you solicitor and would advise you to do this as per my last post. You are dealing with someone who is bankrupt, do you really need to be advised to involve your solicitor or is it just plain common sense?