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Payment of house purchase

Payment of house purchase

Old Nov 19th 2017, 12:29 pm
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Default Payment of house purchase

Hi.
I am getting conflicting "advice" from various sources both on-line and from real people about the process of paying for the purchase of a house.


WE are at a stage where we are close to completion and I have funds ready in an account with Moneycorp and will be opening a Spanish bank account next week, ready to transfer the funds.


The Vendors solicitor (and the vendor) have mentioned a bankers draft/cheque, which I am comfortable with, but our legal advisor is saying it should go through their "client account".
I'm afraid that it has become apparent that our legal advisor ( recommended by someone who has used them in 2 property transactions) is more of a translator who works with a Spanish lawyer ("A colleague") whom we have never met. I am not prepared to do that.
So, cutting through to my point:I'm under the impression that the Notary only needs to see that there has been an exchange of money so a bankers cheque/draft should be acceptable, no?
?
Thanks
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Old Nov 19th 2017, 1:04 pm
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Default Re: Payment of house purchase

When we bought our house we paid with 2 bankers drafts. The bulk of the purchase was in sterling as the sellers lived in UK, that draft cost us 20 GBP. The balance was in a euro draft from Sabadell to cover the necessary Spanish expenses and the 3% retention.
Be aware though that a draft from a Spanish bank can come with a hefty cost, Sabadell were quoting around 4%!!!
So a direct transfer into the client account of your solicitor may be a much cheaper option fee wise.
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Old Nov 19th 2017, 1:48 pm
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Default Re: Payment of house purchase

Thanks Steve.
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Old Nov 19th 2017, 7:29 pm
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Default Re: Payment of house purchase

Just make sure it is going to a genuine firm of solicitors/abogados and not to the agent !
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Old Nov 20th 2017, 8:13 am
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Default Re: Payment of house purchase

When you have a Spanish bank account transfer your money via a fx trader to that account and give your lawyer power of attorney over the account to make the transfer.
If you wish you can then rescind the POA.
Of course you must have confidence in your lawyer. This is what we did although we have not rescinded the POA as we use him to make other payments for us.

PS We have purchased 2 properties (2008 and 2014) like this although the receiving bank charged .5% for the transfer on the later purchase that was free on the earlier buy. That may mean 1% (2x.5%) to you so worth checking what charges you may incur.
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Old Nov 20th 2017, 7:18 pm
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Default Re: Payment of house purchase

Thank you for your replies. Very helpful one and all. Much appreciated.


It's horrible to say, but I don't trust our legal rep enough to pay it into their Escrow account or give them POA over my bank account (Unless I can limit that power to just picking the check up from the bank)
Even if it costs me 0.5% to issue a bankers draft for the amount of money we are paying for the house, it will not break me financially and I'd rather pay that than not sleep worrying about whether my money has gone to the Seychelles instead.


Thanks again.

Last edited by delbut; Nov 20th 2017 at 7:26 pm.
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Old Nov 20th 2017, 7:40 pm
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Default Re: Payment of house purchase

Try this.

Find out what bank they have. Open an account in same bank. Tell the bank you will be buying a house and the seller is in the same bank. You want to transfer the funds from your mobile on sale day. This should be no problem for the bank to authorise, and the cost should be zero.

So, you put the funds into the new bank account. When you sign the contract, you make the payment through online banking. Simples. Done. No nonsense. No middleman. You bought the house. End of.
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Old Nov 20th 2017, 7:58 pm
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Default Re: Payment of house purchase

Originally Posted by delbut View Post
Hi.
I am getting conflicting "advice" from various sources both on-line and from real people about the process of paying for the purchase of a house.


WE are at a stage where we are close to completion and I have funds ready in an account with Moneycorp and will be opening a Spanish bank account next week, ready to transfer the funds.


The Vendors solicitor (and the vendor) have mentioned a bankers draft/cheque, which I am comfortable with, but our legal advisor is saying it should go through their "client account".
I'm afraid that it has become apparent that our legal advisor ( recommended by someone who has used them in 2 property transactions) is more of a translator who works with a Spanish lawyer ("A colleague") whom we have never met. I am not prepared to do that.
So, cutting through to my point:I'm under the impression that the Notary only needs to see that there has been an exchange of money so a bankers cheque/draft should be acceptable, no?
?
Thanks
Hi,
We are at the stage before you. Can I ask how you put the funds into Moneycorp? Did you transfer £’s via debit card to them and they hold it in a client account until your ready? Is this age to do?
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Old Nov 20th 2017, 8:17 pm
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Default Re: Payment of house purchase

Originally Posted by delbut View Post
Thank you for your replies. Very helpful one and all. Much appreciated.


It's horrible to say, but I don't trust our legal rep enough to pay it into their Escrow account or give them POA over my bank account (Unless I can limit that power to just picking the check up from the bank)
Even if it costs me 0.5% to issue a bankers draft for the amount of money we are paying for the house, it will not break me financially and I'd rather pay that than not sleep worrying about whether my money has gone to the Seychelles instead.


Thanks again.

I am 100% with you on this, being totally risk-averse. Not sure amideislas' suggestion would work as I believe the Notary will want to see the money change hands at completion,. That's what happened on our purchase, copies of the drafts are attached to the escritura.


Our lawyers handed over three separate drafts: to the estate for his fees, to the seller's bank to clear the mortgage (balance as at day of completion checked and confirmed in writing), and the balance to the seller LESS


the amount of our lawyer's fees to clear the mortgage off the title just in case the seller didn't attend to it (which he did and it was then refunded to him);


and


the 3% retention as the seller was not Spanish.


The estate agent's fees were deducted from the balance and paid direct to him at the request of the estate agent, and agreed by the seller.


Although handled in a different way, those are the sort of issues also dealt with at completion in the UK, especially where mortgages are concerned.
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Old Nov 20th 2017, 8:24 pm
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Default Re: Payment of house purchase

Originally Posted by amideislas View Post
Try this.

Find out what bank they have. Open an account in same bank. Tell the bank you will be buying a house and the seller is in the same bank. You want to transfer the funds from your mobile on sale day. This should be no problem for the bank to authorise, and the cost should be zero.

So, you put the funds into the new bank account. When you sign the contract, you make the payment through online banking. Simples. Done. No nonsense. No middleman. You bought the house. End of.

Yup, I'm liking this one. The vendor does bank with the bank we have an appointment with so that is a great idea.
Thanks
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Old Nov 20th 2017, 8:25 pm
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Default Re: Payment of house purchase

PS: we transferred all our purchase funds to our Spanish lawyer's client account, and although slightly uneasy (not having the protection you get from the Law Society in the UK), we had dealt with them throughout did believe they were genuine and honest. In your situation, (not having dealt direct with the lawyers, and not - quite rightly - trusting the agent) I would ask the "agent" what drafts are required at completion, how much and to whom, and get them myself.
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Old Nov 20th 2017, 8:32 pm
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Default Re: Payment of house purchase

Originally Posted by Uksp View Post
Hi,
We are at the stage before you. Can I ask how you put the funds into Moneycorp? Did you transfer £’s via debit card to them and they hold it in a client account until your ready? Is this age to do?

Hi, can't speak for other providers but for Moneycorp:


Open an account and when you are ready to transfer money, phone them and get the best deal you can get that day. When we phoned they offered slightly over the advertised rate but obviously a little less than they can get if for.


Once you agree the amount you are buying and the rate, they will fix that for you and you then need to send them the money in Stirling. E.g 10,000 euros may cost you £9000.So you send them £9000. (They give you a reference number to make sure it goes to the right account). They will hold the euros in that account until you are ready to transfer it.


It was a simple matter of an on-line transfer of Stirling from our bank to Moneycorp account. Job Done.
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Old Nov 20th 2017, 8:36 pm
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Default Re: Payment of house purchase

Originally Posted by FranE View Post
I am 100% with you on this, being totally risk-averse. Not sure amideislas' suggestion would work as I believe the Notary will want to see the money change hands at completion,. That's what happened on our purchase, copies of the drafts are attached to the escritura.


Our lawyers handed over three separate drafts: to the estate for his fees, to the seller's bank to clear the mortgage (balance as at day of completion checked and confirmed in writing), and the balance to the seller LESS


the amount of our lawyer's fees to clear the mortgage off the title just in case the seller didn't attend to it (which he did and it was then refunded to him);


and


the 3% retention as the seller was not Spanish.


The estate agent's fees were deducted from the balance and paid direct to him at the request of the estate agent, and agreed by the seller.


Although handled in a different way, those are the sort of issues also dealt with at completion in the UK, especially where mortgages are concerned.

Sounds a headache! But that is similar to what I'll have to do I think. Transfer the funds to my solicitor for the fees and their costs and a separate one for the vendor.


Thanks for sharing.
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Old Nov 20th 2017, 8:40 pm
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Default Re: Payment of house purchase

On a slightly different but related question. When is the transfer tax paid? I've read on line within 30 days of the purchase. Is this right or is it at time of purchase?
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Old Nov 20th 2017, 9:39 pm
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Default Re: Payment of house purchase

I don't know when exactly, but it's usually a matter for the solicitor. As is normal in UK, before completion ours sent us a list of all the fees payable in relation to the purchase including eg search fees, Notary's fees, and the transfer tax (which was 10% for us), all of which we paid to him before completion. After completion, he then dealt with payment of the tax, and payment of the 3% retention, registration at the "Land Registry", change of name at the Catastro etc. All this was included in the list of the various processes that he would carry out and which were included in his own charges which were quoted at the outset.
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