Property deals collect deadlines. Banks and lawyers collect documents. The gap between those two habits is where deposits get stuck. You can shrink the gap by treating the money as a project with a route, a name and a file, not as a balance that will ‘be there’.
Know which payment you are making
A reservation fee, a deposit under a contract, and the balance at completion can have different refund rules. Read them before you send. A payment that is refundable only in narrow cases is a different risk from one you can recall. Your lawyer, not the agent, should explain which one this is.
Price the currency properly
If the contract is in one currency and your savings in another, the amount you must send moves. Get a quote for the amount received in the contract currency, including fees. The FX comparison tool takes figures you already have. It is not a live rate. If you fix a rate, ask what you owe if the purchase does not complete. Do not discover that clause after you have pulled out.
The story of the money
Salary, a sale, a gift, a remortgage and a company distribution are different files. The sending bank and the lawyer on the purchase can each ask. Names must match: a joint savings account into a sole purchase, or a company paying a personal completion, will be questioned. Start that explanation before the week the notary or the land registry is booked.
The deposit is a payment with a deadline and a story
A reservation or a deposit is often the first moment a purchase becomes hard to unwind, and it is often the first large cross-border payment. Read what the payment buys you and in what circumstances it is returned. Those terms are in the paper you are asked to sign, and they vary. Do not send the money because a timeline in an email felt urgent. Ask your own adviser what the paper means, then ask the bank what it needs in order to release the funds.
Source of funds for a property payment is the explanation of this transfer: savings, a sale, a gift, a bonus. Match the document to the story. If the money has moved between your own accounts, keep the statements that show the path. If someone else is contributing, ask the bank whether they will want that person’s documents too. Warn the other person. A surprise request at completion is how a purchase date slips.
Decide the currency and the sender before the week of completion
Write down the currency of the price, the currency of the savings, who will convert, and which account will send. Ask for a quote close to the time you will deal, and ask what happens if the amount that arrives is short because an intermediary took a fee. Build a small buffer only if you can do so without inventing money you do not have, and agree with the seller’s side what a short payment means. This guide states no fee and no safe buffer figure.
Keep the payment confirmation, the contract, and the bank’s questions and your answers in one file. You will want them if a later bank asks about the same money, and you will want them for the tax paperwork that follows a purchase. The tax questions are for a qualified adviser. The file is what makes that advice possible.
Before you act
If the price is in a currency you do not earn, decide the moment you will convert and write down who carries the movement until then. Some people convert early and hold the completion currency. Some convert close to the date and accept the uncertainty. Either can be sensible, and either can be uncomfortable. What is not sensible is discovering the question on the morning of completion. Ask the receiving lawyer what happens if the money arrives short or late, and ask your provider what proof they will give you that it was sent. Keep that proof with the contract. It is the document you will forward if someone says the funds have not appeared.
A practical checklist
- Refund rules read.
- Quote for the amount that must arrive.
- Route that can pay the lawyer or notary.
- Source documents gathered.
- Names aligned.
- Time allowed for a question from the bank.
Questions to ask
- Is this payment refundable, and when?
- How much has to arrive, in which currency?
- Who can take a fee from the transfer?
- What source-of-funds documents do you want?
- Whose name must be on the sending account?
- What happens to a fixed rate if we do not complete?
Common mistakes
- Sending from the wrong person’s account for speed.
- Using a tourist rate from a news site as a budget.
- A gift with no papers.
- Leaving the transfer until the day before completion.
- Splitting payments to avoid questions.
WiT Access provides general information and comparison resources. Nothing on this website constitutes financial, tax, legal or investment advice. Always consider obtaining advice from an appropriately qualified professional.
