When Do I Receive Funds from a House Sale?

Selling your house is a big deal, and knowing when you'll receive your money can help reduce some of the stress. Here’s a clear breakdown of when to expect those funds to hit your account and what steps you’ll need to go through first.

Key Steps Leading to Completion Day

After accepting an offer, the conveyancing process begins. This is the legal work involved in transferring the property, and it includes inspections, contract exchanges, and liaising with estate agents. The key milestone you’re aiming for is the exchange of contracts, when the sale becomes legally binding. After that, you’ll be heading towards the day of completion, when ownership transfers and you get paid!

Understanding the Buyer's Earnest Money

The buyer typically puts down a deposit or earnest money when contracts are exchanged. This money shows they’re committed, but you don’t receive it yet. The final payment happens at completion.

Required Inspections Prior to Closing

Before you can close the deal, inspections are usually required by mortgage lenders or cash buyers. Issues flagged during the inspections can delay the entire process, so it’s good to ensure your property is in top shape to avoid any hiccups.

What to Expect on Closing Day

On the day of completion, both the buyer and seller sign off on the final paperwork. This is where the completion statement comes in, outlining all fees, including any outstanding mortgage and closing costs. Once the paperwork is complete, the funds are transferred, and the property officially changes hands.

Payment Methods: Wire Transfer vs. Cheque

How you receive your money depends on your preference—either a wire transfer (often faster) or a cheque. Wire transfers can land in your account within hours, while a cheque might take longer to clear.

Understanding Wet and Dry Funding

There are two ways funds are disbursed: wet funding and dry funding. In wet funding, all the paperwork and payments happen on the same day, so you’ll receive your money almost immediately. In dry funding, the money is released a few days after the legal documents are finalised, meaning there might be a slight delay in receiving your funds.

Closing Costs and Their Impact on Funds Received

As a seller, you’ll need to cover various closing costs, which will impact the final amount you receive. These include estate agent fees, solicitor fees, and sometimes stamp duty. The completion statement will break down all these costs so you can see exactly how much you’ll walk away with.

Common Closing Costs for Sellers

Here are some typical costs:

• Estate agent fees (1-3% of the sale price)
• Solicitor fees
• Outstanding mortgage balance

These are deducted from the purchase price before you receive your money.

Remaining Mortgage Balances Explained

If you still have a mortgage on your current property, your lender will take what’s owed directly from the sale proceeds. You’ll receive whatever is left after this and other closing costs are deducted.

Tax Implications to Consider

While you usually won’t owe Capital Gains Tax when selling your main residence, second homes or rental properties may incur taxes. It’s always a good idea to check with a financial advisor to avoid surprises.

Timing of Payments

Typically, you’ll receive your funds within 1-2 business days after the completion paperwork is signed. This depends on the method of payment you choose—wire transfers tend to be the fastest option.

Typical Timeline for Fund Disbursement

On average, you should expect the money to land in your account the same day as the property transaction, or within a couple of days, depending on the speed of your conveyancing solicitor and whether you’re dealing with wet funding or dry funding.

Factors That Can Delay Payment

Delays in the disbursement process can happen if there are issues with the property chain, missing documents, or slow responses from mortgage lenders. To avoid this, keep your completion day free of complications by ensuring all paperwork is ready in advance.

Strategies to Expedite Payment Process

To speed things up:

• Double-check all documents are correct.
• Opt for a wire transfer over a cheque.
• Stay in close contact with your conveyancing solicitor to keep everything on track.

Effective Communication with Buyer and Agent

Open communication with your estate agent and the buyer is key to a smooth transaction. If everyone is clear on timelines and requirements, the entire process can go smoothly, reducing the chances of delays.

Ensuring All Documentation is in Order

Missing or incorrect documents are a common reason for delays. Make sure your solicitor has everything in order well before completion day, including your completion statement and final mortgage figures.

Understanding and Anticipating the Timeline

Understanding when you’ll receive funds from your house sale is all about planning and communication. On the day of completion, once all documents are signed and funds are transferred, you can typically expect the money within 1-2 days. By working closely with your estate agent and solicitor, and ensuring all documents are in place, you’ll ensure the smooth transfer of funds with minimal delays.

This clear timeline means you can confidently plan your next move, knowing when to expect the money from your property sale!

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