Deposit - and how their are held
When contracts are exchanged in the sale of a property, the buyer will usually provide a deposit. This deposit will be anything up to 10% of the purchase price.
There are three ways this deposit can be held:
1. As agent for the seller - this means that the seller's conveyancer can release the deposit immediately to the seller.
2. As agent for the buyer - this is where the deposit can be released to the buyer. This is rarely used but is sometimes useful where the seller is not represented by a solicitor.
3. As stakeholder - this is where the seller's conveyancer holds the deposit for both parties and won't release it until completion. If the seller fails to complete, the deposit is returned to the buyer with interest.