House sale proceeds

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Pondy
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House sale proceeds

Postby Pondy » Sun Oct 11, 2020 12:55 pm

If we sell our house here in Andalucia to an English buyer can we have the proceeds sent directly to our English bank account without having the proceeds deposited with the buyers legal team? We are resident in Spain and have been for nine years.

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Re: House sale proceeds

Postby Beachcomber » Sun Oct 11, 2020 4:34 pm

You should be given a banker's draft for the proceeds of the sale at the moment of signing the escritura. This would be in Euros but, if you wish, it can be passed directly to the representative of a currency exchange service such as Currencies Direct so that you do not incur charges from your Spanish bank. Transactions in sterling are no longer allowed.

The money should never be given a Spanish lawyer. You might never see it again.

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Wicksey
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Re: House sale proceeds

Postby Wicksey » Mon Oct 12, 2020 8:58 am

The buyer usually pays the money into their gestorías or lawyers account though, in our experiences. Then they produce bankers drafts to the notary for fees and taxes, the bank if there's an outstanding mortgage and the balance for the seller on the day of the sale.

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Re: House sale proceeds

Postby Beachcomber » Mon Oct 12, 2020 9:07 am

No, that is not the way to do it. The proceeds from the sale are paid directly to the seller by means of a banker's draft made out in the seller's name with deductions already having been made for fees and expenses (and repayment of a mortgage if applicable) even if a representative is signing with a power of attorney.

The main portion of the proceeds should never be paid over to anyone other than a representative of a currency exchange company, if you decide to use one, otherwise it should be paid into the seller's own bank account.

The only money that a purchaser should pay to a lawyer or gestor is the original reservation fee and deposit from which the representative and estate agent are paid their fees.

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Re: House sale proceeds

Postby Wicksey » Mon Oct 12, 2020 10:18 am

I said that it's how it's been done for the purchases and sales (5 in total) that we've had in Spain, wrongly from what you say.

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Re: House sale proceeds

Postby Pamela1 » Mon Oct 12, 2020 10:59 am

When we bought our property the proceeds were paid by bankers draught directly to the seller at the notary with the fees and deductions already having been made....As far as i'm aware the sellers then left Spain and deposited the bankers draught which was made out in Euros in a Uk bank, they phoned us 2 months later to say their bank still had not received the funds,they were trying to make it our problem, their money eventually came through but i suspect they would have been better off using a currency exchange company.

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Re: House sale proceeds

Postby firsttango » Mon Oct 12, 2020 11:06 am

When I recently sold a property the 10% deposit was paid by the buyers lawyer by wire transfer direct to my Spanish account and then 2 weeks later at the Notary once all the usual deductions were made the final large payment was once again wired from the buyers lawyer to my account as we both signed the paperwork. It was in my account instantly.

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Re: House sale proceeds

Postby Devils Advocate » Mon Oct 12, 2020 11:55 am

Don't give the buyers lawyer a sniff of it. Currencies direct will send a rep. to the Notaria on day of completion, you hand them the cheque and job done. Money will be in your own bank account of choice within 48 hours.
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Re: House sale proceeds

Postby Devils Advocate » Mon Oct 12, 2020 11:59 am

Our completion one year ago went exactly as Beachcomber describes. The only money of ours a lawyer got near was our retention for a DAFO we paid for. Not seen a penny of it since.
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Re: House sale proceeds

Postby firsttango » Mon Oct 12, 2020 1:25 pm

Devils Advocate wrote:
Mon Oct 12, 2020 11:55 am
Don't give the buyers lawyer a sniff of it. Currencies direct will send a rep. to the Notaria on day of completion, you hand them the cheque and job done. Money will be in your own bank account of choice within 48 hours.
If on completion day you are owed €350k I cannot see any difference whether the money comes from the buyers lawyer's account or the buyer himself as I said above in my case it came from the lawyers account and was in my account instantly, before the ink dried on the signatures.

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Re: House sale proceeds

Postby Devils Advocate » Mon Oct 12, 2020 1:54 pm

We just had the cheque made out from the buyers to us, just to be sure what amount was on the cheque when we received it. Much like we should have insisted the buyers kept our retention in their bank as opposed to their lawyers.
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Re: House sale proceeds

Postby Beachcomber » Mon Oct 12, 2020 1:54 pm

There is a problem with having the funds transferred to the seller's account rather than by means of a banker's draft in that a transfer could be cancelled by the party that transferred the funds once the seller had signed over the property. Yes, it is very unlikely to happen and if it does it would probably constitute fraud but it could tie up your money for years and involve legal fees to recover it. Also, many notaries will not allow payment by transfer for this very reason.

The only safe way to receive the funds by bank transfer would be to insist on prior payment and move the funds to another account in another bank before signing over the property. This means that the purchaser would have to trust the seller to sign. With such large sums of money involved it is not worth the risk on either side.

As long as the seller gets the funds at the moment of signing the escritura, fine, but I got the impression from the first post that the suggestion was that the money would then go to the purchaser's lawyer for some reason.

Until there is some way of ensuring that a bank transfer cannot be reversed (which, at the moment, there is not) the only safe method of payment is by banker's draft.

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firsttango
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Re: House sale proceeds

Postby firsttango » Mon Oct 12, 2020 2:09 pm

Well I will count myself lucky that the buyers large and reputable Legal Firm didn't reverse the transfer then. My lawyer who happens to be a close family friend approved everything every step of the way. We purposely avoided a bankers draft as the funds can take up to 6 days to clear and we had an onward transfer of 50% set up to wire to the U.K as soon as the transfer hit our account on the Friday of completion.

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Re: House sale proceeds

Postby Beachcomber » Mon Oct 12, 2020 2:27 pm

Notwithstanding, the risk exists and whilst not an everyday event it can happen and I would consider it to be irresponsible not to make this known to the seller.

Additionally, once the funds are deposited in a Spanish bank account the bank can charge up to 0,35% to make a subsequent transfer especially if they know that the client is selling up and will close the account.

A banker's draft should not take six days to clear. DA said that the proceeds of the sale of his Spanish property were in his UK bank account within 48 hours.

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Re: House sale proceeds

Postby Miro » Mon Oct 12, 2020 2:32 pm

Beachcomber wrote:
Mon Oct 12, 2020 1:54 pm
There is a problem with having the funds transferred to the seller's account rather than by means of a banker's draft in that a transfer could be cancelled by the party that transferred the funds once the seller had signed over the property....
The only safe way to receive the funds by bank transfer would be to insist on prior payment ....This means that the purchaser would have to trust the seller to sign.
This is exactly what our buyer chose to do, because she was horrified at how much her bank wanted for a banker's draft (and she was Spanish!) We insisted she made the transfer at least 24 hours prior to signing, and take the risk of us scarpering if she wanted to do it that way. (She did, and we didn't!)
Every other purchase / sale of ours over the years was via banker's draft.
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firsttango
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Re: House sale proceeds

Postby firsttango » Mon Oct 12, 2020 2:43 pm

Beachcomber wrote:
Mon Oct 12, 2020 2:27 pm
Notwithstanding, the risk exists and whilst not an everyday event it can happen and I would consider it to be irresponsible not to make this known to the seller.

Additionally, once the funds are deposited in a Spanish bank account the bank can charge up to 0,35% to make a subsequent transfer especially if they know that the client is selling up and will close the account.
Absolutely they can, but was arranged prior that there was no onward transfer fee and regarding the transfer it was explained to me on previous transactions that a wire transfer cannot be cancelled once it has landed in the account. It can be reversed however, but as a general rule, banks can only reverse a payment made in error or cancelled only with the consent of the person who received it. ... This usually involves the recipient's bank contacting the account holder to ask his or her permission to reverse the transaction. Obviously I expect different banks to have different rules but all abiding by the banking rules of that country.

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Re: House sale proceeds

Postby Devils Advocate » Mon Oct 12, 2020 3:33 pm

Beachcomber wrote:
Mon Oct 12, 2020 2:27 pm


A banker's draft should not take six days to clear. DA said that the proceeds of the sale of his Spanish property were in his UK bank account within 48 hours.
The thread has struck a chord with me as I posted an almost identical one last year before completion, and got info., the same info the OP is now getting that I feel saved a lot of possible grief.

Soft lad here was just going to have it paid in to Unicaja until I learned of the costs and hassles that would cause, so I asked for the best way to get funds to our UK bank ASAP.

Currencies direct played a true blinder, a great lady from Nerja met us at the Notary, very reassuring she was too.
She took the check there and then and said she'd be in touch.

We jumped in the car and headed North at 2.30pm from Velez, staying in a hotel just south of Madrid that night. Next morning on our way to La Rioja phone goes, lady say's "What do you want to do with the money? Here are todays rates". We said transfer half to our UK bank and we'll watch rates over the next week. Next morning it was in UK bank account. Rates rose a few points when we were in Bilbao a few days later for the ferry, we called currencies direct and transferred the other half, money was in the bank before we docked at Porstsmouth.

Best advice ever received on here, painless and hassle free.

Only money as I say we are owed from the sale now is the retention the buyers lawyer is holding.....14 months down the line.
Property owner in Andalucia since 2002. How time flies.

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Re: House sale proceeds

Postby katy » Mon Oct 12, 2020 3:39 pm

Agree with Beachcomber. Bankers drafts are costly and take time to clear but all other methods have risk. Never pay the draft into a Spanish bank though, costly. There has been cases in Spain where the Lawyer didn't hand over the money. With a draft you can also pay it in to most banks in the world. Bankers drafts to UK are usually held onto by the Bank of Spain and their head office is in Getafe (Madrid). Our UK bank was very good, they gave us an improved rate of exchange to their business rate, you can negotiate if a large sum. we also had a named link person to call anytime. We had 3 drafts for just one sale. Deposit from buyers. part payment from their parents and the other from their mortgage provider. 2 smaller ones went to a secret destination in a warm country.

DA's method sounds excellent though. Don't think there was anything like that when we sold.

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Re: House sale proceeds

Postby Wicksey » Mon Oct 12, 2020 6:10 pm

When we moved from here to France we took the bankers draft with us to pay into our French account to avoid Spanish charges but the money didn't come through for 3 months. Spain blamed France and vice versa. I think Currencies Direct sound the best bet next time.


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