What is involved: the Conveyancing Process?
The sale and purchase of a property takes place in two stages:
- Leading to exchange of formal contracts.
- Second: leading to completion.
Until contracts are exchanged the agreement is not binding on any party, who can withdraw at any time without reason and without paying compensation to the other.
Once contracts are exchanged however the agreement is then binding on both parties and if either attempted to withdraw from the contract they would have to compensate the other for any loss that may be suffered. You would usually have to pay a deposit of 10% of the purchase price on the property you are buying when contracts are exchanged. If you withdrew from the contract you would lose this deposit and would also have to pay the compensation referred to above. (If you are also selling a property we would usually be able to use any deposit received on the sale for the property you are buying, so avoiding you having to contribute any additional cash).
Before you commit yourself by exchanging contracts to buy a property it is important that both you and we are satisfied with a number of issues. Broadly these are as follows:
- That the preliminary searches we undertake do not reveal any matters which are adverse to the property.
- That we are satisfied that the title to the property is in order so that you will take the property free from any adverse covenants or conditions.
- The sellers have not revealed any information concerning the property that might be of concern to you (for example neighbour disputes, problems with boundaries or intended building on adjoining property).
- That your financial arrangements are satisfactory. This is particularly important if you are having a mortgage.
- If necessary, you have had a survey of the property carried out.
On exchange of contracts a completion date is agreed and specified in the contract. This is the date when ownership of the properties will pass; when you can move into the property you are buying and when you must give vacant possession of your present property to your buyer.
There can be a gap of anything between a few days and a few weeks between exchange of contracts and completion depending upon the circumstances, and on occasion both can happen simultaneously.
Between exchanging contracts and completing there are a number of matters that we will have to attend to and a number that you will deal with. Please see our final reminders checklist of matters to attend to before completion.
With the agreement of the other Solicitors involved we will adopt the Law Society's National Conveyancing Protocol known as "Transaction". The use of the Protocol will ensure, so far as possible, that delays are kept to a minimum.
Selling A Residential Property
If you are selling a property as soon as you instruct us we will ask you to complete various documents. These include a Property Information Form giving information about the property to the buyer's solicitor, and a Fixtures Fittings and Contents Form listing the contents that you will be taking and the contents that you will be leaving in the house. The buyer will be relying on the answers given which must therefore be accurate and true.
We will obtain your title deeds and documents to prepare the contract to be sent to the buyer's solicitors, with the documentation referred to above.
We will deal with any additional enquiries raised by the buyer's solicitors, asking you for any information that is not otherwise readily available.
When everything relating to the sale has been agreed, we will ask you to sign the contract in readiness for exchange.
Buying A Residential Property
So that we can make all appropriate and necessary preliminary enquiries and searches on your new property and to help us to provide the best possible advice and service, we need to know your intended use of the property.
Unless you advise otherwise, we will assume that you intend to live in the property and that you and no one else will be occupying it. If this is not the case e.g. if you intend to use it partly for a business, extend the property, or if there will be other adult occupiers, please let us know.
The local and other searches we will be carrying out on your new property only relate to the property itself and not to any adjoining land or property. If there is anything in particular concerning any neighbouring property or land which you think should be taken up with the local authority, or if there are any particular points you wish us to raise with the seller's solicitor following your own inspection of the property, please let us know as soon as possible.
As soon as we receive the contract documentation from the seller's solicitor we will check the title and requisition the preliminary searches that we believe are necessary.
Investigation Of Title
This involves checking that the seller actually owns the property and whether the property is subject to adverse rights (e.g. a right for the neighbour to pass over the property) or covenants (e.g. that the property cannot be used for certain purposes).
We will ensure that there are no onerous restrictions or other matters that may affect your proposed use of the property and that there are no defects in the legal documents. If a defect is found that cannot be rectified, it is sometimes necessary to obtain indemnity insurance to protect you, your mortgage company and future buyers of the property. This is normally provided at the seller's expense.
We will check the information provided by the seller in the Property Information Forms (referred to above) and ask the seller's solicitor to clarify anything as necessary.
Why Do All Those Searches?
Over the hundreds of years that land and property has been sold and bought a large number of registers have been compiled which contain information that might be relevant to a property.
In the vast majority of cases the searches do not reveal any matters that might be adverse to a property to stop you buying it. Just very occasionally however we have had to advise a client not to proceed with their purchase due to some matter revealed in a search. The search process itself recently become far more efficient. We have an online connection to "Searchflow" a new national agency, which handles the complete process. As a result we are able to offer a very quick turnaround, with some results being delivered the same day by email.
These are just some of the searches that we might undertake:
Local Search:
This is a search with the local district council to see if anything registered with them might be adverse to the property. It will confirm for example:
- If the road outside the property is publicly maintained.
- If the property is subject to any planning permissions or tree preservation orders.
- If the property is a listed building
- If the local authority are taking proceedings for breach of planning regulations or building controls
- If there is a road widening scheme or other compulsory purchase that might affect the property
The search relates to the property only and will not reveal anything about adjoining properties.
Environment Search:
- If the property might be affected by subsidence or the effects of mining.
- If the property contains contaminated land.
- Possible adverse past and current land uses of the property.
- If the property is within a floodplain.
- If the property is in an area where radon gas is a problem.
We will forward a copy of the search result to you. However we are not qualified to advise upon it. Your surveyor may be able to assist if you have any concerns or queries in respect of any matters revealed in this search.
Your Mortgage
If you are having a mortgage to finance the purchase of your new property, the bank or building society will forward a copy of the offer to us at the same time it is sent to you. We will advise you when the offer is received and upon the main terms. We are not financial advisors and are not qualified to advise as to whether the terms or package you have taken are suitable to your requirements. We will however bring to your attention any onerous conditions or matters that must be complied with before we can proceed to an exchange of contracts.
Only when we have received satisfactory replies to enquiries, search results and mortgage offer will we be able to report to you with a copy of any relevant documents and the contract for you to sign in readiness for exchange of contracts.
When Is A Survey Needed?
If you are having a mortgage on the property you are buying your bank or building society will be instructing a valuer to inspect the property and you may even receive a copy of his report. This report however is made for the benefit of the bank or building society only and you would not necessarily be able to rely on the report if it proved inaccurate.
The seller will not be giving any information at all about the state of repair and condition of the property, any defects in the property or any services at the property. We therefore strongly advise our clients to have their own survey of their new property carried out and to have the gas, electricity, water and central heating systems checked over by a competent engineer.
Your bank or building society may have a scheme where, for an additional fee, the surveyor that they instruct would also be able to carry out a House Buyer's Report or Survey for you. This is likely to be cheaper than instructing another surveyor. You should check the availability of this with the bank or building society.
Do not be deceived by the fact that you may think you know the property. We often act for clients who are tenants of a local authority or housing association who are buying the houses which they have been renting, often, for some years. On one such occasion our clients, fortunately, took our advice to have the property surveyed even though they had lived there for sometime and thought they knew the property well. The survey revealed a major structural defect in the property. We were successful in negotiating for the price of the property to be reduced by a sufficient sum to pay for the cost of remedial work to be carried out - about £5,000.00!
Probably the only time on which a survey of a property would not be necessary is if you are buying a property newly built which is supported by a guarantee given by the National House Builder's Council or where the property has been constructed under the supervision of an architect or surveyor.
Finally On The Day Of Completion
This will be hectic for you, but equally for us. If you are both buying and selling we will not be able to complete the purchase of your new property until we have received the sale proceeds of your present property. If the chain is lengthy it can take some time for the money to pass through the hands of the various solicitors and this can add to the delay. It can also add to the frustration, especially if your removal van is full of your furniture outside your new house.
For our part we do all we can to ensure that completion does take place as quickly as possible. We have a computer terminal linked to our bank so that we can check regularly to see if the money on your sale has arrived. We can then instruct our bank via the terminal to send out the money immediately on your purchase. Delays in this part of the transaction are therefore kept to an absolute minimum as a result.
When you are selling your property we will pay off your existing mortgage. We will also pay your estate agent, once you have authorised us to do so.
Once we have completed the purchase of your new property we will then have to apply for title to be registered at H M Land Registry. This usually takes five to eight weeks. When the title is registered we will send you a copy to keep for future reference.
How Long Does It All Take?
The time scale will depend a lot on whether your seller needs to buy another property or your buyer needs to sell his own house and if so how long the "chain" is in each direction. If all the matters in the "chain" are interdependent then we can only proceed when everyone has satisfactorily completed all their preliminary searches and enquiries and have made their financial arrangements.
With the availability of modern technology to speed up the process of obtaining searches, a purchase can be completed within two weeks (and indeed on one occasion we dealt with a purchase in less than one week!!). The "normal" time (if there is such a thing!) is about five weeks to exchange of contracts with completion two weeks afterwards.
We do not recommend that you agree a moving date, or commit yourself to any other financial arrangements until we advise you that all parties in the chain are ready to proceed. This will avoid disappointment and expense through having to change dates at the last minute.
What Will It Cost?
It is our practice always to give estimates of what our professional charges are likely to be at the time when we are instructed. In setting our costs we will take into account a number of matters including:
- Our assessment of the likely complexity of the matter.
- The amount of time we might have to spend dealing with the matter
- Whether or not a mortgage is involved, the type of mortgage, and the bank or building society who will supply the mortgage. (Some banks and building societies have far more streamlined procedures and hence are easier to deal with than others!)
- The purchase or sale price of the property
We will set out our estimate fairly and fully giving information as to the disbursements (search fees, stamp duty, land registry fees etc) as well as our own professional charges. We will always endeavour to honour our original estimate. From time to time however complexities arise which we could not have anticipated at the time when we gave the original estimate. For example it may transpire that the title to a property being sold is not properly in order. This may result in us having to levy an additional charge for the extra work involved. We will always try to forewarn clients where this might happen.
Everyone's circumstances are individual and it is for this reason that we do not offer a quote on line. We believe in providing a tailored individual service for our clients. For a preliminary discussion and estimate, please contact one of the fee earners profiled on this page.
We ask for an initial payment of £225.00 on account of the search fees that we will be undertaking for you. This will of course be brought into the final account in due course. Apart from this initial payment, we will ask you for payment of any balance of money due to complete your purchase and our own professional charges and disbursements about seven days before completion.
Fraud And Money Laundering
We are now required by money laundering legislation and instructions from lenders to confirm the identity of our clients. At some stage we will need to see a clients passport / passports. If a passport is not availableone, then we will need to see at least two of the following:
- Cheque guarantee, credit or debit card.
- Receipted utility bill less than three month old.
- Council tax bill less than three months old
- Council rent book, showing the rent paid for the last three months
- Mortgage statement from a bank or building society for the mortgage accounting year just ended
- A firearm or shot gun certificate
Final Reminders
Following exchange of contracts for the sale or purchase of a property you will need to deal with the following:
Services
Arrange to have the gas and electricity meters read and for the contract for the supply of the services to be transferred. Contact your telephone supply company to arrange for the contract to be transferred and the central meter read.
Water Charges
We will not make apportionments of water rates as between seller and buyer on completion. The Water Company now do this apportionment. For the sale of an existing property they will bill you up to the date of vacating the property and if you have made an overpayment they will let you have a rebate direct. You will receive an account from the date you move into your new property in relation to that property. You should contact the appropriate Water Company requesting the apportionments.
Council Tax
Contact the appropriate District Council to advise them of your change of address. If you are moving between different districts the two councils will make apportionments as for the water charges.
Removals
You should only confirm your booking of a removal firm once contracts are exchanged. If you are undertaking removals yourself you should note that your household contents policy is unlikely to cover goods in transit and you should therefore make special arrangements with your insurance company.
Mortgage Payments
On your sale you should cancel your standing order for your monthly payments once contracts are exchanged. If by chance the building society or bank over calculate the amount which we will have to pay to redeem your mortgage through having not taken into account a subsequent payment this will be refunded. Following completion of any new mortgage the bank or building society will write directly to you advising you of the date on which your mortgage repayments will commence. This is normally two to four weeks after the date of completion.