GUIDE TO BUYING YOUR HOUSE 

Introduction

This is intended to be a simple guide to the procedures that are involved in the sale and purchase of a property. Being aware of the steps that need to be taken will help you to understand all that must be done before the proposed sale and purchase may be completed.

The process can be divided into four basic stages:

1.    Finding a suitable property and agreeing the purchase price in principle with the Seller or Estate Agent.

2.      Making enquiries about the property to ensure you are buying what you thought you were buying (for example that the garden belongs exclusively with the house and is not subject to rights for others to use it), and ensuring your financial arrangements are in place.

3.    Exchange Contracts: only when Contracts have formally been exchanged, and a deposit paid by the Buyer to the Seller, will the proposal become a binding agreement on both parties. Until that time either party may withdraw from the transaction or seek to re-negotiate the terms without liability to the other.

4.     Completion: on the day of completion the balance of the purchase price is paid by the Buyer to the Seller. The Seller must move out on the same day and hand over the keys to the property together with the title deeds.

It should be noted at the outset that there are a considerable number of enquiries, searches, and arrangements to be made between first finding a property and being able to complete the purchase. Therefore, whilst it is helpful to have an idea of when you would ideally like completion to take place, the exact date will not be agreed until exchange of Contracts. To become too focused on one date at an early stage often leads to uncertainty and stress and should be avoided if possible.

This is not a stage at which your Solicitor will usually be involved. There are however two points that should be borne in mind:

1.      If you have a property to sell, let us know so that we may obtain your title deeds. If your mortgage was taken out some time ago, the deeds may be held by the bank or building society and it may take up to two weeks for the deeds to be delivered. For a more recent mortgage, we can obtain most of what we need from the Land Registry, though we may also need to approach the Solicitors who acted when you purchased to check whether they are holding any documents such as indemnity policies. Requesting all this information before the sale is finally agreed will avoid unnecessary delay.

2.      If you need a mortgage for the purchase, you may agree this with a Bank or Building Society in principle before the exact property is chosen. This will enable you to know at the outset how much you can afford to borrow (and what the Bank is prepared to lend) and will help to reduce the length of time taken for that formal Mortgage Offer to be issued. Evidence of income is usually required and the necessary confirmation from employers or the checking of accounts can all be attended to at this stage.

 Finding a suitable property

You have agreed in principle to buy a house and it is now that we will usually become involved. This is the stage when you seek to ensure that you know exactly what it is you are buying and whether there are any significant facts about the property of which you were not previously aware. This is the beginning of the “Conveyancing” process which takes the following form:

1.      We will ask you to complete our New Client Form, which authorises us to make electronic checks of your details to satisfy Money Laundering Rules and Regulations. Sometimes client details do not match the systems which are electronically checked, in which case we will need to ask you to provide originals of two forms of identification, being a photocard Driving License or Passport together with a utility bill, bank/credit card statement or Council Tax Bill addressed to you at your current address. The Driving License or Passport will need to be current, and the other paperwork will need be dated within the last three months (other than a Council Tax Bill which must be for the current year). Please note that, if you are obtaining a mortgage, the lender will require us to take copies of your id documents whether you pass the electronic checks.

2.      The Estate Agent notifies the Solicitors for both the Seller and the Buyer of the proposed transaction.

3.      The Solicitor for the Seller obtains the title deeds and other relevant documentation and prepares a Contract for Sale. The Contract, together with copies of the title deeds and other relevant information, are sent to us.

4.      Upon receipt we will:

(i) Check to ensure that the terms of the Contract are reasonable and that they reflect the proposed transaction.

(ii) Check the title. We will ensure not only that the Seller is able to sell the property to you but also whether there are any restrictions imposed upon the property, whether there are rights reserved to others (for example rights of way) or whether the property has any necessary rights over adjoining land (for example rights for services).

 Making enquiries about the property

The Transfer of the property is normally made with reference to a Plan. When you receive this from Solicitors, you should carefully check to ensure the Plan correctly corresponds with the boundaries of the land you have agreed to purchase. If there is a discrepancy you must notify solicitors, prior to Contracts being exchanged. Unless a specific request is made to your surveyor to assist, this exercise is your responsibility.

(iii) Submit our applications for searches (see below). The results will provide information about the property and surrounding area, for example, whether:

.                   roads/pathways are publicly maintained

.                   planning requirements have been complied with

.                   the property benefits from mains drainage

.                   the property falls within a conservation area

.                   there are any recorded industrial landfill or waste sites in the vicinity

.                   there is a general flood risk

 and so forth. It should be noted that the standard searches relate to the specific property searched against and, other

than the environmental search, do not give detailed information about adjoining properties or the neighborhood.

If you have concerns, please discuss these with us as soon as possible, as one of the optional searches set out below may provide the information you need for an additional fee.

(iv) Submit our application for a Chancel Repair Liability Indemnity Policy (if the property does not already benefit from one). Legislation was changed in October 2013 and now the Parochial Church Council must register a potential liability with the Land Registry before the property is sold to a new owner. If this is not done, the new owner will not be liable to contribute to any repairs. This change has resulted in a reduction in the insurance premiums, so that it is now less expensive for you if we take out the insurance rather than conduct the search to find out whether the property could be liable.

(v) Review the Information Forms completed by the Seller to see whether there are any disputes about the property, who owns the boundaries, whether recent alterations have been carried out which might have needed planning consents, what contents are included in the purchase price, etc. Please note that these questions will not establish the physical condition of the property nor the state of the appliances which is a matter for your surveyor.

(vi) Raise “additional enquiries” of the Seller. These questions are designed to establish several general matters, for example, whether the Seller has made any contributions towards maintenance of shared items, if they have had any issues with exercising rights of entry to neighboring properties and solar panel or septic tank information.

1.      While we are making the searches and enquiries outlined above you should arrange: -

 Mortgage Application

Most properties are purchased with the benefit of money borrowed from a Bank or Building Society. If a mortgage is required, you will need to complete an application, and this should be done as soon as reasonably possible. Dealing with the application is one of the longer processes and may therefore cause delay. The lender will need to be satisfied both as to your ability to repay the money and the value of the property which will form their security.

It should be noted that the mortgage money will be paid direct to us immediately before Completion. It will not be available for use for the deposit.

Home Insurance

If you are not having a mortgage, taking out building’s insurance through your mortgage lender or buying a leasehold property, you will need to put buildings insurance in place from exchange of Contracts.

If the property becomes damaged between exchange of Contracts and completion, it is highly likely that the Contract will still require you to complete the purchase. The money received from insurance will then need to be applied to reinstate the property. While it is extremely unusual for a property to be damaged between exchange of Contracts and completion, the matter of insurance is one that must not be overlooked.

We also recommend that contents insurance is affected no later than the completion date.

Survey:

It is the responsibility of the Buyer to ensure that the physical state of the property being purchased does not hold any surprises. The Seller is not under any duty to disclose any problems that may exist. It is for this reason that a survey is recommended. There are three types of survey that may be arranged:

 Valuation:

This is the cheapest option and, as might be expected, gives the least information and protection. The brief inspection is designed to indicate whether the price being paid for the property is reasonable on the assumption that there are no defects other than those which may be obvious.

Home Buyer’s Report:

A considerably more detailed report which is based on a thorough visual inspection of the property. Tests for damp are also likely to be carried out. If the visual inspection reveals matters that require further specialist investigation, then this will be drawn to your attention.

Structural Survey: Expensive! 

This will involve very detailed inspections and may include exposing foundations, lifting carpets and floorboards, or exposing wall structures. It is unusual for such a survey to be carried out unless there are known to be structural problems.

If a Bank or Building Society are lending money on a mortgage, they will usually insist on a valuation being carried out on their behalf. That valuation is given to the Bank and affords the Buyer very little protection. Consideration should be given at the outset to arranging for the same surveyor to affect a Home Buyer’s Report on your behalf at the same time as the valuation for the bank. This will usually result in a saving of fees because only one visit to the property will be required.

Spending money on a survey can be a little bit like spending money on insurance. There may be nothing to show for it at the end of the day, but it might save you spending considerable sums of money that can be ill afforded. The tighter the budget the more carefully you should consider a proper survey.

If you would like us to recommend a Surveyor, we shall be pleased to assist.

Please note that we do not advise on the potential for development of any land or property to be purchased, the prospects of obtaining planning permission or any other necessary consents for any development or on any planning policies or restrictions which may apply. You should therefore take care to satisfy yourself, as soon as possible and certainly prior to exchange of Contracts, that any proposed development will be permitted and if so, subject to what conditions. You should also consider engaging an appropriately qualified Architect, Surveyor or Planning Consultant to advise on and assist with any enquiries you propose to make for this purpose. Our retainer does not extend to making such enquiries on your behalf.

When all points have been satisfactorily dealt with, we will provide a full Report on Title to you. Only when you are satisfied that you understand the information provided should you sign the Contract and authorise us to exchange the Contracts. It is at this moment that we will finally agree the completion date with the Seller. Upon exchange of Contracts, you will be expected to pay a 10% deposit. This should be provided to us either by bank transfer or, if by cheque, 10 working days in advance to allow time for the cheque to clear. If a 10% deposit is not available, please notify us as soon as possible.

It must be appreciated that when agreeing a day for completion there may be several transactions that have to be coordinated. This is often referred to as a “chain”. It is an irritating fact of life that the chain will only proceed as quickly as the slowest party. Patience and flexibility at this stage is often required!

 Standard Searches

1.      Local Authority This provides details of the entries on the Local Land Charges Register, planning applications, highways information, notices, and restrictions such as conservation areas and Tree Preservation Orders, which are overriding interests.

2.      Water & Drainage A report including the location of public sewers within boundaries of the property or in its vicinity, whether foul and surface water from the property drains to a public sewer, whether the sewers are adopted, the location of the public water mains and whether the property is connected and the basis of charging for the sewerage and water supply to the property.

3.      Environmental This provides information on the risks of contamination, historical land use, overhead transmission lines, ground stability and radon. It also includes general flood risk, energy and infrastructure information and a professional assessment by environmental consultants on the impact of contaminated land on market value.

 Optional Searches

1.      Energy This report provides information on existing and potential large scale energy infrastructure or exploration projects in the area including fracking sites (hydraulic fracturing), oil and gas exploration and extraction areas, power stations, wind farms and turbines.

2.      Flood This provides more detailed information than is included in the standard Environmental Search. It includes Environment Agency tidal and river flood data, details of areas benefiting from flood defense, pluvial flood risk, likely availability of insurance for flood risk and British Geological Survey groundwater flood risk data.

3.      Ground Stability Reports This is a risk screening report that provides an overview on the potential for ground instability due to natural hazards or previous mineral extraction in the vicinity of the property.

 Searches

HS2 + Cross rail This combination report provides insight on the location of both existing and planned energy extraction and generation installations whilst also detailing the proximity of the property to the Cross-rail network and proposed High Speed 2 route.

4. Planning Report Residential planning report including 10 years’ planning history, details of residential and commercial planning applications, major infrastructure project planning applications, planning application decisions/ status, mobile phone mast locations, local infrastructure and information, and local education details and results data.

5. Coal Mining Reveals whether the property is in an area where coal mining has or is likely to take place, the existence of underground coal workings and mine entries which may cause problems or subsidence.

6. Clay, Gypsum, Limestone or Tin & Metal Minerals Search Details the presence of any workings which could cause subsidence damage or whether there may be a risk of subsidence from historic extraction.

 If you are not taking out a mortgage and know the area well, you may opt to take out a No Search Insurance Indemnity Policy instead. This will protect you against any financial expense or loss incurred because of something which would have been revealed by a search result. Please note, however, that it will not compensate you for any non-monetary loss, e.g., loss of enjoyment or emotional distress.

Exchange Contracts

When both the Buyer and the Seller have signed their Contracts, a date for completion has been agreed and the Buyer has provided the deposit to their Solicitors, it will be possible for Contracts to be exchanged. This is done by the Solicitors on behalf of their clients by telephone. This is the moment at which the agreement becomes legally binding on both the Buyer and the Seller.

Following exchange of Contracts, we will need to attend to the following:

1.      Apply to the lender for issue of the mortgage advance. Most mortgage lenders state that they need at least 5 working days’ notice before the money can be made available.

2.      Submit Land Registry searches to ensure there have been no changes to the title.

3.      Prepare a Transfer Deed, obtain the approval of the Seller’s Solicitors to its terms and arrange for it to be signed by the Seller and, if necessary, by you.

4.      Prepare a Completion Statement to let you know the exact balance required from you (if any) to enable the purchase to be completed. Again, any cheque will need to have cleared before the day of completion.

 Following exchange of Contracts, you should attend to such of the following as are appropriate:

Put your Buildings Insurance Policy on risk.

Book/confirm your removers.

Contact the utility providers to arrange to take over the utility accounts.

Contract the Local Authority in relation to the payment of Council Tax.

Arrange redirection of mail by the Post Office.

Send out details of your change of address to everyone including your Bank, Doctor, credit card companies, DVLA, TV License, etc.

 Completion

On the day of completion, the solicitors  will send the balance of the purchase price to the Seller’s Solicitors. Upon receipt they will release the keys which are normally held by the Estate Agents. Please bear in mind that if there are several transactions below you in the chain, it may take some time for the monies for each transaction to move through the banking system.

After completion

The Seller’s Solicitor will send us the property deeds and documents.

The solicitors will arrange for payment of Stamp Duty Land Tax and any Landlord/Managing Agent Notice Fees on your behalf and, as soon as we are holding all the necessary documents, the solicitor will apply to the Land Registry for the transfer of the property into your name. Depending on the type of transaction, this can take anything from a few days to a few months, but please rest assured that you will legally own the property 

from the day of completion, notwithstanding that it may take a while for the paper evidence to be issued by the Land Registry. When the process has been completed, the solicitor will send a copy of the Title Document to you and, if required, a copy will also be sent to your lender.

Joint purchases

If the property is to be purchased in joint names, your instructions are required as to whether you will hold the property as tenants in common (you each have an identifiable share capable of being left under your respective Wills) or joint tenants (you both own the entire property together and the survivor of you will become the sole owner of it automatically). 

Have you made a Will?

Having completed the house purchase you should consider making a Will or reviewing your existing Will. If you die without a valid Will there are provisions which will automatically determine to whom your assets will pass. These often cause surprise, and it should be noted that only if the deceased leaves no children, parents, brothers, sisters, nephews, or nieces will the spouse be entitled to the whole estate. Tax may also be incurred unnecessarily. Making a Will need not be expensive, and we shall be pleased to assist if you so wish.

GUIDE TO SELLING YOUR HOUSE

Introduction

This is intended to be a simple guide to the procedures that are involved in selling a property. Being aware of the steps that need to be taken will help you understand all that must be done before the proposed sale (which may be linked to your onward purchase of an alternative property) may be completed.

The process can be divided into seven basic stages

1) Obtaining valuations and marketing your property via estate agents or personally. Once a suitable Buyer comes forward, you need to provide the Estate Agents with details of solicitor who will be carrying out the conveyancing formalities on your behalf, so that a Memorandum of Sale setting out the agreed sale price and any other conditions is issued to all parties. If you have not instructed an estate agent, please advise us of the name of the Buyer and details of their Solicitor.

2) To commence the conveyancing process your solicitor will ask you to sign a scope of work. The scope of work document is required to comply with the various rules and regulations to which we are subject and is intended to clearly set out the likely costs of the transaction, timescale, your instructions and the like. If you have a Mortgage secured on the property, we will need details of the Mortgage account number so that we can apply to your Lender for a redemption statement for information purposes at the outset of the transaction and for the lender to release any deeds or documents it may be holding on your behalf.

3) Complete a Property Information Form, a Fittings and Contents Form and (if applicable) a Leasehold Information Form. These forms need to be completed in full and signed by all Sellers.

4) Submit Contract package to the Buyer’s solicitors. Your solicitor will prepare the Contract in acknowledged acceptable terms for residential property transactions and send this, with details of your title/ownership to the property and the completed Information Forms, to the Buyer’s solicitors.

5) Reply to relevant Additional Enquiries as raised by the Buyer’s solicitors. The solicitors will obtain your instructions as to the replies to be given.

6) Exchange Contracts. Only when Contracts have formally been exchanged and a deposit paid by the Buyer to the Seller (which is held by the Seller’s solicitors until completion takes place or applied as a deposit for any onward purchase) will the transaction

become a binding agreement on both parties. Until that time either party may withdraw from the transaction or seek to re-negotiate the terms without liability to the other.

7) Completion. On the day of completion, the balance of the sale price is paid by the Buyer to the Seller. The Seller must move out on the same day and hand over the keys to the property.

Please note at the outset that the Buyer, via their lawyers, will need to obtain results to pre-contract searches, raise enquiries and more than likely apply for and obtain a satisfactory Mortgage Offer along with a Valuation Report and/or Home Buyers Report etc. before being able to commit to an exchange of Contracts and completion of the transaction. Therefore, whilst it is helpful to have an idea of when you would ideally like completion to take place, the exact date will not be agreed until exchange of Contracts. To become too focused on one date at an early stage often leads to uncertainty and stress and should be avoided if possible.

In more detail 

The solicitors will ask you to complete our New Client Form, which authorises us to make electronic checks of your details to satisfy Money Laundering Rules and Regulations. Sometimes, client details do not match the systems which are electronically checked. In which case the solicitors will need to ask you to provide originals of two forms of identification, a Photocard Driving License or Passport, together with a utility bill, bank/credit card statement or council tax bill addressed to you at your current address. The driving license or passport will need to be current, and the other paperwork will need be dated within the last three months (other than a council tax bill which must be for the current year).

Once the identity of the Buyer and their Solicitors are known, we make contact to confirm our instructions to act on your behalf in the transaction and ask the Buyer’s Solicitors to also confirm their instructions and whether the Buyer also needs to sell their own property and obtain a satisfactory Mortgage Offer before being able to proceed with the purchase of your property.

If you have a Mortgage secured on the property, having received details of your Lender and Mortgage account number, the solicitors apply for a redemption statement for your account, for information purposes at this stage, so that you can check to ensure the figures are as you anticipated. Sometimes there are Early Repayment Penalties imposed if the Mortgage account is repaid before the expiry of a fixed rate period. The solicitors also ask the Lender to forward any title deeds (if your Mortgage was taken out some time ago).

More than likely, Title to your property is registered at the Land Registry under an individual Title Number and therefore the title ‘deeds’ consist of the Property, Proprietorship and Charges Registers. The solicitors obtain up-to-

date Title Entries and Plan from the Land Registry by way of evidence of your ownership, confirmation of whether you have a Mortgage secured on the property and any specific rights granted or reserved, etc.

The solicitors ask you to complete the following Information Forms which are important documents to be forwarded to the Buyer’s Solicitors with the Contract and Title Documents:

1) The Property Information Form. This consists of 14 sections, written in plain English and in most cases consisting of tick boxes – where relevant you can include further information, such as ownership/responsibility of boundaries; whether you have been involved in any disputes with neighbours; receivenotices from the Local Authority or adjoining owners; obtained Planning Permission and/Building Regulation Approval for works carried out to the property; etc. The solicitors will ask that you provide as much information as possible, along with copies of all supporting documentation that you may have with your records, so that the Buyer is fully aware of all relevant information regarding the property and matters which may affect their future use and enjoyment.

2) The Fittings and Contents Form. This needs to be completed fully and signed by all owners as this forms part of the Contract. You can specify what items are to be included/excluded from the sale and detail any items you may have available for the Buyer to purchase separately.

3) The Leasehold Information Form (f applicable). Having received the complete Contract package, the Buyer’s solicitors will undertake the usual pre-Contract Searches – there tends to be little activity at this point as it can take some time for the relevant authorities to process the results. During this period, the Buyer, if needs be, will be applying for their Mortgage and instructing a surveyor to inspect and report to them on the structural condition of the property.

Progressing

Having reviewed the Contract Package and results of the pre-Contract Searches, the Buyer’s Solicitors will, in all probability, raise Additional Enquiries (or queries) on which the solicitors will need to obtain your instructions before providing responses.

At this point the solicitors will provide you with the Contract for your signature and return, to be held on file until all the parties involved are able to proceed and authorise exchange of Contracts.

The Buyer’s Solicitors will have provided a draft Transfer which is the formal Deed transferring the property from your name into the name of the Buyer at legal completion. The solicitors will check this document to ensure it correctly records all parties, price, etc., and arrange for it to be signed and returned by you, again to be held on file until the solicitors have received the sale proceeds on the day of completion. 

Exchanging Contracts

 When both the Seller (you) and the Buyer have signed their Contracts, a date for completion has been agreed and the Buyer has provided the deposit to their solicitors, Contracts can be exchanged. This is done by the solicitors on behalf of their clients by telephone. This is the moment at which the agreement becomes legally binding on both you as the Seller, and the Buyer.

Following exchange of Contracts, we will need to attend to the following:

1.     Apply to your Lender for a final Redemption Statement in respect of your Mortgage account up to the date of completion.

2.      Inform your Estate Agents that Contracts have been exchanged and ask for them to provide their commission account for your approval.

3.    Prepare a Completion Statement to let you know the exact amount of net sale proceeds available at legal completion and obtain your confirmation that you agree with your Mortgage redemption statement and that we may discharge the Estate Agent’s commission account from the sale proceeds.

 Unless the net sale proceeds are required for your purchase, the solicitors will also obtain your instructions for remittance of the funds to you, usually by way of CHAPS (same day cleared funds, but there is a transfer fee of £30), or BACS transfer (can take two to three working days to arrive as cleared funds, but there is no transfer fee) direct to your bank/building society account.

You should attend to the following, as appropriate:

1.    Advise your solicitor of your onward address if you are not simultaneously purchasing an alternative property where your solicitors have also acted

2.      Book/confirm your removers.

3.      Contact your utility providers to arrange for final readings to be taken at completion.

4.      Contact the Local Authority in respect of Council Tax.

5.      Arrange redirection of mail by the Post Office.

6.    Send out details of your change of address to everyone, including your bank, doctor, credit card companies DVLA, TV license etc.

Moving day

You need to ensure that the property is clear of all furniture and left in a clean and tidy condition for your Buyers by 

1.00pm at the latest, leaving at least one set of keys with your Estate Agents – we would suggest that any others, including window locks, are left in the property.

Your Buyer’s Solicitor will telephone when they have placed the sale proceeds in the banking system and once, the solicitors have received these, the solicitors will telephone/email you to confirm receipt and to ensure that the property is vacant and ready for your Buyer to move into. The solicitors will also telephone the Estate Agents to authorise release of the keys.

Any Mortgage secured on the property will be redeemed by electronic transfer. The signed Transfer Deed to the Buyer will be dated and sent to the Buyer’s solicitors, along with any other supporting documents that have been provided by you throughout the transaction.

Having received your instructions, the solicitors will arrange for the transfer of the net sale proceeds due to you, be it directly to your chosen bank/building society account or towards the purchase monies needed for an alternative property. 

So, ends one chapter – on to life’s next great adventure!

The solicitors appreciate that moving house can be one of the most stressful situations people experience – Your solicitor will aim to alleviate as much anxiety as possible and be on hand to support and guide you throughout the whole process.


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