Buying your new home can be an overwhelming process and our simple step by step guide is designed to help you understand the process and what is involved.
Step 1: Instruct your Conveyancer
- Once you decide to buy a property you should consider which conveyancer you would like to act on your behalf and obtain confirmation from them that they are able to act in the purchase of your property
- The Conveyancer will provide you with an estimate of the costs and expenses ( such as Land Registry fees) for the matter
- You should then confirm to the Conveyancer that you would like them to act on your behalf
- Your Conveyancer will send to you :
- A client information letter which sets out the information you need to be aware of such as who will be dealing with the matter, the costs and the work they will carry out.
- Terms and conditions of business
- Request for Identification documents
- Request for proof of deposit
- If you are receiving a gifted deposit there may be further requirements to be met and you should discuss this with your Conveyancer
- You should return the signed confirmation of instructions and take your identification documents to your Conveyancer together with evidence of your deposit. Doing this at an early stage will avoid delays later in the transaction
Step 2: You have an offer accepted
- Your Conveyancer will receive a Memorandum of Sale from the Estate Agents marketing the property which sets out the names and of the sellers, the buyers, both parties’ Conveyancers details, the property details and purchase price.
- If there are no Estate Agents involved then your Conveyancer will ask you for the details for the seller’s Conveyancer so that they can contact them.
- Once your Conveyancer has the seller’s Conveyancer’s details they will then request the ‘Contract Pack’ which contains:
- The Property and Leasehold Forms completed by the seller
- Fixtures and fittings form completed by the seller which details what they will leave at the Property
- The Draft Contract
- The Land Registry title documents
- Any other supporting documents
- You should also commence any mortgage application which you need to make to fund your purchase as this can take some weeks to be offered
Step 3: Before Exchange of Contracts
- Once the Contract Pack is received your Conveyancer will review these documents and will often check the Land Registry title plan with the you before putting in hand ‘searches’ on your Property.
- The ‘usual’ searches carried out are:
- The Local Authority Search – this checks planning and building regulation approval for the property and works carried out, as well as road adoption, traffic schemes etc
- Drainage and Water search – this provides information as to whether the property is connected to Mains Water and Mains Drainage and if there are any sewers or discharge pipes within the boundaries of the property
- Chancel Search – this advises whether there is any potential liability on the owners of the Property to contribute towards the repair of the chancel of the local church
- Environmental Search – this provides information in relation to potential environmental risks in the area, such as flooding , ground stability and land contamination
- The Seller’s Conveyancer will provide a Management Pack/LPE1 information. This is effectively all of the management information regarding the property and can include:
- The last 3 years accounts
- Details of the Landlord and Management Company requirements that you and the buyer need to comply with before completion
- Statement of account
- Fire Risk Assessment , Health and Safety Report, Asbestos Report
- Any section 20 notice which sets out details of planned major works
- Estimated service charge budget for the current year
- The Management Pack /LPE1 information is provided by either the Landlords or the Managing Agent . On completion they are likely to have a set of requirements which you need to comply with before they will transfer the Property Account into your name. These can include:
- Service notice of transfer and notice of Charge (mortgage)
- Deed of Covenant with the Management Company. This document confirms that you will comply with the covenants and terms of the Lease.
- You may obtain a share in the Management Company on completion.
- The Land Registry may require a certificate to be issued by the Management Company confirming that we/you have complied with the above 3 requirements
- There are likely to be further charges in relation to the above documents payable to the Management Company or Landlord on completion.
- The Lease may provide that the Landlord needs to grant a Licence to Assign (consent to transfer) before the property can be sold. You should check this with your Conveyancer at the earliest opportunity.
- You should check the term of your Lease as soon as possible . If the term remaining is under 75 years then it may be undesirable as many lenders will not lend against this and it may restrict you in finding a buyer in the future. If the Lease does have less than 75 years remaining when you come to buy then you should discuss this with your Conveyancer
- It would be advisable to arrange to have a survey conducted on your property in addition to the usual lenders valuation which is purely for the benefit of the lender. If the survey flags up anything major you may want to negotiate over who will fix this or even renegotiate over the sale price. Your conveyancer would advise you on this matter.
- Once your Conveyancer has reviewed the search results, forms and Land Registry Title they may raise questions to clarify anything which they are unsure of.
- Your Conveyancer will check the replies provided by the sellers to make sure they are satisfactory
- Your Conveyancer will receive a copy of your mortgage offer and send you the mortgage deed for signing
- You should return your mortgage deed as soon as possible in order to prevent delays further in the transaction
- When your Conveyancer is happy with the replies they will report to you with the contract for signing.
- The Buyer will then need to make sure they are happy with everything their Conveyancer has advised them. If you are happy you will need to sign and return the contract to your Conveyancer together with the deposit and any other signed documents they may require before exchanging.
- By this stage the seller’s Conveyancer will have sent them a copy of the contract for signing as well
Step 4: Exchanging contracts
- You and the seller will need to have agreed a completion date before the Exchange of Contracts can take place and you will need to provide the deposit to your Conveyancer (usually 10%) unless this is coming from your sale of another property
- Completion is generally between 1 – 3 weeks following Exchange of Contracts but is dependent on what is agreed between you and the Buyer.
- The Exchange of Contracts is usually done by both Conveyancers making sure the contracts are identical ( this is carried out during a telephone conversation) and then immediately sending them to one another in the post
- If you or the sellers are in a chain the Conveyancers will do the same thing, but will only release it if the other people in the chain are all happy to go ahead. This means if one person pulls out or delays, then everyone in the chain may be held up.
- Exchanging Contracts makes the sale legally binding and you could be imposed with penalties should you not complete on the completion date set out in the contract.
- If you pull out, they can take action forcing you to complete or you may be liable for their fees. If you have any concerns in relation to this you should take your Conveyancers advice on the matter
- Once exchange of contracts has taken place, you can instruct any removal companies to assist with the move on the day
Step 5: Between exchange and completion
- The Seller will still own the property until completion. The contract will usually provide that the buyer is to insure the property between exchange and completion.
- Your Conveyancer will request any mortgage advance
- Your Conveyancer will draft a completion statement and let you know if any further monies are required from you to complete the purchase
- If you have not signed a Transfer Deed ( this is the document which the Land Registry require to transfer the legal ownership of the Property) before exchanging contracts then you will need to make sure you do before completion.
- The Seller’s Conveyancer will calculate any Ground Rent and Service charge apportionments which may be due back to the Seller on completion . They will advise your Conveyancer who will request this sum from you on completion with the rest of the balance monies.
Step 6: On completion day
- Your Conveyancer will make arrangements with the seller’s Conveyancers to send them the money on the day of completion. Once the seller’s Conveyancers have received the purchase money then they will instruct the Estate Agents/Seller to hand over the keys
- Your Conveyancer will arrange to make the payment of Stamp Duty and submit the Stamp Duty form to HMRC.
- The seller’s Conveyancer will send the signed Transfer Deed to your Conveyancer along with any other documents they hold in respect of the property
- Your Conveyancer will deal with any post completion requirements for the Management Company or Landlord, such as the notices, deed of covenant, transfer of shares, certificate of compliance .
- Your Conveyancer will then ensure that the change of ownership is registered with the Land Registry and send you a copy of the registered title together with any other documents received in respect of the property from the sellers Conveyancer.
- You should make sure you check this to ensure the details are all correct and you have all documentation that you expected to receive.
For further advice on this and other Residential Property issues contact our Residential Property department.
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