Conveyancing

In normal circumstances the conveyancing transaction follows the following activity plan and time scale. However, this plan does not take into account the time necessary to obtain the agreement of your lender to provide you with a mortgage.

Seller’s Solicitor

Stage 1. Before the exchange of contracts

• Obtain client proof of identity/present address
• Take instructions
• Obtain Deeds
• Prepare draft contract
• Deduce title & send to buyer’s solicitor
• Prepare property information forms
• Reply to any preliminary enquires & requisitions
• Agree contract
• Seller signs contract

Stage 2. After exchange of contracts

• Exchange contracts
• Take deposit
• Seller signs transfer

Stage 3. on ‘Moving Day’ (completion)

• Complete
• Account to seller for sale money

Buyer’s Solicitor

• Obtain client proof of identity/present address
• Take instructions
• Local searches
• Mining Report and chancel checks
• Other relevant reports
• Investigate Deeds & send any enquiries to seller’s solicitors
• Check replies
• Receive Mortgage offer and check
• Agree contract
• Buyer signs contract
• Exchange contract and pay deposit
• Draft transfer & send to seller’s solicitor
• Make final (pre-completion) searches
• Complete
• Stamp & register the transfer, pay stamp duty where it applies

The procedure for buying a new home is reasonably simple. Complications can arise when you are selling your old home and buying a new one on the same day. Synchronising the exchange of contracts and agreeing a mutually acceptable completion date can be tricky and sometimes calls for patience and ingenuity. If you are selling as well as buying it is important to instruct your solicitor well in advance so that they can do all the necessary to be able to act quickly once you have found a suitable buyer. When it comes to selling your house, you can either market the property yourself by putting advertisements in the local newspaper or you can use an estate agent. Normally a sole agency, which is where you have your property on the market with one agent only, will come out a little cheaper than if you put your property on the market with a lot of agents. A sole agent is also more likely to make a greater effort on your behalf but you should understand that sole agency also includes sole selling rights. The agent is entitled to commission even if you sell your house privately yourself. For this reason, it is generally advisable to appoint a sole agent for a limited period, say two months, and then review the position. If you are unsure what estate agent to use bear in mind that different high street estate agents have different ways of working. Some will happily refer you to a local solicitor for a referral fee paid by the solicitor to the estate agent. Some local agents you might like to consider are:-

• Bob Gutteridge and Co
• Bramptons
• Follwells
• Austerberrys
• Keates Hulme

You will doubtless have read that moving house is one of life’s most stressful occurrences. Keep calm throughout but ensure that the kettle and corkscrew are readily available when you move in.

If we have not acted for you before, it is necessary for us to ask you to produce a suitable form of identification. Please let us have sight of your Passport or similar identification. Regrettably regulations require us to satisfy ourselves regarding this point, particularly if you are having a Mortgage it is a requirement laid down by the Council of Mortgage Lenders. We also require proofs of address.

The cost of Searches, Stamp Duty and Land Registry fees are calculated using established scales. We can in most instances advise you on these costs when you first instruct us to act on your behalf. You will receive a quote for the total costs at the outset.

The cost of Searches, Stamp Duty and Land Registry fees are calculated using established scales. We can in most instances advise you on these costs when you first instruct us to act on your behalf. You will receive a quote for the total costs at the outset.

A personal inspection of the property is most important and since this is usually carried out in the early stages, should serve to compliment the survey report. There may well be things that you see at the property or come to light in discussion with the seller or selling agent that you will want to discuss with your surveyor. We cannot stress enough the importance of your satisfying yourself prior to exchange of Contracts that the property is to your satisfaction and in particular, that all appliances, electrical, plumbing and heating system are sound and in good working order. It will be too late afterwards Very often the run of storm water and foul drainage pipes are evident from inspection covers located within the boundaries of the property. It is always advisable to be aware of their position in relation to the building. When inspecting the property you should also be alert as to whether or not there are any gates in the boundaries giving access to adjoining properties whose pathways show use by neighbours. Such a gate and path may reveal acquired rights of way by neighbours which could prove to be a problem.

Most of the procedures buying also apply to flats. There is however one important difference. With a flat you may be buying a lease. Leases tend to be very complicated and cover such things as pets, maintenance, cleaning, repairs, ground rents, gardens, roofs, foundations, car parking, insurances, neighbours and service charges. We will discuss all the points set out in the lease during the transaction.

In all cases we advise clients to obtain a comprehensive survey report on the fabric and structure of the building before Contracts are exchanged. Even well decorated, refurbished properties can disguise potential problems! If you are having a Mortgage then you should discuss the matter of surveys with the lender. You must not simply rely on the lenders valuation.

Don’t rely on the Building Society valuation. The Building Society only inspects the property to see if the valuation is justified before the loan (mortgage) is granted. This is not a full structural survey. Legally the Seller is not bound to give any guarantees as to the condition of the property, the Buyer purchases it as seen. We may recommend a structural survey or a House Buyers Report by a qualified Surveyor. If the surveyor finds work that needs doing, it may be possible to negotiate a lower price with the Seller in order to cover the cost.

Let us assume you have found the house you wish to buy. You will negotiate terms for the purchase and unless you are a first-time buyer, you will also negotiate terms for the sale of your present home. At this stage, everything is “Subject to Contract”

By this stage you should have written confirmation of your Mortgage Advance from the Building Society, Bank or Insurance Company. If for any reason you have not arranged a Mortgage, we can help you to do so.

In older properties, a specific survey is sometimes advisable. Most firms that specialise in these problems will conduct a survey free, or for a nominal charge.

Anything that is fixed permanently to the house or land, such as baths and built in cupboards is normally sold as part of the property. However, the Seller may wish to remove certain fixtures and fittings. The Seller and Buyer should both know exactly what items are included with the property. If a separate price can be fixed for the furniture, carpets, fittings etc. it may be possible to reduce the amount of Government Stamp Duty you have to pay. That is why we ask that all items that are, or are not, to be included in the sale or purchase of a property are documented fully.

Now the seller’s solicitor prepares a contract for the buyer’s solicitor. For this purpose he will need to obtain the Title Deeds to the property, these are normally held by the Building Society, Bank or Insurance Company – as security against the mortgage. Once all the relevant documents have been received and the Draft Contract prepared, the Seller’s solicitors will send two copies of the Contract plus the other documents to the Buyer’s solicitors for approval. If the contract is approved, one copy is kept and the other is sent back to the Seller’s solicitor for signature. These contracts are eventually exchanged and the transaction then becomes legally binding.

Now the seller’s solicitor prepares a contract for the buyer’s solicitor. For this purpose he will need to obtain the Title Deeds to the property, these are normally held by the Building Society, Bank or Insurance Company – as security against the mortgage.

Up to the exchange of contracts nothing is binding. All you have is a Gentleman’s Agreement. The Seller can still sell his house to somebody else but this usually only happens for one of two reasons. He may have received a higher offer from another Buyer, in which case you have been “gazumped”. Alternatively, he may have issued more than one contract and is waiting to see who will exchange first. This is called a Contract Race. You may also be involved in a chain in which nobody want to exchange contracts on the house they are buying before they exchange on the one that they are selling. Both parties are legally bound only when the contracts are formally exchanged and a Completion Date is agreed. As soon as that happens we will let you know and confirm the completion date.

Once all the relevant documents have been received and the Draft Contract prepared, the Seller’s solicitors will send two copies of the Contract plus the other documents to the Buyer’s solicitors for approval. If the contract is approved, one copy is kept and the other is sent back to the Seller’s solicitor for signature. These contracts are eventually exchanged and the transaction then becomes legally binding.

The buyer’s solicitor will also carry out the necessary Searches. These enquiry forms are sent to the Local Authority and can take 2 – 4 weeks to come back with all appropriate information. This information however will only relate to the specific property being purchased. So if you are worried about the possible developments, drains, new roads, boundaries, rights of way, restrictions, schools or even the risk of flooding, please let us know as soon as possible. You can always make a direct approach to the relevant department of the Local Authority.

You must bear in mind that the local Searches and Enquiries that will be carried out with the Local Authority on your behalf only covers the property. It will not give information as to what is happening in the neighbourhood with the exception of any plans for a new road. If there are open fields or potential building plots near the property, or perhaps local knowledge comes to your attention from discussion with the selling agent or indeed the seller or their neighbours which causes you concern then you should contact the Planning Department of the Council direct and raise your query with them. Their records are a matter of public information and available for your inspection. It will speed up your purchase if you ask the department to let you have copies of all relevant planning or building regulation permissions. We will need to see these.

You must give consideration as to how the property which you are buying is to be held. There are two options as follows: You can own the property as beneficial joint tenants so that if one of you were to die the property would automatically belong to the survivor. This arrangement would take precedence over any will which you might make. You can hold the property as tenants in common whereby you would each own a share that would pass under the terms of your wills. Your share would be dependent upon the contribution which each of you may be making towards the purchase price of the property. Such shares can be stipulated and a separate Trust Deed can be drawn up to reflect the interest in the property which each of you will have. In any event, you must make wills. Please consider this question carefully and let us know before exchange of Contracts how you wish the property to be held. You may wish to discuss this point with us.

On exchange of contracts you will be required to pay a deposit to the sellers’ solicitors. Usually this is 10% of the purchase price but the figure may vary with the amount you are borrowing on the mortgage, or by negotiation.

When the contracts are exchanged the deposit, which is usually 10% of the selling price, is payable to the Seller’s solicitor. Any variation in the amount of deposit will be clarified when contracts are exchanged.

Fire Insurance usually becomes the Buyer’s responsibility from Exchange of Contracts. The Building Society, Bank or Insurance Company will arrange insurance for you. If you are buying a leasehold property it is likely that the landlord will insure. Mortgage Protection Insurance protects your family should anything happen to you. It is not compulsory, but most mortgage lenders recommend it.

Vacant possession is given when the keys are handed over. This can sometimes cause hold-ups if there is a ‘chain’ of completions and nobody will hand the keys over until the money has been paid. Should a situation like this arise, the keys are usually lodged with the Estate Agent. Then we would confirm that the money has been paid so that the keys could be released.

Completion takes place after Exchange of Contracts. In simple terms, the Buyer’s solicitor hands over the money and the Seller’s solicitor hands over the documents that transfer the Title of the land. The Buyer can then move in. In practice, it is slightly more complex. The Seller’s solicitor prepares a Completion Statement and arranges for the Deeds, the Transfer Document and the keys to be handed over. The Buyer’s solicitor arranges for the Mortgage Advance Cheque to be ready. Now we can account to you directly or to your Bank. We submit a Land Transaction Return Form with any Stamp Duty payable, deal with the Life Insurance and registration of the Title at HM Land Registry. When the registration is complete the Title document will be sent to your mortgage lender. If you do not need a Mortgage, we will gladly store your Title document for you, free of charge.

We will have already ensured that the necessary funds are available at Completion, either from the proceeds from your present house sale, from the Mortgage Advance, or a combination of the two. If additional funds are required, you will have been notified before Completion so that it can e cleared. The Solicitors Accounts Rules make this necessary. Alternatively, payment by Bank draft or inter-Bank transfer may be made at any point prior to completion.

Completion takes place after Exchange of Contracts. In simple terms, the Buyer’s solicitor hands over the money and the Seller’s solicitor hands over the documents that transfer the Title of the land. The Buyer can then move in. In practice, it is slightly more complex. The Seller’s solicitor prepares a Completion Statement and arranges for the Deeds, the Transfer Document and the keys to be handed over. The Buyer’s solicitor arranges for the Mortgage Advance Cheque to be ready. Also the following may be dealt with:

• Investigation and proof of title
• Prepare and sign the Transfer
• Further searches
• Making sure all the money is available at Completion

This means paying off any Mortgages on the property that you are selling. If you are a first time buyer, this will not apply. We will arrange for the Mortgage to be discharged and any Life Policies to be re-assigned.

If you are selling leasehold property, the latest receipt for ground rent and any service charges must be provided to the Buyer’s solicitor at completion. Therefore, we would need to receive this information after Exchange so that the necessary apportionment can be made.

If you need a mortgage, the first and most importance advice is to get independent advice. The person to go to is, naturally enough, an Independent Financial Adviser, or IFA. You will find them in the telephone book or we are happy to recommend one. An IFA will have access to many financial packages and can provide immediate quotes from a variety of different lenders. An IFA will also be able to help you decide which type of mortgage is best for you. Whether you need an endowment mortgage or repayment will depend on you financial circumstances, as will the period you want to pay the loan back. You may also need mortgage protection insurance and a good IFA will make sure you get the best deal.

Most of what you have read so far is handled by us, there are, however, certain tings we leave to you so that you don’t feel completely left out. If you own a large van yourself, or don’t mind making lots of journeys in your car you will probably escape paying a Removal Firm to move your furniture for you. However, reputable removal companies are insured for damage and breakages, a point well worth consideration. There is also the structural survey. You will have to budget to pay for the Surveyor’s services. We suggest that before engaging either of these services you obtain estimates, we leave this to you We do not offer any recommendations for removal company services but you may consider trying Pecks removals. Cancel your Building Insurance if you don’t have a Mortgage Make arrangements with the Removals Company by giving them a provisional date until Completion Date is finally fixed. Cancel the Banker’s Order for previous Mortgage instalments as soon as possible after Exchange of Contracts Cancel or Transfer your Contents Insurance. Arrange for the continuation or disconnection of Gas, Electricity and Telephone services. Have the meters read and arrange for the accounts to be transferred to your name.

Now we can account to you directly or to your Bank. We submit a Land Transaction Return Form with any Stamp Duty payable, deal with the Life Insurance and registration of the Title at HM Land Registry. When the registration is complete the Title document will be sent to your mortgage lender. If you do not need a Mortgage, we will gladly store your Title document for you, free of charge.

If your purchase or Sale is being partly financed by you, we will notify you of our costs and disbursements before completion so that all monies can be paid at the same time. If the Mortgage Advance and /or proceeds of sale are financing the purchase, then the costs and disbursements will be deducted on completion and a statement will be provided.

The number of people you should tell that you are moving seems to get ever longer. Listed below are all those we can think of, in no particular order – perhaps you can think of more?

• Family, friends colleagues at work
• Insurance companies – car, home, life, other (you may invalidate your car insurance if you do not tell the insurer)
• Credit card companies
• Utilities – electricity, gas, water
• Local Authority – Revenue department
• Telephone company and mobile networks – divert calls
• Broadband and cable/satellite /TV providers
• Maintenance suppliers – for central heating, burglar alarms or similar
• DVLC – for driving licence and vehicle registration document
• Magazine subscriptions
• Other subscriptions
• Regular deliveries – milk, newspapers, solid fuel, oil, etc.
• The Post Office – divert mail, national, savings, premium bonds, etc
• Television Licence
• AA or RAC
• Clubs or other Associations
• If you own a shotgun or other firearm – Tell the police
• Passport Office (on renewal)
• Premium bonds & Shares or stocks
• Banks & Building Societies
• HP, store cards, catalogues
• Doctor, dentist, optician
• Schools, colleges, university
• Accountants
• Veterinary Surgeon
• Inland Revenue

We will have already ensured that the necessary funds are available at Completion, either from the proceeds from your present house sale, from the Mortgage Advance, or a combination of the two. If additional funds are required, you will have been notified before Completion so that it can e cleared. The Solicitors Accounts Rules make this necessary. Alternatively, payment by Bank draft or inter-Bank transfer may be made at any point prior to completion.