Conveyancing Information & Advice

How long will it take?

Normally a matter takes 4-6 weeks to exchange Contracts and a further 7-21 days to completion. Timescales can vary considerably depending upon the circumstances, and in particular if you are involved in a chain of transactions. We will do everything possible to ensure your sale or purchase is dealt with quickly and efficiently.

Why does a Buyer need a Local Search

The Local Council keeps records of certain things which may affect the house which is being bought. It is vital to check them before exchange of Contracts. These include road schemes, planning, compulsory purchase and tree preservation orders. There are limits to the matters revealed. For example, the local search does not cover the possible development of any nearby land and you should contact the planning department of the local council for the area of the property for such information.

Buyer’s Mortgage Offer?

When you receive the formal written Mortgage Offer please read the conditions carefully. Look with particular care at the deductions e.g. retention. You should check your Mortgage does not have undesirable insurance conditions or penalties if you repay it earlier than its fixed term.

Buyer’s Surveys

A Buyer purchases a property in its existing state and condition and it is not normally possible to require the Seller to pay compensation once Contracts have been exchanged. As a Buyer it is essential that you check the physical condition of the property you are to buy. If you are having a mortgage the lender will insist that they arrange and you pay for a valuation and survey. Most, but not all, lenders will let you see that report. These reports are not detailed and you should not rely upon them as you will probably not be able to claim against the Surveyor if he makes a mistake. We therefore advise Buyers to have a private survey which can be either by the same Surveyor or an independent Surveyor. This will cost an extra fee, but is in our view, essential. Check first to see how much it will be. Sometimes the Surveyor will suggest further specialist surveys if he has cause to suspect particular problems in say, drains, heating, wiring, plumbing, timber, damp or structure. We recommend specialist reports and/or estimates and quotes are obtained as soon as possible.

After surveys are completed further negotiations may be necessary regarding price reductions or for the Seller to undertake repairs.

Plan of Property

Should we have a land registry plan or deed plan of the property you are buying we will send a copy to you. If you are not sure whether the plan is correct you should check by making another site visit or if necessary ask your Surveyor to confirm its accuracy. Any discrepancy will need to be resolved before Contracts are exchanged.

Contract Deposit

The purchase Contract will normally provide that on exchange of Contracts a sum to make up 10% of the purchase price must be paid by the Buyer’s Solicitors to the Seller’s Solicitors. This figure may be negotiable if such an amount cannot easily be found, but Seller’s Solicitors do not normally accept less than 5% of the purchase price.

We will inform you if you are a Buyer of a property of the amount of the deposit that will have to be paid on exchange of Contracts. If you are selling as well, we can normally apply the Contract deposit paid by your Buyer towards the deposit you must pay on your purchase. If you are paying funds to us by personal cheque either at this stage or prior to completion, please allow us 5 working days for clearance so that we can comply strictly with the Solicitor’s Accounts Rules.

Buildings Insurance

Normally your lender will arrange the buildings insurance if you are buying with a mortgage. If not, then you should arrange to insure the new property from the date of exchange of Contracts.

Contents Insurance

You will also need to insure the contents of your new property. These are usually covered under a separate policy. You should arrange contents insurance yourself unless you have agreed specifically for your lender to do so on your behalf.

Reminders for you?

Before you agree the completion date, you should check the availability of removers and make a provisional booking with commitment. Following exchange of Contracts, a definite booking should be made.

Any new endowment policies required in connection with your new mortgage should be put on risk on exchange of Contracts.

You should arrange well in advance for the connection of gas, electricity, water and telephone services and for appropriate meter readings on the day of completion. Please remember to cancel your standing order in respect of your existing mortgage instalments and any standing orders for other outgoings relating to your existing property. Arrange at the post office for redirection of you mail this can take up to 10 days so make your enquiries early. You should also notify your present local authority and water company of your date of departure so that any council tax and water rates you have paid in advance can be refunded to you, and the local authority and water company of the district you are moving to, so that you can make arrangements with them for future payments.

Matters you can leave to us

We will repay your existing mortgage on your behalf out of the proceeds of sale on completion and if buildings insurance has been arranged by the lender we will ask for the policy to be cancelled and for any refund of premium to be sent to you direct. We will also ensure that any life policies used for your old mortgage are released. The selling agents (if any) will normally send their account to us and if you approve it and authorise us to do so, we will pay it on your behalf out of the proceeds of sale.

Completion date

This is the day upon which the balance of the purchase price is paid by the Buyer’s Solicitors to the Seller’s Solicitor in exchange for the Deeds, the keys and vacant possession of the property. A Buyer will not be allowed into the house until it is paid for and if you are selling and buying normally you will have to leave one house and move into the other on the same day. A Seller should aim to be able to leave the old home at about 12 noon and to move into the new one early in the afternoon if the distance is not too far. A Buyer should normally be able to obtain keys by 2pm. Usually a Seller will leave keys with the Estate Agent (if any) and they will be released to a Buyer when the funds have been transferred electronically by the Buyer’s Solicitors to the Seller’s Solicitors. Please telephone us at 12 noon on the day of completion to check how the final completion arrangements are progressing. If you are selling, under no circumstances should you release the keys to the Buyer until we have authorised you to do so, which will be after we have received the whole of the sale price.

Stamp Duty

A Buyer pays a government tax (where applicable) that is a percentage of the purchase price

Purchase price Stamp Duty
£0 – £125,000 0%
£125,001 – £250,000 1%
£250,001 to £500,000 3%
£500,001 to £1million£1million plus 4%5%

The Stamp Duty is paid at the prevailing rate for the whole consideration.

There is Stamp Duty relief on the Property if within a “Disadvantaged Area” also for qualifying First Time Buyers up to £250,000.00 which is due to end on the 25th March 2012.

Joint Ownership

If you are buying a property in joint names there is a choice: –

  1. Joint Tenancy whereby the property is owned by all joint owners but with none of them having a separate and distinct share. If one dies the property automatically remains owned by the survivor(s) alone. A joint tenancy can be changed to a tenancy in common (see next paragraph) at any time by one owner giving an appropriate notice to the other(s). It can also automatically change in other circumstances e.g. bankruptcy of one owner.
  2. Tenancy in Common whereby each owner has a separate and distinct share e.g. 50/50 or 75/25. If one dies his/her share is not automatically transferred to the survivor(s) but will pass under the provisions of the deceased’s will or if there is no will under the laws of intestacy. We will ask you which of these you prefer and can advise as to which would be the more suitable for your personal circumstances.

Paying your new mortgage

At about the same time as they send us the mortgage advance cheque your lender will write to you confirming the amount of your monthly mortgage repayment and the date upon which the first and subsequent instalments will become due and giving you details as to how to pay. It is worth checking with your lender whether there is any advantage in completing at a particular time of the month.

Wills

Everyone who buys a property should make a Will or review their existing Will if they already have one. We recommend (without obligation) that whilst you are in contact with us you take the opportunity to make or review your Will. The legal fees involved are relatively small.

Other Legal Services we offer

Our Clients do not often realise the size of our firm and the types of work we can assist with. We can help with all property matters, matrimonial problems, wills trust and probate and most other legal problems. Should you, or any of your family or friends, require any legal services; please do not hesitate to contact us, again entirely without obligation.

Conclusion

These notes do not cover every aspect of the Conveyancing process but we have tried to set out simply and clearly the main stages, offer basic advice and answer some of the queries that often arise. We will however keep in close touch with you as the transaction proceeds and we will do all we can to make sure your move is easy.

How long will it take?
If the property is empty and the buyer does not require a mortgage, a sale or purchase can all be completed in a few days, but this is very unusual.

However it is more likely that a mortgage will be required and there will be a chain of transactions and if that is the case it will usually take 4-6 weeks to exchange contracts and then another 2-4 weeks between exchange of contracts and completion making a total of 6-10 weeks from start to finish.

We always do all that we can to progress your transaction as quickly as possible but we cannot offer any guarantee about this and you should not believe anyone else that does!

How soon do I need to pay any money?

Usually if you are purchasing a property your solicitor will ask you for approximately £300.00 at the beginning to cover the search fees that will be paid out on your behalf. The balance of the price and the solicitors costs etc will be payable shortly before completion unless you are borrowing more than 90% of the purchase price in which case it may be required prior to exchange of contracts (see also “How much deposit must I pay”).

If you are just selling you will not need to pay any money in advance.  The costs and agents fees will be paid out from the sale proceeds on completion before any balance is sent to you.

Do I need a survey?

If you are obtaining a mortgage a valuer will inspect the property on behalf of the lender. Although his report will give you an indication as to whether he thinks the property is worth the amount that you have asked to borrow you will probably not be able to rely on it if things go wrong.

For an extra fee you will usually be offered the option to arrange for the same valuer to carry out a more detailed “Home Buyers Report”. This can be relied upon by you so if at a later date you find a problem that is not mentioned in the report you will have some redress against the valuer.

If the property is quite old and you are particularly concerned about its condition, you can obtain a full structural survey report which is even more detailed.

Always remember the golden rule is “let the buyer beware” so (provided you have not been misled) you will be liable for any problems that you discover after exchange of contracts.

How much deposit will I need?

It is normal for a deposit to be paid on exchange of contracts. Although many people think 10% is required that is often untrue. If you are buying and selling we can usually use your buyers deposit in connection with your purchase so you will not have to find anything.

If you are just buying the amount of the deposit will usually depend upon the size of your mortgage (if any). If it is less than 90% then you will usually need to find 10% but if you are borrowing more than this we can often persuade the seller to accept whatever amount you are putting in or even just the amount of our costs and disbursements only if you are borrowing 100%.

What searches do you carry out and why?

There are five main types of search that can be carried out and the buyers solicitor will decide which of these are necessary in any particular case:-

Local Authority Search
This reveals details of the planning history for the property and whether the Council are aware of any breaches of planning, also any proposals for new roads or traffic schemes, tree preservation orders, conservation areas and any other matters within the Council’s control that may affect the property.

Drainage Search
This will show whether or not the surface and/or foul water drains run into a public or private sewer.

Land Registry Search
This is carried out just before completion in order to find out if there are new mortgages registered against the property that have not previously been disclosed. If there are, then the buyers solicitor will obviously require confirmation that these will be repaid.

Land Charges Search
If you are obtaining a mortgage the lender will ask your solicitor to carry out a search to make sure that are you are not bankrupt ! Quite often this search will show an entry against someone else with a similar name. If so you will be asked to sign a copy of the result to confirm that it does not relate to you.

Environmental Search
It has more recently been recommended that the buyers solicitor should also carry out an environmental search to see if there are any landfill or waste disposal sites in the area, if the property has been built on an old industrial site and whether there are any risks from contaminated land, toxic emissions, flooding, subsidence etc.

Can I exchange contracts before I receive my mortgage offer?

If for any reason the mortgage offer is declined or delayed or it contains any conditions that you cannot comply with the money may not be available when required so it would be extremely dangerous to exchange contracts without it and any competent solicitor would strongly advise you not to do so.

Is there anything I can do to save paying stamp duty?

 Yes possibly.
If the purchase price is just above the stamp duty limits (£125,000.00, £250,000.00 and £500,000.00) and the sale includes some fixtures and fittings eg. carpets, curtains, cooker, fridge, freezer you may be able to legitimately apportion part of the price towards the fixtures and the duty will then be payable on the amount of the price agreed for the property only.

For example – If the agreed sale price is £258,000.00 and there are no fixtures the stamp duty payable will be £7740 but if there are fixtures worth £9,000.00 the duty is only £2490 because up to £250,000.00 the  level of stamp duty is only 1% but above £250,000.00 it is 3%.

If you want to “split” the price in this way, you must remember to tell your solicitor before exchange of contracts.

When do I need to arrange buildings insurance?

 Unless the building insurance is being arranged by your lender or it is a leasehold property and the insurance is dealt with by the freeholder, you must arrange buildings insurance from exchange of contracts as the property will be at your risk from that time.

The amount of cover should be the estimated cost of re-building the property if it burns to the ground which is not necessarily the same as the current market value. If you had a survey or you are obtaining a mortgage your surveyor or the lenders valuer will usually have  suggested a minimum amount of cover in their report.

What happens with the keys?

 These are usually left with the estate agents (if any) and the buyer collects them once the money has been paid over on the day of completion.

If there are no estate agents (or this is not convenient), then the seller will hand them direct to the buyer.

Either way it is important that arrangements are made in advance to prevent the possibility of the buyer having to wait outside with the removal van!

Although your solicitor will always try to ensure that everything is finalised as early as possible on the day of completion – and usually this is dealt with by mid-day – there can sometimes be a delay if, for example, your solicitor is still waiting for the mortgage monies to arrive or there is a particularly long chain. If this happens, please don’t panic or become upset because  your solicitor will invariably resolve the problem by early afternoon  – if not sooner !

When will I get my money?

 If you are just selling or there is a surplus due back to you after the completion of your sale and purchase, your solicitor will always try to send this to you on the day of completion or, at the very latest, on the next working day.

Payment is usually made by cheque, but for larger amounts your solicitor can transfer the money direct to your bank if you request this in advance and provide them with your account details. There may be an additional bank transfer fee for this.