House Purchases
We have provided this Guide in the hope that it may explain some of the terms used in purchasing your home, the steps which are usually taken (and the reasons for them), and the factors which dictate when these steps are to be taken.
A short written explanation like this cannot cover all the points which may arise. We hope you will discuss worries of any kind with us, so that we may try to remove the cause of worry.
At this stage, instructions must be taken from the client. It will also be necessary to obtain documentary proof of identity – whether buyer or seller in order to comply with anti money laundering regulations.
Please click below on the relevant stage of the sales process to reveal further information.
You have found the property you want, and the seller has accepted your offer. Some of the most difficult and responsible work has to be done by your solicitor at this stage.
The making of "local searches" and "preliminary enquiries" is by no means a formality.
We shall summarise for you the information obtained about the property and advise you as to the meaning of the provisions in the draft contract.
Transferring the ownership of land is not like transferring the ownership of, say, a piece of furniture or a car. Land is always there, and in the course of time many rights and obligations may be created in relation to it. They are often not evident on an inspection of the property. For example, someone may have a right to occupy part of it, but not be there when you call, a neighbour may have a right to enter the property and dig up the drains in order to inspect or clean his drain.
The public, too, may have claims ‑ perhaps there is a public footpath across the property; the council could have rights in respect of, for example, compulsory acquisition or unpaid charges for making up the road. The planning authority, or the highway authority, are perhaps considering schemes which would affect the environment of the house you are thinking of buying.
Then there is the question: Does the seller really own it and, if so, is he free to sell it? If he inherited the property, were the correct steps taken to transfer legal ownership to him, or is it still outstanding in someone else's hands?
These are only a very few of the snags which arise and which it is your solicitor's duty to discover, if they exist, and advise you about. Conveyancing is the name given to the process of transferring ownership of land from one person to another, the solicitors for the seller and buyer each being obliged to safeguard their client's interests.
When the buyers Solicitor is satisfied with is search results, with the proof of the sellers ownership (title) and with the terms of the draft contract he will be ready to return the draft contract to the sellers solicitor telling him that the buyer has approved the terms and is now ready to enter the contract. The contract is then prepared for the clients signatures.
The exchange of contracts marks the stage in the transaction at which a binding contract comes into existence. Until exchange no contract exists between buyer and seller and either is free to change his mind about the transaction and withdraw from it.
On exchange the buyer will normally pay a deposit. This is customarily 10% of the purchase price and will be held by he sellers solicitor until completion. Completion dates are also set upon exchange of contracts.
The Buyers solicitor sends the Purchase Deed, i.e. Transfer Deed. In some cases the "transfer" or "conveyance" only has to be signed by the seller.
In others it must be signed by the buyer too, either because the buyer must "convenant" with the seller to observe the "restrictions" or because there is more than one buyer and the transfer document contains a declaration of trust.
A few days before completion, the buyers solicitor makes his pre-completion searches to ensure that no last minute problems have occurred with the title to the property.
A few days before completion the buyers solicitor makes his pre-completion searches to ensure that no last-minute problems have occurred with the title to the property.
At the same time as the buyers solicitor is preparing for completion, the sellers solicitor is also taking steps to ensure that completion will proceed smoothly and without delay.
The date fixed for transfer of ownership, on payment of the price. Normally between two and four weeks after exchange of contracts
If we are acting for you as a buyer, there is rather more to be done. We shall send the transfer or conveyance to Inland Revenue for its details to be entered in their records and any necessary duty to be paid.
If a purchase price is in excess of £125,000.00, then stamp duty is payable by the buyer at the rate of 1% of that price. This is a government tax and should not be confused with our professional charges!
Inland Revenue return the document and we shall deliver to the Land Registry the transfer or conveyance with an application to register the title, and also with a cheque for the Land Registry fee.
On the return of the document we shall lodge the deeds with the lending institution. If there is no mortgage, we shall deal with the deeds as you wish.