What is involved in a purchase?
Whilst the precise details of a purchase can vary according to the type of property being purchased and where it is located, the following is an overview of the main steps that we will take on your behalf.
There are three main stages to the legal process of purchasing a property, namely:
- pre-contract stage – what we do before you commit to buying the property;
- post-contract stage –what we do after contracts are exchanged to ensure the property is transferred to you; and
- post-completion stage – finishing off outstanding issues after you have moved in.
We will always make sure that you know what is happening and when things need to be done by you.
- Taking your instructions to act in connection with your purchase. This needs to be as soon as possible after you have found a house you want to buy. You will need to let us know who you are and details of the property you are buying. We will also need to know how you are paying for it (e.g. cash or a mortgage) and if you have a house to sell. We are also obliged by law to ask for evidence of your identity so that we can comply with the strict money laundering duties that are placed upon us.
- Next, we will contact the solicitor/conveyancer acting for the person selling the house that you are purchasing and request from them the various documents that we require. These include a draft contract, evidence that the person selling the property is entitled to do so and various other documents and forms such as planning consents, proof of rights of way and details of works done to the property.
- Whilst we are dealing with this, we will send questions to those organisations and authorities that might hold information relating to your property. These are called searches and cover matters including gas, electricity and water, planning, potential problems such as mining, flooding or subsidence and we will check to make sure the seller is not bankrupt. The nature of the searches will depend upon where the property is and what affects it. These searches need to be paid for so we will ask you for an upfront payment which will depend upon the searches needed.
- Once we have the replies to these searches, we will check them and the other documents we were sent to see if there is anything with which we are not happy and to make sure that we have been supplied with enough information. Having done so, we will raise what are known as pre-contract enquiries of the sellers so that potential issues can be resolved before you commit to buying the property. Basic replies may already have been sent to us, so we may just need to ask a few additional questions at this point.
- If you are buying the property with the help of a mortgage, we will make sure that it meets with your needs. In most cases we will also be acting for the company providing you with your mortgage – who will have an interest in making sure that the property you purchase provides adequate security for any loan you receive.
- If the property you are purchasing is a leasehold property then we will advise you as to the implications of this, any conditions in the lease which you need to be aware of and how it differs from the purchase of a freehold. We may also need to ensure that any service charges have been paid up to, that the covenants in the lease have been observed and that any necessary consents have been obtained.
- If the property is subject to duties of a service or management company, we will check to make sure that all obligations have been complied with and that any required payments have been made.
- We will advise you where appropriate on joint purchases.
- When everyone is happy that the legal issues are resolved and you are ready to go ahead, you will sign the contract and we can “exchange contracts” (enter into a binding agreement for you to purchase the property). The timing will usually depend upon any sale you have or on the person you are buying from being able to exchange on their purchase. This is one of the things that can hold up the transaction.
- At the same time as contracts are exchanged we will agree the date upon which the purchase will be finalised – that is when the property will become yours – known as the “completion date”.
- Usually, you will need to pay a deposit of 10% of the purchase price when you exchange contracts. Sometimes a lesser sum can be agreed. The deposit shows you intend to proceed with the purchase, and you may lose it if you pull out of the transaction after exchange of contracts.
- After we have exchanged the contracts, we will begin the work leading to completion.
- We will draft the purchase deed and have it approved by the seller’s solicitor/conveyancer. We will complete the mortgage documents if any, carry out any final searches – for example Land Registry searches – and then make sure that everyone else in the transaction is ready to go ahead. There is often a “chain” of transactions all of which need to happen on the same day if your purchase is to go ahead.
- When the documents are all agreed we will get you to sign them in readiness for completion.
- We will calculate the final details of the finances and get from you and the mortgage provider the money which we need to complete the purchase. This will include any other payments that still need to be made such as the land registration fee and any stamp duty land tax. We cannot go ahead unless we have all of the money needed.
- On completion day we will, provided everything else is in order, transfer the balance of purchase money to the seller’s solicitor/conveyancer and receive from them the deeds and documents relating to the property. We will check with you about this so that you can make appropriate arrangements to get the keys to the property and move in.
- Note that until the money is received by the seller you will not be able to move into the property – even if you have had to move out of your old property.
- Once completion has taken place, we will then be able to finalise the paperwork and arrange for the payment of the stamp duty land tax.
- Once the tax is paid, we will arrange for your title to the property to be registered at the Land Registry.
- When registration is complete, we will then deal with the documents. If you have purchased the property with the help of a mortgage, then the documents will be sent to the mortgage provider as their security for the loan to you. If you purchased without a mortgage, then we will send the deeds to you or retain them in our strong room on your behalf if you wish us to do so.