A Guide to Buying and Selling Residential Property
After finding a property you like, the process from having your offer accepted to completion of the sale takes about 10 to 12 weeks.It is important to have a good understanding of the process as it will help you to avoid some of the most common pitfalls of home-buying.
What is Conveyancing?
The term 'Conveyancing' refers to all the legal and administrative work associated with transferring the legal ownership of properties from one party to another. The conveyancing process starts after an offer has been made and accepted for a property, and solicitors' details have been exchanged.
Buying with someone else
You may choose to buy your property jointly with someone else, such as your husband, wife, civil partner, partner, relative or friend. If you buy your property with someone else, you can choose to do this in one of two ways, as either:
- beneficial joint tenants, or
- tenants in common.
If you are thinking about buying a property with someone else, you should consult Crellins Carter about the best type of ownership for you.
Beneficial joint tenants
If you own your property as a beneficial joint tenant, this means that it belongs to you and the other owner(s) jointly. You can't re-mortgage or sell the property without the agreement of all the other owner(s). However if there is a dispute, an owner can apply for a court order.
As a beneficial joint tenant, you don't own specific shares in the property and you can't give away a share of the property in a will. If you die, your interest in the property passes automatically to the other owner(s).
Tenants in common
If you own your property as tenants in common, this means that it belongs to you and the other owner(s) jointly, but that you all also own a specific share of its value. It is up to you to decide how much each share will be.
You can give away, sell or mortgage your share. If you die, your share of the property does not pass automatically to the other owner(s). You can leave your share to whomever you like in your will.
The Legal Process
Although it is impossible to give a precise idea of how long the legal process will take, it is possible to offer guidelines. From having an offer accepted to exchange of contracts can take up to seven weeks and from exchange of contracts to completion can take up to four weeks. However, if there are any problems the time taken may be longer.
Whether you are a buyer or seller most property transactions involve the following stages:
- Negotiation
- Pre-Exchange
- Exchange of contract
- Pre-Completion
- Completion
Negotiation
The price at which you buy and sell a property is for you to negotiate personally or through the estate agent. Any offer you make should be made “subject to contract” and “subject to survey”. Once negotiations have been completed a buyer should apply for a mortgage and arrange a survey.
Enquiries
Once you have instructed us, we will draw up a contract for the property you are selling. If you are buying, this is drafted by the seller’s solicitor. However, before the contract can be signed, we will ensure that there are no problems with the ownership of the property, rights of way, access, or future developments in the area that might affect the property. This is called ‘making enquiries and searches’.
· Local searches. These are enquiries made to the local authority about any matters which affect the property which involve the local authority, such as whether there is a compulsory purchase order on the property. Local searches also include questions about any proposed changes or development in the area that might affect the property such as roads, housing and shops. During the local search, the local Land Charges Register is also checked. This gives information about any matter which affects the property such as planning permissions; tree preservation orders, if it is a listed building or in a conservation area;
· Enquiries made to the seller. These are a set of standard questions about the property, boundaries, neighbour disputes and fixtures and fittings that will remain in the property. There may also be additional questions that we think are necessary such as restrictive covenants affecting the land, the transferability of guarantees for any work done on the house, for example, a damp proof course;
Arranging to pay the deposit
Whilst we are making the enquiries, you should sort out how you will pay the deposit that has to be paid when the contracts are exchanged. This deposit is traditionally 10% of the purchase price but it can vary. If you are also selling a house, it is usually possible to use the deposit received on the property being sold towards the deposit on the property you are buying. If raising the deposit is a problem, you may consider borrowing the money from relatives or you could try to get a bridging loan from a bank.
Insuring the property
You should make sure that buildings insurance is arranged from the date of exchange, because once contracts have been exchanged you are responsible for the property.
Exchange of contracts
The final contract between you and the seller is exchanged when:-
- we are satisfied with the final outcome of all the enquiries
- any surveyor’s report has been received and any necessary action taken
- the formal mortgage offer has been received
- we have reported to you on the title of the property
- arrangements about the payment of the 10% deposit have been made
- a date for completion has been agreed.
You and the seller each have a copy of the final contract which you must sign. These signed contracts are then exchanged. At exchange of contracts both you and the seller are legally bound by the contract and the sale of the house has to go ahead. If you pull out, you are likely to lose your deposit.
You should make arrangements for the supply of gas, electricity and telephone service and make sure that the seller is arranging for final meter readings to be made.
Pre-completion
Before completion we will prepare the transfer deed and mortgage deed for you to sign and a certificate of title for your lender. We will request they transfer the mortgage money in time for completion. We will prepare the financial statement and ask you for the balance of money including stamp duty and legal fees.
If you are selling we will obtain a redemption figure from your existing lender and an invoice from the estate agents.
Completion
Completion of the purchase usually takes place two to four weeks after exchange of contracts, although it can be earlier. On the day of completion:-
- the mortgage lender releases the money
- the deeds to the property are handed over to us
- the seller must hand over the keys and leave the property by an agreed time.
On completion we also deal with the re-payment of your existing mortgage if any from the sale proceeds, the payment of any stamp duty land tax and registration procedures.
