The conveyancer acting for the seller will prepare a legal information pack which will include a draft contract, a fixtures, fittings and contents form, a property information form and the legal title to the property.
When making a purchase requiring a mortgage you will have already secured a mortgage in principle to prove you’re a legitimate buyer but at the point your offer is accepted you will need to complete a formal mortgage application.
The mortgage lender will arrange a valuation on the property to ensure the property value matches the purchase price. You will then be sent a copy of the formal offer and your conveyancer will receive this at the same time
As a minimum, your appointed conveyancer will need to apply for three different searches:
- Local authority search
- Water and drainage search
- Environmental search
In addition to these, your conveyancer will also receive the legal information pack mentioned above and raise enquiries relating to the property, to ensure you have all the information you need.
There may be other chargeable searches such as bankruptcy and anti-money laundering checks.
While your conveyancer will do their due diligence to find out as much about the property as they can, this does not include the physical condition of the property. Therefore, you need to arrange a property survey or any specialist reports such as electrical or damp reports. A property survey can often be arranged through your mortgage lender or by your instruction via third party suppliers.
It is always recommended that you should have a full survey as the lender survey is a basic valuation survey and may miss important structural items and possible build over and planning issues. You need to read your survey thoroughly and understand the content and any implications highlighted.
Once your conveyancer has received the results of their various searches, replies to the enquiries raised by the other side, and confirmation of your mortgage offer, they will compile a full report on the property which they will send and arrange for you to sign your part of the contract. You need to read the report carefully, so you are aware of all the factors which affect the property you are buying. It is your responsibility to satisfy yourself with any items reported to you.
For a freehold purchase, on average, it usually takes around 14-16 weeks to reach this point, but it is around 16-18 weeks for a leasehold purchase. Once the contract has been signed by both parties, the conveyancers will then ‘Exchange Contracts’ and the property transaction becomes legally binding.
You will need to have your buildings insurance in place at the point of exchange. Lots of people question this as the property is then insured by both parties. The common law position is that the risk of damage or destruction of the property passes to the buyer on exchange of contracts unless the contract provides otherwise.
It is therefore imperative that a buyer takes out their own policy of insurance which will be effective immediately upon exchange of contracts.
Completion can sometimes be on the same day as exchange, however, if a mortgage is involved, you will usually need a week between exchange and completion. The completion day is the final part of the conveyancing process and is the day you finally get the keys to your new home.
If you are taking out a mortgage on the property AND the insurance is being arranged by the lender then it is likely the lender will have the property insured from exchange of contracts. You MUST, however, check with the lender that this is the case. Do not leave this until the last minute.
If you are not having a mortgage or you have chosen not to let the lender deal with insurance, you will be responsible to arrange the buildings insurance. The seller has no obligation to you to insure the property other than in certain circumstances, for example, where the property is leasehold, or the contract provides otherwise.
Self-conveyancing or DIY conveyancing is possible for a mortgage free transaction, but rarely occurs these days.
If you’re taking out a mortgage on a property you intend to purchase, then your mortgage lender will insist on you instructing a conveyancer. If you are selling and have a mortgage to repay, the buyer’s solicitor would insist the sale processed are paid to a solicitor who would discharge the existing mortgage. In addition, any party not represented by a conveyancer or solicitor would need to take steps to have their identity verified by a regulated professional.
A local conveyancing solicitor should be people’s go-to preference. There are good reasons for this such as the conveyancer having good local knowledge of the area and the types of property and the local items needing to be searched such as Radon Gas, mining, boundaries etc. It is becoming more common now for property buyers and sellers to consider ‘online conveyancing’ from a national conveyancer or “bucket shop conveyancer”. Whilst this is usually cheap you do get what you pay for.
It will ultimately come down to whose services best suit your needs.
Using personally recommended firms and individuals is a good place to start.
You may find you are put under pressure from the estate agent to not use one firm and to use one they recommend. It is usually the case that the agent is being paid a referral fee from the firm they try to push you on to and they are not receiving anything from the firm they are trying to dissuade you from using.
We recommend that you never use the firm, individual or broker that the agent wants you to use. It is current practice of some estate agents especially the ones who employ sales progressors to try to dissuade clients from using a lawyer who is “Picky” and asks too many questions. A “Picky” lawyer is exactly what you need when making such a large purchase. No stone left unturned is a good thing when buying property. Time taken over your purchase means you should not have any issues when you come to sell because your lawyer has been thorough.
Remember your lawyer has you, their clients best interest at heart. The same cannot usually be said for anyone else. During the process.
The average referral fee demanded by the agent from a law firm and broker combined is approximately £500.
Yes, if your property purchase is above £250,000.
There are different rules for First Time Buyers (see below), owners of more than one property and non-UK residents.
To find out more about the current stamp duty rates see here.
For first time buyers, the fees paid aren’t likely to be much different to those who have purchased a property previously. There are however different Stamp Duty Land Tax rates, with no SDLT payable for properties worth up to £425,000, compared with up to £250,000 for those who have owned property before.
The fees paid to your conveyancer will still be the same regardless of if you’re a first-time buyer or previous homeowner. Yet, there are several schemes to help support first-time buyers to get on to the property ladder – take a look here for further detail on what help you could get as a first-time buyer.
The overall cost of property searches depends various factors. When doing your research into appointing your conveyancer, searches are likely to be estimated as part of disbursements assuming at the very least you will need local authority searches, environmental searches as well as water and drainage searches which are approx £300 – £400.
Please feel free to contact us if you need any guidance or a quotation to help with your property legal needs.