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How long does it
take to buy a house?
The average
conveyance takes between 6 to 8 weeks to complete
from giving instructions to moving in. Being in a
chain can slow things down as the whole chain can
only move as fast as the slowest link.
How can I help speed up
the whole process?
Complete and submit your mortgage application
as quickly as possible to your lender/mortgage
broker. In addition, please respond as soon as
possible to any letters or forms that we send you.
We would of course ask for your assistance in cases
where you would be better placed to obtain
information on our behalf.
Can I pull out
of my Sale/Purchase?
You can withdraw
from the transaction at any time before exchange of
contracts. This means that as a purchaser you could
lose money spent on a survey and searches even
though it may not be your fault that the transaction
has fallen through. After exchange of contracts both
parties are legally committed to complete the
transaction.
When do I pay
the Legal Fees?
You will need to
pay some money up front typically £200 to cover the
cost of searches. The rest of the money will be
requested from you after exchange and before
completion.
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Deposit
Do we have to pay a deposit?
You will have to
pay a deposit if you are a First Time Buyer.
Normally this is 10% of the purchase price. You can
agree with the Seller's solicitor to pay less (they
will usually agree to this if you are borrowing more
than 90% of the purchase price). Normally you do not
have to provide a deposit if you have a sale and a
purchase. This is because you can use the deposit
from your sale towards your purchase. If this
deposit is a lot less than the 10% deposit required
on your purchase then you may be asked to make up
the difference. There are no fixed guidelines on
this and it will be down to the seller and purchaser
and their solicitors.
Do we pay a
deposit on the Sale?
No. A deposit is
paid by the Buyer's solicitors to the Seller's
solicitors when contracts are exchanged.
If we do have to
pay a deposit, when is it payable?
The deposit is
handed over when we exchange contracts, so your
solicitor will need to have cleared funds by then -
i.e. any cheques will need to have cleared before
the deposit can be used.
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Surveys and
Searches
What are the
different types of valuation/surveys?
There are three
types of valuation/survey:
Basic Valuation. This type is not a survey
and is intended as a valuation only and for the sole
benefit of the lender. It is questionable as to
whether or not you would have any comeback against
the Lender's Valuer if he had overlooked something.
You should therefore have a more thorough inspection
carried out buy a surveyor.
Homebuyers' Report.
This is more detailed report on the state and
condition of the property and there may be a
comeback on the surveyor if something be overlooked.
These surveys are subject to a number of get outs.
Full Structural Survey.
This is the most detailed report. The surveyor (as
before) would be liable for any errors in his
report. We are not surveyors and we therefore advise
that at the very least you consider a Homebuyers'
Report. However, if you are in doubt, you should
take advice from a local independent surveyor.
Why do you need
to carry out Searches?
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:-
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.
Local Authority Search
To find out if the Local Authority have anything
recorded against the property that would affect
your decision to buy, for example, a new road
within 200 meters. 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. It will not
reveal if owners of adjoining/neighbouring
properties are planning any private developments.
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.
Drainage Search
This will show whether or not the surface and/or
foul water drains run into a public or private
sewer.
What is a
Bankruptcy Search?
If the transaction is to be funded or partly funded
through a mortgage then it is usual for us to
receive instructions from the mortgage lender to act
on their behalf also. There are therefore additional
obligations upon us, one of which is to undertake a
bankruptcy search against the prospective purchaser
or purchasers.
You have my
search money but haven't sent off the searches, Why
not?
Some local
authorities are not able to carry out a search
against the property until they have a plan of the
property. We obtain a plan from the Seller's
solicitors. There is a potential delay here as the
seller's solicitors will be waiting for the title
deeds and can only send us a plan once they have the
deeds. Some local authorities will do a search
without a plan but this is down to each local
authority.
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Exchange of
Contracts
Can I exchange contracts before I receive my
mortgage offer?
We would strongly
advise you not to exchange Contracts before your
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 very risky to
exchange contracts without it.
We have not
exchanged Contracts - what happens if I back out?
Until you exchange
contracts, you each are free to back out without any
penalty due to the other. The purchaser will have to
write off any conveyancing legal costs and the costs
of any survey and so on. The seller will also have
legal costs, and may have others as well, including
the costs of delay.
Why should this be allowed? Put simply the system
was designed so that expense should be kept to a
minimum until exchange of contracts. The purchaser,
in particular, needs the information before
committing to the decision to purchase. Both parties
need to remember this. It is quite true that when
one party backs out, this causes considerable
expense and frustration to the other, but, as a
conveyancer, I can only say that this affects both
sellers and buyers alike.
Can I exchange contracts and complete on the same
day ?
We do not recommend
this and it seldom brings the completion date
forward.
We have an obligation to act for you fearlessly and
protect your interest and this becomes more
difficult when we are asked to complete in this way.
You should also consider the implications if
completion does not take place. As there is no
contract and therefore no legal comeback if
completion is delayed. Each party would then be
liable for their own costs i.e. removal costs,
additional solicitors fees etc. This method of
completion is most likely to be declined in cases
where there is chain of properties involved.
What does
‘subject to contract’ mean?
All correspondence
and negotiations between a seller and buyer and
their respective solicitors are said to be “subject
to contract” right up until contracts are eventually
exchanged. Often you will see in estate agents’
windows particular properties where offers have been
made “subject to contract”.
In a nutshell, this means that either seller or
buyer who are negotiating the sale or purchase of a
property can withdraw from the transaction without
incurring any penalty right up until contracts are
exchanged.
What are the ‘Standard Conditions of Sale ’?
The ‘Standard
Conditions of Sale’ are incorporated into most
contracts in England and Wales for the sale and
purchase of residential property. They set out the
general procedure and rules governing the transfer
of property and the obligations on either party in
the transaction. If you would like to see a copy of
the Standard Conditions of Sale, please let us know
and we will forward a copy to you. The idea of using
standard terms is to keep the time in preparing and
negotiating a contract (and therefore also the cost)
to a minimum.
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Completion
What does completion mean?
In conveyancing,
completion refers to the time when all terms of the
contract exchanged between the buyer and Seller are
fulfilled. In a nutshell, this involves the balance
of purchase monies (i.e. purchase price less deposit
paid on exchange of contracts plus any
apportionments of ground rent/service charges if
leasehold property) being sent by telegraphic
transfer to the Seller’s solicitors. The Seller’s
solicitors acknowledge safe receipt of the payment,
date the Transfer deed and send this together with
the deeds (proof of ownership documents) through to
the buyer’s solicitors. When money has changed
hands, and on the assumption the seller has moved
out, the buyer will then be able to pick up the keys
and move into the property.
What is the Bank
Transfer fee?
When it is time to
complete the transaction, it is often necessary to
arrange for funds to be telegraphically transferred
from the mortgage lender to our account. The
mortgage lender may charge for this. The charge will
usually be deducted from the amount of the loan. We
would then need to telegraphically transfer the
completion monies to the seller's solicitors and our
bank will charge a fee for effecting this transfer.
Where do I
collect the keys from?
Generally the
estate agents where you saw the property will be
holding the keys. If there is no estate agent
involved it would be best to contact the seller
directly and make plans to collect the keys on the
day of completion.
On my Sale, when
will I receive the sale money?
This will be sent
to you on the day of completion. If you are
purchasing as well then the sale proceeds are used
towards the purchase price of your new property and
any residue will be sent 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.
How early on
completion day can I get the keys?
On completion day
the purchase monies are sent (from the buyers
solicitors to the sellers solicitors) through the
Bank's telegraphic system. This is network of
computers dealing with thousands of transactions
every day. On some days the money can take as little
as half an hour to come through, on other days it
can take between 4 to 6 hours. The Sellers
Solicitors cannot release the keys until they have
received the money. This is the reason that some
people complete mid-morning and others by
mid-afternoon
What time will I
get the keys on the day of completion?
The contract
normally specifies that completion shall take place
by say 1.00 or 2.00p.m.
Do I have to notify the Gas and Electricity
Authorities of the date that I am moving?
Yes. You should notify those authorities and the
local council for Council Tax purposes yourself.
When should I
arrange Building 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.
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Stamp Duty
What is Stamp
Duty Land Tax?
Stamp Duty Land Tax
replaced the ‘old’ stamp duty on purchases of
houses, flats and other UK land and buildings and
certain leases as from 1 December 2003. In many
ways, it is similar to stamp duty but there are some
differences.
Under Stamp Duty
Land Tax, it is no longer necessary to send
documents in for stamping - instead, your solicitor
or licensed conveyancer will ask you to sign a new
return. This new return is called "the land
transaction return" - SDLT1.
The completed
return will contain all the information required by
HM Revenue & Customs regarding the purchase.
As the buyer or
tenant you are responsible for the return and
payment of the Stamp Duty Land Tax. Normally the
completion of the form and its submission will be
handled by the solicitor or licensed conveyancer
acting for you in the purchase. Upon receipt of a
completed return and payment of Stamp Duty Land Tax,
HM Revenue & Customs will issue a certificate. This
certificate must be sent to the appropriate land
registry - previously the "stamped" documents had to
be submitted.
Stamp Duty Land Tax
transactions fall broadly into two categories -
buying land or premises and lease of land or
premises.
How can I save
paying stamp duty?
If the purchase
price is just above the stamp duty limits
(£120,000.00, £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 £252,000.00 and there are
no fixtures the stamp duty payable will be £7560 but
if there are fixtures worth £3,000.00 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%. That is a saving of £5070.
If you want to
"split" the price in this way you must remember to
tell your solicitor before exchange of contracts.
What is
Disadvantaged Areas Relief?
Disadvantaged Areas
Relief was introduced on 30 November 2001. It is a
relief from Stamp Duty Land Tax (SDLT) provided on
some residential, and all commercial, property and
land transactions situated in Enterprise Areas
within the UK.
Anyone
buying a freehold residential property, costing
£150,000 or less, in a qualifying area, can claim
Disadvantaged Areas Relief, resulting in a
saving of up to £1500.
How do I claim
Disadvantaged Areas Relief?
It is easy to claim
the relief and, in most cases, your solicitor or
conveyancer will handle this for you. There is no
need to pay SDLT and claim it back – if the property
you are buying qualifies for relief, your solicitor
or conveyancer will simply need to complete the
relevant section of the Land Transaction Return
(SDLT1).
An SDLT1 needs to
be completed for any transfer of a freehold or
assignment of a lease whether or not SDLT is
payable. The only exceptions are the exempt
transactions listed on the SDLT 60
(Self-Certificate). Please note that there are some
new exemptions to be added to the SDLT 60.
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Buying
Property in Joint Names
What do we need
to know if we are buying in joint names?
When any property
is owned by more than one person, they can own it
either as “joint tenants” or as “tenants in common”.
Joint Tenants
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This is the
method of ownership commonly used by married
couples who do not wish to distinguish what each
of them owns or to demarcate their shares in the
property.
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When one of two
joint owners dies, the whole property
automatically passes to the surviving joint owner
by operation of property law. Neither of the two
joint owners has an interest in the property that
is capable of passing under their Will. In the
case of a married couple who want everything to go
to the survivor on the first death, this is
perfectly in order. However, if they want to
provide for any other arrangement in their Wills,
a joint tenancy may be inappropriate.
Tenants in Common
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Where co-owners
hold property as tenants in common they own the
property in specified shares so this method of
ownership is appropriate where the co-owners wish
to define their shares whether those shares are
equal or unequal.
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Owning in
specified shares is also important if the owners
do not wish to leave their respective shares in
the property to the other absolutely. For example,
they may want to leave their share on trust for
the other or they may want to leave it to somebody
completely different.
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If you wish to
own a property as tenants in common, we can
prepare a separate Deed setting out those shares.
If you wish, the Deed can also set out obligations
to contribute towards outgoings and what is to
happen if one of you wishes to leave the property.
This type of Deed is called a Declaration of Trust
and the charge will be £99.00 if it is done at the
time of buying.
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You should bear
in mind that although a Declaration of Trust is
normally binding on the parties entering into it,
there are occasions when the courts have power to
disregard such documents and to order that
property should be divided in a different way. In
particular, in making financial orders upon break
down of marriage the courts have a wide discretion
to re-distribute assets between two spouses.
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Money
Laundering
Why do you carry
out Identification Checks?
To satisfy the
Money Laundering Regulations we will require
evidence of your identity in all cases. This is
normally satisfied by provision of a passport and an
original bank statement or utility account showing
your correct address.
Under recent Money Laundering Regulations, we are
required by law to ascertain not only
the identity of our clients
but also the source of the money that we
receive in respect of any matter. We reserve the
right to request the source of any sum greater than
£500. Refusal to disclose this may lead to us
cancelling our retainer with the client, as clearly
this will cause a conflict between the set
Regulations and a refusal to disclose.
We have an obligation to notify the appropriate
authorities should we believe that any monies
received by us may contravene the Money Laundering
Regulations.
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Home
Information Packs (HIPs)
What are they?
Under new
Government legislation from 2007 no house can be
sold unless the seller has available to a buyer a
Home Information Pack (a HIP). Until then the use of
HIPs will be voluntary. The pack will need to
include details about the property, searches, copies
of all matters affecting the legal title, and a type
of survey called a Home Condition Report. It is
designed to help the buyer make an informed decision
whether to buy the property or not.
What are they likely to include?
It is likely that a HIP will
include the following:
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Terms of sale
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Official copy of
the Land Registry title
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Filed plan
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Official copy of
any documents referred to in the title
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Full copy of the
title if it is unregistered
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Local search
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Sellers property
information form
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Fixtures and
fittings list
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Drainage search
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A home condition
report
For a leasehold property it
will also need to contain the following:
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Copy lease, any
sub leases or licences
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Copy of any
landlords regulations to do with the property
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Copy up to date
insurance schedule
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Copy last 3 years
management accounts
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Details of any
future capital expenditure
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Company search
against the managing company
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Copy memorandum
and articles of association
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Copy share
certificate of management company
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