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 Completion
Date
This is the date that ownership of the
property passes from the seller to the buyer.
The seller and buyer should discuss dates between
themselves ad then notify their respective
solicitors who will try to fit in with the suggested
date. If there are unforeseen delays, e.g if the
buyer does not receive a search or mortgage offer in
time, or the ‘cash buyer’ turns out to have a
related sale, then the completion date may have to
be revised. For this reason you should not make any
firm commitments such as giving notice on a job,
arranging removals or making holiday bookings
without first contacting us so that we can advise
you of the situation.
Only when contracts are exchanged and a completion
date is fixed can you be virtually guaranteed that
the completion date will be met. It is not essential
for you to be present on the completion date but if
you are going to be away, then you should let us
know so that we can arrange for one of your
relatives (or ourselves) to act for you through a
Power of Attorney.
Contract
This is the agreement between the buyer and the
seller. It sets out the main terms of what has been
agreed such as the property, the price and the names
of the parties. It also deals with the process if
something goes wrong. Rather than making the buyer
and the seller meet to sign the same contract, the
seller's solicitor draws up two copies of the same
contract, and each party signs their own copy. When
both parties are ready to legally commit, the two
contracts are exchanged.
Deposit
This causes a lot of confusion. When most people
talk about the deposit they mean the part of the
purchase price that the buyer is putting down
him/herself (i.e. usually the difference between the
amount of the mortgage and the purchase price). When
solicitors talk about the deposit they are talking
about the money that is handed over to the seller's
solicitors upon exchange of contracts. This may or
may not be the same amount.
On exchange of contracts the seller can insist on
receiving from the buyer a 10% deposit of the
purchase price. However, as many people are not
contributing as much as 10% to the purchase, reduced
deposits are often agreed. You should be aware,
however, that if you are a buyer and you pay a
reduced deposit but then fail to complete the
purchase through no fault of the seller, you will,
under the terms of the contract, be required to make
the deposit up to the full 10%. You may also have to
pay compensation to the seller if the seller loses
out through your failure to complete.
Exchange Contracts
This is a very important moment. From the minute
contracts are exchanged, the matter becomes binding.
From that moment on, the seller must sell, the buyer
must buy; it must be done at the price stated in the
contract. Until contracts are exchanged NOTHING is
binding - either party can walk away from the
transaction with no penalty.
Fixtures, Fittings and
Contents Form
This is a list of the items at the property which
are either included or excluded from the agreed
price. This form is completed at an early stage by
the seller and sent to the buyer, so that both
parties understand what is included in the selling
price. If you are the seller, we will send you a
copy of the completed form you have submitted so
that you know what you have agreed to be included in
the price. If you are the buyer, we will send you a
copy of the form as soon as it is received by
ourselves from the seller’s solicitors so that any
difficulties can be resolved at an early stage.
Freehold
Ownership of both the property and the land it
stands on.
Indemnity Contribution
Indemnity insurance is taken out by all solicitors
to cover losses to clients arising from errors or
fraud in dealing with their matters.
The supervising solicitor is required by the Law
Society to pay for this insurance in respect of
every transaction. Some solicitors recover the
premium from their clients.
If you use easylawyers,
you do not have to pay an additional amount in
respect of solicitors’ indemnity insurance.
Land Registry
A central body that retains records of who owns
the land and under what conditions.
This was set up in 1925, to simplify the
conveyancing process. Not all land in England and
Wales is registered today. This is partly due to the
fact that land can only be registered following
certain ‘triggering events’. The Land Registry has
its own website which provides useful information.
Leasehold
Temporary ownership of the property but not the land
on which it stands. When the lease expires ownership
of the property reverts back to the freeholder.
Legal Fee
This is a fixed cost that covers the cost of the
time our property lawyers spend on your conveyancing.
Local Authority Search
This is a list of questions about the property,
which is sent to the local authority. It covers such
items as whether the road serving the property
should be maintained by the council, whether there
have been any planning applications on the property,
and a number of other things.
The search is against the property only and does not
cover the surrounding area. A word of warning - the
search will not show any planning permissions or
matters affecting land or buildings outside the
boundaries of the property. It is important that you
let us know at the start of the transaction if you
require information on any particular point or if
you wish us to ask any particular questions of the
local authority. We would not normally advise a
buyer to exchange contracts without a satisfactory
local authority search.
Mortgage
This is a loan to help you buy the house. The
mortgage is 'attached' to your title deeds, and
means that you cannot sell the property without
paying it off at the same time.
Contracts should not be exchanged until an
acceptable written mortgage offer has been received.
Verbal confirmation from you bank or building
society that they will grant you a mortgage is not
enough.
In many cases a mortgage may be supported by an
endowment, pension or mortgage protection policy and
in these circumstances we must confirm to the
lender, before exchange of contracts, that there are
existing policies or that arrangements have been
made for new policies to be brought into effect
immediately contracts are exchanged.
If you are selling, we will contact your mortgage
lender at an early stage to ask how much it will
cost to pay off the mortgage - we will send you a
copy of this figure. You may find that you will be
charged a financial penalty if you pay off the
mortgage early. This is a consideration to be taken
into account when agreeing a completion date, and
often applies when your existing mortgage was set up
at a fixed rate, or you obtained a 'cashback'
figure.
Mortgage Deed
The legal charge of the property to the mortgage
lender until such time as the loan is repaid.
Mortgage Fees
These fees are normally charged for acting on behalf
of your bank or building society.
We do not charge an additional fee for acting on
behalf of your bank or building society.
Property Information Form
This is a questionnaire about the property completed
by the sellers. It covers such items as guarantees,
neighbour disputes and boundaries.
If you are buying, then time can be saved by your
informing us as soon as possible about any
particular points about the property that concern
you. We can then ask the seller's solicitors the
relevant questions.
If you are selling and the buyer's solicitor asks a
question to which you do not wish, for whatever
reason, to give an answer, it is essential that you
discuss it with us. Failure to disclose information
could give the buyer grounds for taking action
against you.
Redemption
The final payment of a mortgage loan.
Redemption Fee
Penalty sometimes incurred if paying off a mortgage
early.
We do not charge an additional fee to redeem (pay
off) your existing mortgage.
Stamp Duty
This is simply a tax charged by the government, and
only affects you if you buy property for more than
£120,000. It is paid by the buyer.
If you buy for exactly £120,000 you pay nothing in
stamp duty; if you pay from £120,001 to £250,000
stamp duty is charged at 1% on the whole of the
purchase price. From £250,001 to £500,000 it is
charged at 3%, and above £500,000 it is charged at
4%.
Survey
This is a report carried out by a surveyor on the
physical state of the property you are buying.
If you are buying a property you should be aware
that the property is ‘sold as seen’. It is for you,
as the buyer, to discover any physical defects by
means of inspections and surveys.
Most houses are bought with the assistance of a
mortgage and the bank or building society will
require a mortgage valuation. However, this is not a
survey - it merely ensures that the property is of
sufficient value to protect the lender's interest.
Our advice is that you should have at least an RICS
Homebuyer's Report prepared by a qualified surveyor.
This will cost more than a mortgage valuation but it
is advisable. It is possible to go one step further
and have a full structural survey (initially you
should not choose this option unless the surveyor
who carries out the Homebuyer's Report thinks any
matter should be investigated further).
Title Deeds
These documents firstly act as evidence that the
person selling the property actually owns it, and
secondly set out any rights or obligations that
affect the property.
If you are selling, then valuable time can be saved
by your title deeds being obtained by us at an early
stage. If you have a mortgage then your bank or
building society will be holding your title deeds.
We will need to know your mortgage account number
and the name and address of the lender. Some lenders
charge a fee to send out your deeds but this will
normally be added to your mortgage account.
Transfer Deed
This is the document that passes the ownership of
the property from the seller to the buyer.
It is dated with the completion date and will be
sent to the Land Registry after completion. The Land
Registry needs this deed to change its records and
show the buyer as the new owner of the property. |
