Your first steps toward buying a house
If you’re considering buying a house, there’s much to think about. Aside from personal considerations, such as what type of property you’d like to purchase and in which location, it’s a good idea to select your solicitor and arrange your mortgage (should you require one) early on.
Acting in a timely manner is likely to save you a great deal of energy and put you in a stronger position later on, ensuring your transaction goes as smoothly and efficiently as possible.
Choosing a solicitor
It’s important to take time and care when choosing a solicitor.
During the course of your transaction, you’ll be liaising with your conveyancing solicitor frequently, so it’s crucial you feel looked after and listened to.
At Anthony Stockton Solicitors, we understand the importance of communication. We’re well aware that mysterious hold-ups can cause a great deal of anxiety. Not only do our staff strive to keep you informed at all times, we’ve installed the latest technology, so you can monitor the process of your transaction online.
When should I apply for a mortgage?
As you’re no doubt aware, a mortgage is simply a loan secured against the value of a property. There are many different types of mortgage available in the England and Wales; the right mortgage for you will depend upon your financial circumstances.
Securing a mortgage can feel a little chicken and egg at times: you can’t buy a house without getting a mortgage yet you can’t get a mortgage without buying a house!
In fact, the sooner you arrange your mortgage the better. The secret to stress-free house buying is forward planning. Unfortunately, people can lose out on the property of their dreams because they put off making mortgage arrangements.
Beginning your application for a mortgage well before you have found the property you would like to buy is a good way of shielding yourself against potential disappointments. Not only will you have a clear budget in mind, you’ll also possess a major advantage over any rival buyers who have not put mortgage plans in place.
If you are unsure about the type of mortgage you require you should seek the advice of a professional financial advisor who should be able to provide you with the options available, to enable you to choose the right mortgage for you.
What is a conflict of interest?
Once you have found the property you would like to purchase, and your offer has been accepted, you’ll be required to complete your full mortgage application.
It’s important to acknowledge that your solicitor can represent both you and your mortgage lender at this stage, and it is therefore your solicitor’s responsibility to act in both of your best interests.
Although problems seldom arise from this arrangement, on occasion, what’s known as a “conflict of interest” does occur.
Perhaps the most common example of a conflict of interest we come across is when a client divulges information unknown to the lender, which it is in the lender’s best interest to know about.
For instance, perhaps the client intends to let a property following completion but the lender has not been informed. Although it’s in the client’s best interest that the lender remains ignorant of the buyer’s intentions, it’s clearly in the lender’s best interest to be told.
Since solicitors are duty-bound to act in both parties best interests, in a situation such as this, most solicitors will simply stop acting for both parties. Although a solicitor will not be able to tell the lender why he or she has stopped acting for you, it’s common for lenders to respond to problems such as these by withdrawing mortgage offers altogether.
What is a valuation?
Once your offer has been formally accepted, your mortgage lender will undertake a valuation, which you will generally be expected to pay for. The aim of a valuation is to determine whether your property is worth the amount that you have agreed to pay for it. The purpose of a valuation is to protect your lender’s investment.
Many valuers won’t actually enter a property, and even when they do, their inspections are likely to be superficial.
Since the Valuer is not obliged to reveal any structural issues to you, do not assume a valuation will suffice – it’s always wise to commission an independent structural survey.
What is the difference between a full building survey and a HomeBuyer report?
Never underestimate the importance of an independent survey. The professional findings of a Chartered Surveyor could save you a great deal of time and money in the long term.
A full building survey, which was formerly known as a structural survey, provides an in-depth report that details a property’s construction and condition.
Since there is no standard format (each surveyor has his or her own way of presenting findings), full building surveys can be adapted to your requirements. Full building surveys, which can include advice about future maintenance, are particularly useful if you seek to renovate, extend or convert a property, or if a property happens to be old or has already undergone substantial renovations.
By contrast, a HomeBuyers Report conforms to a standard format and will merely highlight major problems. Although a HomeBuyers Report is less costly, if you are looking to buy an historic property, or a property that has undergone extensive renovation, a HomeBuyer’s Report might not give you the peace of mind that a full building survey will.
Stages in a conveyancing transaction
First things first, what is conveyancing?
Simply put, “conveyancing is the branch of law concerned with the preparation of documents for the transfer of property”. Whenever a property is sold, legal and administrative work must be completed in order to ensure that the person who has bought the property owns it legally.
Before a conveyancing transaction begins, it’s important to bear in mind that neither buyer nor seller has entered into any contract and can therefore walk away from the deal at any time.
Once you have chosen the solicitor you would like to represent you, there are a number of things you’ll be required to do before you’re able to exchange contracts:
- Provide ID
- Pay for any disbursements required upfront
- Complete any additional paperwork
Since your Solicitor acts on your behalf, she or he will require your instructions in writing. It’s a good idea to instruct your solicitor as swiftly as possible.
You will also be expected to produce ID, generally in the form of a passport or driving licence, utility bill and birth certificate, and pay for any disbursements which are required upfront. The sooner the identity documents are provide the sooner correct legal papers can be drafted.
Delays in providing the identity documents can mean documents have to be redone with the correct names at a later stage, causing a delay at a crucial stage.
The pre-contract phase
You are advised to scrutinise the property you intend to purchase closely during the pre-contract phase. If you have not done so already, you are advised to commission a thorough survey in order to identify potential problems.
During the pre-contract phase, your solicitor will gather information regarding:
- The land that is to be sold and the terms of sale
- Whether the seller owns the legal title to the property
- Any other information pertinent to the sale of the property, such as permissions obtained by the local planning authority
- Your financial standing
The draft contract phase
During the draft contact phase, your Solicitor and your Seller’s Solicitor are likely to be in frequent contact sorting out any queries. Initially, your Solicitor will write to the Seller’s Solicitor in order to inform them that they are working on your behalf, and to request a draft contract and any other paperwork.
Your Solicitor will examine the draft contract and raise any enquiries you might have with the seller.
Your Solicitor will also undertake the necessary legal searches at this stage. Naturally, different types of searches are designed to highlight different issues. Local authority searches, for example, will help you ascertain whether a new roadway, building development or demolition is planned in the area and whether there are breaches of planning permissions or building regulations.
Some searches are location specific. In Somerset, Radon searches are common, while in Cornwall, tin mine searches are carries out frequently. Your solicitor will be able to advise you whether a specific search is necessary.
At this stage, it’s also in your interest to organise buildings insurance – normally, as soon as contracts have been exchanged, the property becomes your responsibility.
Before you sign the contract, your solicitor will make sure:
- All of your enquires have been answered satisfactorily
- Any fixtures and fittings you think are included in the sale price are included
Once everything is in place and you’re happy with it, your solicitor will invite you to read and sign the contract. And then request you to suggest a completion date which your Solicitor can put to the Sellers Solicitors for agreement.
Your Solicitor will also request you to make arrangements to transfer the deposit into your Solicitors client account so that it is cleared in time for exchange.
You’re nearly there – congratulations!
Your solicitor and the seller’s solicitor will agree upon a date and time to exchange contracts.
Solicitors actually exchange contracts on their clients’ behalf. The solicitors involved in the transaction read selected parts of the two contracts aloud over the telephone, to ensure they are identical, and then send the contracts to one another in the post.
Once you have exchanged contracts, you are in a legally binding agreement – if you pull out at this stage, you are likely to incur financial penalties, additional costs and possible legal action.
Between exchange and completion
Between exchange and completion, your solicitor will submit to the Land Registry an Official Search, this will confirm that you will have an interest in the property. This will result in the deeds to the property being frozen for 30 working days.
During this time an application to the Land Registry will be made to transfer the deeds of the property into your name.
At this point, the Seller is likely to be making arrangements to move out of the property and you can begin to organise your own move.
At this stage, your solicitor will send you a statement detailing the final figure you will have to pay. The sum will need to be cleared and present in your solicitor’s account at least one day before completion.
On completion day, the Seller’s Solicitors will confirm that they have received your payment to both your Solictors and the Estate Agents and you will then be able to collect the keys to your new property.
After completion day
Fear not, you’re close to the finish line – there are just a few loose ends to tie up.
Your solicitor will:
- Pay Stamp Duty Land Tax if appropriate
- Register the change of ownership with the Land Registry
- Send a copy of the Title Deeds to you. (Title Deeds are now held electronically by the Land Registry)
- Send a copy of the title deeds to your lender (If required by them)
- Notify the freeholder of a change of ownership if your property happens to be leasehold
The Finish Line
Many congratulations. You've crossed the finishing line! You legally own the property you set your heart on. We couldn’t be happier for you.