The purchase of a new home or buy-to-let property, whether you are a first-time buyer or a seasoned investor, is an exciting time for many people. Nevertheless, the intricacies of the conveyancing process in England and Wales, with its roots dating back hundreds of years, can often make the process daunting. For that reason, having an understanding of what’s involved, and why, can prove the difference between you encountering either a frustrating or a stress-free transaction.
Mortgages and Financing
When considering whether to proceed with a purchase, it is first important to ensure that the property will be affordable. A prospective buyer would be well advised to ensure that any third-party financing arrangements are in place so far as possible, such as obtaining an Agreement in Principle from a mortgage lender, before making an offer, as this will help to avoid disappointment later on.
When performing your affordability calculations, it is crucial to ensure that all potential costs are included, such as Stamp Duty, removal fees, search fees and Land Registry fees.
Offer Accepted and Instructing a Lawyer
Once you have calculated how much you want to pay for your new property, and an offer has been accepted by a seller, you will need to instruct a Residential Property Solicitor to proceed with the conveyancing process, which is described in more detail below.
At this stage, the Estate Agent will circulate a Memorandum of Sale to all parties involved (including the buyer and seller, and their chosen legal representatives). For that reason, it is often useful to have a Solicitor in mind before your offer is accepted, so that you can proceed with instructing them quickly once the deal is agreed.
When choosing the Solicitor that you wish to represent you in the transaction, it is important to be reassured that they will provide the level of service and client care that you expect to receive (such as being provided with direct contact details for the lawyer who is responsible for your transaction). You should also ensure that they have an understanding of, and experience in dealing with properties located in, the area in which the property is situated.
Conveyancing – The Purchase Process
Upon instructing your preferred Solicitor, they will proceed with the conveyancing process. ‘Conveyancing’ is the process of transferring the legal ownership of a property from one party to another. The key steps involved with the conveyancing process for your purchase, which will be handled by your solicitor, are as follows:
- On-Boarding – Completing the on-boarding procedures of the law firm you have instructed, including verifying your ID documents to comply with Anti-Money Laundering Regulations, and obtaining evidence of your Source of Funds;
- Confirming Instructions – Providing the Estate Agent and Seller’s Solicitor with confirmation that they have been instructed, and sending you a formal Engagement Letter setting out the terms of their appointment;
- Reviewing Documents – Once the seller’s Solicitor has provided draft Contract paperwork, your Solicitor will review the documents in detail. Those documents will include the draft Sale Contract, all relevant title documents and deeds relating to the property, the seller’s completed Law Society Forms and, if the property is leasehold, the Landlord’s ‘management pack’ providing details of how the building is managed;
- Raising Enquiries – Once your Solicitor has completed their review of the draft Contract paperwork, they will raise any necessary additional enquiries for the seller’s responses, and return the draft Sale Contract to the seller’s Solicitor with any required amendments;
- Ordering Searches – At this stage, your Solicitor will also obtain searches against the property from third-party providers. Those searches will include, as a minimum, a Local Authority Search, a Drainage and Water Search, and an Environmental Search. Other searches, such as a Chancel Repair Liability Search, may also be required;
- Reporting – Upon receipt of the required search results, together with satisfactory replies to their enquiries, your Solicitor will report to you on the purchase. This will include an overview of the search results, a summary of the title documents and deeds, advice on the key terms of the Sale Contract, and any other important matters that you need to be aware of;
- Mortgages and Financing – Assuming that your mortgage application has now been finalised and approved, and the Bank has formally submitted their mortgage offer, your Solicitor will also report to you on the key terms of the mortgage;
- Exchange of Contracts – Once you have reviewed your Solicitor’s report, and you are happy to proceed with the purchase, you will need to sign the Sale Contract and arrange to pay deposit funds (usually 10% of the purchase price) to your Solicitor. The parties can then agree the completion date and proceed with exchanging Contracts on that basis. Exchange makes the Contract legally binding on the parties, who may face contractual penalties (such as forfeiting the deposit) if they fail to complete;
- Completion – In readiness for the completion date, your Solicitor will confirm the balance that is required from you, and they will request any funds required from your mortgage lender. On the day of completion, they will arrange to pay the purchase monies to your Seller’s Solicitor, who will arrange for the Estate Agent to release the keys to you. The property is now yours!
At Boyletts Law, we understand that your decision to buy or sell your home, or an investment property, can be an overwhelming and stressful experience. Our aim is to ensure that the process remains as exciting and stress-free as possible, from start to finish. If you are looking for a conveyancing solicitor, please give us a call on 01279 295047 or complete our enquiry form and we will be in touch.