Keystone IMC Mortgage Section The legal process
The legal process of buying a property
How long will it take?
Most conveyancing transactions take 6 to 8 weeks from an offer being accepted on a property to completion and moving in. It will vary though depending on how many people are in the conveyancing chain and if there are delays in getting a mortgage offer or any outstanding information.
Instruct a solicitor/conveyancer
You may have just agreed a price with the vendor of the property you wish to purchase, you may have just agreed to sell your property to a buyer or you may have done both. Either way now is the time to instruct your solicitor. This basically involves telling your chosen conveyancer that you would like them to act for you and to start work. It is likely at this stage that your conveyancer will ask you to provide proof of identification (usually a valid passport or drivers licence) and proof of address (a utility bill dated within the last 3 months is usually OK). In addition they will probably also ask you for a cheque to cover the initial checks and local authority searches. Local authority searches vary in price in different areas. For example a local authority search in Ipswich may, and probably will be different to a search done in Woodbridge even though they are only 10 miles apart. The solicitor firm will at this point send out an instruction form for you to complete and return.
Title checks carried out
Your solicitor or Conveyancer will need to check the title to the property whether it is a property you are buying or re-mortgaging. They will need to see the title deeds which in many cases will be a copy of the Land Registry Title Information Documents which they can obtain direct from the Land Registry.
They will also need to check that the property complies with all planning and building regulation requirements and will need to see copies of the documents for any extension or building work.
Local authority searches
They will carry out a search with the Local Authority and will also carry out a drainage search, chancel repair search and environmental search.
Property information form
The Seller of the property will have filled in a Property Information Form which gives details about the property such as boundaries and any work done to the property and a Fixtures and Fittings Form which gives details of what items are included in the sale such as carpets, curtains, kitchen appliances, sheds etc
Mortgage offer received
Once your mortgage offer has been received and there is no outstanding information needed, you will be sent your contract to sign together with your mortgage deed. You will also need to complete a Stamp Duty Land Tax form.
Additional enquiries where applicable
Before you can exchange contracts all additional enquiries have to be answered and resolved. Additional enquiries are triggered from the property information form and the searches. It's impossible to list here what they are as they will be different for every purchase. For instance some building work may have been carried out on the property and there is no record of planning permission being granted.
Exchange of contracts
You will be asked to pay a deposit (usually 10% of the purchase price) unless you also have a sale in which case only the person at the very bottom of the chain has to provide a deposit. Once everyone in the conveyancing chain is ready, then contracts can be exchanged and a completion date agreed.
Completion
Your solicitor or Conveyancer will arrange for your mortgage lender to send them the mortgage advance on the completion date and will ask you for any balance including any Stamp Duty and Land Registry fees as well as the legal fees.
The money that is sent to your solicitor or conveyancer from the mortgage lender sometimes has the arrangement fee or transfer fee deducted so you will need to check this with your mortgage adviser when you work out how much money to borrow.
On Completion, your solicitor or conveyancer will transfer the purchase price to the Sellers solicitor or conveyancer and you can then collect your keys to the property.
Your solicitor or Conveyancer will then register your ownership of the property at the Land Registry and pay any stamp duty due. A copy of the Land Registry Title Information document will be sent to you and your mortgage lender. Any other documents such as planning consents or old "pre registration deeds" will be sent to you to keep safe as you will need these when you sell the property.
When should I start to book removals?
You should not book removals until contracts have been exchanged and a completion date fixed as although your solicitor or conveyancer will do their best to complete on the date you want, it is not always possible.
Why Kerseys?
This page was written with the help and guidance of expert property solicitors at Kerseys. Keystone independent mortgage consultants are very good at giving mortgage advice but we do not confess to be experts in the field of conveyancing. Kerseys are focused on educating their clients as we are and it is for this reason we are happy to work with them.
For mortgage advice we can charge a fee of typically £295 or we can receive commission from the lender
- Conveyancing
- The process of transferring legal ownership of property - from the seller to the buyer. (including the land, if a freehold property)
- Contract
- In the context of property purchase, the contract is the legally binding agreement between the buyer and the seller.
- Exchange (of contracts)
- By the time contracts are exchanged, the process of buying a house is almost complete. It is the transaction whereby signed contracts for both buying your new home and selling your old home are transferred between solicitors either physically or by telephone. The exchange of contracts is legally binding. After exchanging contracts, the buyer cannot pull out without incurring considerable expense. The seller can enforce the contract against the buyer, that is to say, compel the buyer to buy the property. However, this is rare. Normally, the buyer will be forced to pay all the seller's costs in reselling the property and will forfeit the full 10% deposit. This is the time for the buyer to insure both the house and his or her life.
- Completion
- The end of the process of buying a house. Completion occurs when money transfers from the buyer (via a lender in most cases) to the seller. It is usually followed immediately by the buyers moving into their new home.
- Stamp Duty
- This is the tax paid by the buyer of a property to the government, currently based on the following rates:
1% of the purchase price on any property bought for more than £125,000,
3% of the purchase price on any property bought for more than £250,000,
4% of the purchase price on any property bought for more than £500,000,
5% of the purchase price on any property bought between £1,000,000 & £2,000,000,
7% of the purchase price on any property bought for more than £2,000,000