STEP BY STEP CONVEYANCING GUIDE
ON THE PURCHASE OF A PROPERTY
1. Buyers Solicitors receive from Sellers Solicitors:-
(i) Contract
(ii) Copies of the Registered Title document in respect of the property giving details of the name of the proprietor and any lender who has a registered Charge and for instance restrictions to which the property or its use is subject
(iii) If a Leasehold property - a copy of the Lease
(iv) In many cases completed Property Information forms in respect of the property covering such matters as
(a) responsibility for maintaining boundaries
(b) the existence of any damp-proof of timber Guarantees
(c) whether any building works/alterations have been carried out which would require Planning Consent.
(d) if the property is a Leasehold one then details of service charges, building insurance cover and the identity of any managing agents/landlords should be disclosed.
(v) A Fixtures Fittings and Contents form also usually provided by the Sellers Solicitors showing whether items such as carpeting, curtains, ovens, telephones and other such fittings and similar items are included in or excluded from the purchase.
2. The Buyers Solicitors submit a Local Authority Search to the relevant Authority. The results of this Search will show if there are any road/rail proposals which would affect the property or if there have been any Planning/Building Control irregularities. The Buyers Solicitors will take up with the Sellers Solicitors any matters which require further clarification or information.
3. In the case of a Leasehold property, it sometimes happens that some provision or provisions in the relevant Lease may be regarded as somewhat onerous or likely to give rise to difficulties. The Buyers Solicitors then suggest that the Sellers Solicitors should approach the Landlord to agree to appropriate changes being made to the Lease
4. Whilst these procedures are in progress the Buyers will usually have applied for a Mortgage to a Bank or Building Society. A Surveyor will then be appointed by the Bank or Building Society to provide a Valuation of the property. It is usually a cost saving exercise if the Buyers also instruct that Surveyor to carry out simultaneously either a Structural Survey or House Buyers Survey if a less searching Survey is sufficient.
In the main a Valuation Survey may not be adequate. If there is to be no Mortgage, again the Buyer should obtain at least a House Buyer's Survey. A Surveyor can be recommended if required.
5. When the Mortgage Offer is made, the Buyers Solicitor will usually be asked to act additionally for the Bank or Building Society concerned in relation to the completion of the Mortgage formalities. A copy of the Mortgage Offer together with the Mortgage Deed and other standard documentation will be sent by the Bank/Building Society to the Buyers Solicitors either at the same time or shortly after such an offer is sent out to the Buyer
6. It may be that as a result of defects in the property highlighted in the Survey Report, a re-negotiation of the purchase price may be justifiable. Once the price is finally settled and the Buyers Solicitor is satisfied that the provisions in the Contract are otherwise acceptable then the Buyers Solicitor will return one part of the Contract to the Sellers Solicitor for this to be signed by the Seller.
7. The Buyers Solicitor will then either at a personal meeting or by letter report to the Buyers on the various aspects of the transaction. If all is satisfactory then the Buyers Solicitor will recommend that the Buyers sign the Contract and proceed to an exchange of Contracts.
The Buyer will at this stage have to provide a deposit (usually 5%or 10% of the purchase price). If the Buyer is also selling a property simultaneously, then it will often be possible for the Buyer to utilise the deposit which he or she receives from his or her Buyer as a deposit in relation to his or her own purchase.
Similarly the Seller will be able to use that deposit in regard to his or her related purchase. However the deposit must ultimately be held and retained as stakeholders by a firm of Solicitors acting for a client “further up” the linked chain of transactions.
8. Exchange of Contracts is now invariably achieved by the Buyers and Sellers Solicitors verbally over the telephone. The two Solicitors agree a completion date, confirm that they are holding respective signed Contracts, and in the case of the Buyers Solicitor a deposit, which they undertake to forward immediately to each other.
The respective Solicitors then confirm that Contracts are to be regarded as exchanged. It is only at that stage that the transaction becomes binding and neither party can withdraw
9. Following exchange of Contracts the Buyers Solicitor completes the investigation of the Sellers title and sends a Deed of Transfer to the Sellers Solicitor for the Seller to sign
10. The Buyers Solicitor will send to the Buyers a Mortgage Deed for signature together with a Completion Statement showing the amount of the purchase monies required to be paid before completion.
11. Final Searches are now carried out by the Buyers Solicitor at the Land Registry to ascertain that no additional mortgages have been registered against the title other than those disclosed when the copies of the title documentation were initially produced.
For the benefit of the Bank/Building Society who are providing the mortgage advance, a Bankruptcy Search against the Buyer has to be carried out as a formality.
12. On the completion date, the purchase monies are usually transmitted by Bank Telegraphic Transfer to the Sellers Solicitors. On these monies being received, the keys which are often at this stage in the possession of the agents are released to the Buyer.
