What is the conveyancing process when buying a house?
Driving along any residential street, you’ll probably notice a handful of sold signs staked to the ground outside houses and, in smaller words below, ‘subject to contract’.
Therein lies the nub: houses are never sold until the deal is done which, in most cases, isn’t for a number of weeks – or even months – after the buyer’s offer has been accepted. Making an offer on a property simply kickstarts conveyancing, a complex, legal process that has the ability to speed the deal to a happy ending or turn it completely on its head.
What is conveyancing?
Conveyancing is a legal process usually completely by a solicitor (or a specialist conveyancer) that transfers ownership of a property from the seller (the vendor) to the buyer. If you’re not arranging a mortgage on a property you are purchasing, it is theoretically possible to complete the conveyancing yourself, but it’s not for the faint-hearted and can be a complex process.
Conveyancing begins when the vendor accepts an offer to purchase their property and ends with the release of the keys to the buyer.
At first, all is quiet
To start with, it may seem that nothing is happening as most of the initial legal work is completed without your involvement. The solicitor will confirm with the vendor’s solicitor that they are acting on your behalf and will receive the draft contract which outlines the vendor’s intention to sell their property to you. Your solicitor will also draw up a draft contract to confirm that you intend to purchase the property.
The solicitor will obtain some legal documents, such as the title deeds, from the Land Registry where property ownership is registered. Also, at some stage, the mortgage company will make a formal offer to lend money to you and will send the solicitor a copy of this document.
Once the solicitor is satisfied that all is in order and both parties have confirmed they wish to proceed with the sale at the agreed price, the searches will be applied for.
When you make an offer on a property, you do so armed with as much information about it as you can obtain from viewings, discussions with the vendor or estate agent, and neighbourhood research. However, there is some information that you simply cannot obtain so the solicitor will apply for searches on the property to check that there is nothing untoward that could cause you, or the mortgage lender, problems in the future.
Common searches include:
Local authority search
- Local authority search to check for major development in the area that could affect your standard of living or the value of the property, such as new roads or buildings.
Land Registry search
- Land Registry search to ensure that the property belongs to the vendor and they have the legal right to sell it to you.
- Environmental search to check for flood risk, contaminated land, former industrial use, natural gas hazards and other health-related dangers.
Water authority search
- Water authority search to ensure the property is supplied with water and has appropriate drainage.
Other searches may be necessary if the property is located in an area previously used for salt, coal or tin mining, or if the land it is built on was previously owned by the Church – or you could end up paying for the repair of your local place of worship!
Bear in mind that the cost of searches must be paid for by the buyer and may not be included in the solicitor’s standard fees.
Before you can sign the contract to confirm that you wish to purchase the property, the solicitor will need to be certain that:
- All enquiries about the property have been fully answered by the vendor’s solicitor. This could be something simple, such as the inclusion of fixtures or fittings, or more complex such as shared maintenance costs of driveways.
- The deposit for the purchase, typically 10% of the price, is available and ready to be transferred, and that there is a mortgage offer in place or cash funds to cover the remainder.
- Buildings insurance has been arranged (any problems that arise with the property after you have signed the contract are your liability).
- A date has been set for the sale to be completed.
You’ll probably be asked to attend your solicitor’s office in person to sign the contract.
The solicitors representing everyone in the chain will agree a time at which to exchange contracts. If the chain is long, with several properties being sold, all parties need to have signed their contracts and be prepared to exchange before this can take place. Also, a date for completing the sale will have been agreed so that everyone is able to move on the same day.
Where there are a number of properties in a chain, it is not uncommon for exchange of contracts to be delayed if there are outstanding enquiries or searches affecting other buyers. This can be extremely frustrating if you are ready to proceed; patience is essential!
Exchange of contracts is the most important point in the conveyancing process because, once this has taken place, you are legally obliged to complete the purchase of the property. However, the vendor is also unable to back out of the deal and cannot accept any other offers from buyers, so all parties are protected from this point on.
On the day of completion, the balance of the payment to purchase your new home will be sent to your solicitor by the mortgage company; if you are making a cash purchase, the solicitor will need cleared funds before this date.
The solicitor will arrange for the vendor to receive the money for the property and will pay all outstanding fees, such as to the estate agent, and taxes. He’ll also complete the legal paperwork so that Land Registry are informed that you are the new owner of the property and the title deeds for the house will be sent to the mortgage company.
The whole process can take as little as a few weeks, if there are no complications, the searches are returned promptly and the chain is short. In other cases, it may take a couple of months. But however long the conveyancing takes, you can be confident that your house purchase has been completed successfully and you can focus on enjoying your new home.
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