Buying a Property – Some Frequently Asked Questions
Q. What does the solicitor do?
A. The solicitor’s role in the home buying process is to protect your interests and those of your lender. The aim is to ensure, so far as is possible, that from a legal point of view the property is free from any problems that will affect you in the future.
The solicitor will carry out a number of checks and investigations on your behalf and report to you about them. When you are happy to proceed the solicitor will arrange to exchange contracts for you. After exchange of contracts the solicitor will make all the necessary arrangements for completion of the purchase and finalise the transaction for you.
Q. What are the checks and investigations that the solicitor will carry out for me?
A. A full check of the legal title to the property – This includes checking any documents in the title, and particularly if the property is leasehold, a careful check of the lease. The solicitor will report to you about these documents and how they may affect your future use of the property.
Searches – There are a range of searches that the solicitor will carry out depending on the location of the property and any particular requirements you may have. Typical searches are:
The local search – This is a search carried out in the records held by the local authority for the area. The search will reveal if the property is likely to be affected by local proposals such as road improvements. It will also check the current planning position. Please note however that the local search will not tell you if any neighbours have made planning applications.
Drainage search – This is a search carried out in the records held by the Drainage Authority for the area. It will include a plan which will show where the main drains are, but does not show connections between the property and those drains.
Environmental search – This search will give details of matters in the immediate vicinity of the property which may influence your decision to buy.
Planning search – Unlike the local search, this search will tell you what planning proposals there may be in the locality. This again may influence your decision to buy.
Other Searches – Should for example the property be in a mining area or former mining area a mining search will be needed. Depending on the locality of the property other specific searches may be appropriate.
The solicitor will check the result of these searches and bring important matters to your attention.
Enquiries – In addition to searches the solicitor will also check information provided by the seller’s solicitor and raise additional enquiries on appropriate matters including things that you may wish to raise.
Again the solicitor will check the information given and bring important matters to your attention.
Q. How long do these checks and investigations take?
A. This will depend on two factors. Firstly, how quickly the sellers solicitor provides the original package of documents, and secondly how quickly the local authority and other parties deal with the searches and enquiries. The time taken by local authorities varies from one to another. Some take as little as two or three days, whereas others can take several weeks. The solicitor will try and give you an indication on this. Typically you should expect this part of the process to take about four weeks.
Q. Do I need a survey?
A. The purchase of a property is probably the largest financial transaction of your life and it is important that proper professional advice is obtained from a surveyor regarding the condition of the property. A lot of people make two common mistakes regarding surveys. Firstly, if they do not need a mortgage they assume that a survey is not needed. Secondly, if a mortgage is needed they opt for the cheapest option, which is the basic valuation survey. The basic valuation survey is purely for the lender’s needs and does not normally contain any details whatsoever about the condition of the property. Therefore, it is important that you at least have the Homebuyers Report. This is a survey commissioned directly by you with the surveyor which means there is a contractual relationship and the surveyor is under an obligation to provide advice regarding the condition of the property. The advice given is backed by professional indemnity insurance which means that you are covered in case any problems are overlooked.
Q. Is there anything the solicitor will not check?
A. We will not unless specifically requested by you visit the property. We will not raise enquiries concerning the state or condition of the property or anything that could be ascertained by inspection. If therefore there are any specific enquiries you wish to raise please let us know.
Q. What happens after the investigations have been completed?
A. Assuming that you have received a satisfactory mortgage offer by this stage, your solicitor will then report to you and send you the contract and other documents to sign. At this stage the solicitor will also ask you to pay a deposit.
Q. Why do I need to pay a deposit and how much has to be paid?
A. The deposit will provide security to the seller for the performance of the contract. If the buyer decides not to go ahead after exchange of contracts then the seller would be entitled to keep the deposit. The payment of the deposit is therefore a strong incentive on the buyer to complete the purchase of the property, and means the seller can rely on the contract and if necessary commit to a related contract. As to how much has to be paid, this is often a matter for negotiation between the seller and buyer. Traditionally sellers have been able to ask for a payment of 10% of the purchase price, but with the rise in property prices it is now possible to agree a lower figure. Your solicitor will advise you about this at the time.
Q. What is the completion date and how is this decided upon?
A. The completion date is the date when the final purchase monies are paid over to the seller through their solicitor and ownership of the property passes to the buyer. More importantly it is the day when you the buyer can move in to your new home. The date is decided by agreement between the seller and the buyer. However your solicitor will usually advise you that he/she will require at least ten working days between exchange of contracts and completion to carry out other work that needs to be done to prepare for completion. This will include getting the money from your lender. Many lenders require a period of up to ten working days to process the request for the release of the mortgage monies.
Q. What is exchange of contracts?
A. This is the point when a binding arrangement comes into force. Up to this point either the seller or the buyer can withdraw without any obligation or liability to the other party. The contract sets out amongst other things the agreed terms between the parties including a description of the property, the names of the sellers and the buyers and the price. There are two copies of the contract, one of which is signed by the sellers, the other by the buyer. When both buyer and seller are ready to proceed, the parties’ solicitors will arrange to “exchange contracts”. This is usually done on the telephone. When contracts are exchanged the agreed completion date is written in to both parts of the document.
Q. What happens on the completion date, and what time do we get the keys?
A. Your solicitor will arrange to send the balance of the purchase monies (i.e. the purchase price less the deposit paid on exchange of contracts) to the seller’s solicitor. The money is always sent through the bank telegraphic transfer system. Assuming that the monies are all to hand early in the day then your solicitor should be able to send them as soon as the system opens. This should mean that the money should be received by the seller’s solicitor by midday. Once the money has arrived the seller’s solicitors can then authorise the release of the keys. However things do not always go as smoothly as one would wish. There can be delays experienced by the late arrival of mortgage monies or delays in the bank system. These problems will often be outside the solicitor’s control, but he/she will endeavour to keep you informed and let you know when you can expect to get the keys to your new home.
Q. What happens after completion?
A. We will have a number of tasks to carry out after completion which will not affect you. We will submit your Stamp Duty Land Tax return and deal with the registration of the title at the Land Registry. The Land Registry’s records will be updated to show you as the new owners of the property and the interest of any new lender. There are no longer any paper ‘title deeds’ – registration of title is now entirely electronic, but there will be a copy of the register, known as a Title Information Document, for you to keep.
We hope you have found these questions and answers useful, but if you have any other questions please contact the person handling your case who will be pleased to help.