Purchasing a property, as we appreciate, can be both confusing and stressful, we have therefore devised this detailed step-by-step guide to explain the transaction in simple terms.
The offer
1. Having decided that you wish to buy a property for a certain price you communicate this price to the sellers agents - " the offer".
2. The estate agent will negotiate with the seller.
3. When your offer is accepted, your purchase will be "Subject to contract". This means that neither you nor the seller, are legally committed and both parties can change their minds at any time.
Sale Agreed
1. Having had your offer accepted by the seller via the estate agent, you instruct a solicitor.
2. The seller and the buyer, through the estate agents, exchange solicitors’ details.
3. You instruct your solicitors to investigate the legal title of the property (the conveyancing).
Survey
1. On acceptance of the offer you may now need to obtain finance (a mortgage) and arrange a survey of the property to check that it is structurally sound and worth what you are willing to pay.
2. You will need to find a mortgage that suits your needs and the lender will have their own valuer to establish to property’s value.
3. You may wish to instruct a surveyor to prepare a survey for you. The surveyor will advise: - If the price you agreed with the seller is a fair price.
- Of any adverse structural problems.
- Whether you need to carry out further checks e.g. for damp, timber infestation etc.
4. If the survey suggests further checks need to be made or raises the issue of price i.e. it is too high or that the property needs unforseen work carrying out, you may wish to go back to the seller’s agents to re-negotiate the price. The surveyor’s findings can affect the finance.
Finance
The lender will check.
- Your income and credit history.
- The value of the property i.e. through the surveyor.
If there are no issues raised and the lender is happy with the checks it will issue a mortgage offer, this will show you how much and the terms on which they will lend you the money to buy the property.
Conveyancing
1. Conveyancing solicitors will request a draft contract from the seller’s solicitors which will contain:
- The agreed terms for the sale of the property.
- A list of the fixtures fittings and contents to be included in the sale.
- A general questionnaire form completed by the seller.
- A copy of the legal title.
- Copies of any necessary guarantees.
- Copies of any planning documents.
2. Your solicitor will lodge a local authority search which will show the planning history of the property and whether there are any proposals and schemes that may affect the property. Search results normally take between 5 to 20 days depending how quickly the local authority works.
3. There may be other searches which will be necessary depending on the type and location of the property. Your solicitor will also check the draft contract to make sure there are no legal problems revealed, and will advise you of any legal restriction or rights or easements that affect the property.
4. Your solicitor will ask the seller to answer any queries they may have with regard to the above.
5. Once your solicitor is satisfied with the results of the searches and replies to enquiries and (if you are borrowing money) a written mortgage offer has been issued by your lender, then you will be asked to sign the final contract document in readiness for exchange of contracts, and provide the required deposit monies (usually 10% of the purchase price).
If you are also selling, the deposit received on your sale will usually suffice for the deposit on your purchase and you will not generally be asked to provide extra deposit money.
6. Even signing the contract does not commit you to the purchase. It is only once contracts are exchanged that both parties are legally bound to each other.
7. Exchange of contracts takes place between the solicitors and the deposit is paid over to the seller’s solicitors.
8. The purchase is now legally binding and if you withdraw you lose your deposit and may possibly be sued for other losses under the contract.
9. Your solicitor will prepare a transfer deed and you will be asked to sign this and the mortgage deed. You will be asked to provide some evidence of your identity to satisfy your lender.
10. Your solicitor will obtain the mortgage monies from the lender and any balance required from you.
Completion
1. On the day of completion, your solicitor will pay over the balance of the purchase price and in return will obtain the title deeds to the property and you will receive the keys usually via the estate agent.
2. Your solicitor will deal with the formalities of paying stamp duty Land Tax and registering your ownership at Land Registry so that the deeds of your new property are properly amended into your name.
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