A Guide to Moving Home: How Conveyancing Really Works Part 2 - Purchase
1) Initial Instructions
When you first tell us that you want us to act for you, we must by law obtain satisfactory evidence of your identity and address. We will ask you to complete an identification form and will need to inspect original ID documentation and carry out an online identity check. Please assist by providing the documentation requested as quickly as possible.
When your offer has been accepted, and when you have told the estate agents that we are acting for you, the estate agents will send us the “memorandum of sale” setting out details of the seller, the seller’s solicitor, the price and any additional points agreed between you. They will also send you a copy of the document. Please check that it is accurate and let us know at once if there are any discrepancies.
We will write to all parties confirming that we are acting for you and we will press the seller’s solicitor to send us the preliminary documents as soon as possible.
We will ask you to let us have money to pay for any preliminary searches eg. a “Local Search”. This is a search through the Local Authority which we are required to make and deals with the matters such as planning permissions, tree preservation orders, the maintenance of roadways and sewers etc. Some Local Authorities take weeks to process the search and the purchase cannot go ahead without it, so we need to send out the search as soon as possible. We will also ask you for money to pay for a “Drainage Search” and an “Environmental Search” and for “Chancel Repair”.
If there is a Home Information Pack this usually includes a personal Local Authority Search. This is carried out at the Council by search agents not the Council themselves. The Council do not therefore guarantee the information and you would have no comeback against them if the information is incorrect. Also, the information available to search agents is limited. We will therefore carry out a full written search with the Council unless we have agreed otherwise.
2) The Contract and Supporting Documents
We can do nothing at all at this end until the sellers’ solicitors send us a draft sale contract and the full “package” of supporting documents. We cannot even apply for the Local Search until the sellers’ solicitor sends us a plan showing the location of the house.
When the draft contract and supporting documents arrive and when we have replies to our searches, we will check them carefully, negotiate any necessary changes to the draft contract, and make any appropriate extra enquiries or searches. We will also send you a full written report at this stage.
When your mortgage offer is issued, the lender will send us a copy. We will check it through, ensuring that any conditions imposed by the lender have been or will be met, and that you are aware of any requirements for insurance or for repairs to the property which the lender imposes. You should also read your copy of the offer and its related conditions very carefully and raise any questions which you have with us or the lender.
3) Approaching Exchange of Contracts
When all the paperwork is in order, we will ask you to make an appointment to come into the office to go through the documents with us in detail and to sign the contract and mortgage documents. We will give you copies of all relevant documents, for your records.
sInce every party in the chain has got to this stage, contracts can be exchanged.
When contracts are exchanged, the date for the completion of the purchase (ie.” the moving date”) must be written into the contracts, so everyone in your chain needs to have agreed this date in good time before exchange.
You can move in on completion day, so you should make sure, before you agree the completion date, that you can find a remover that is available on the date you require.
The completion date can be any working day (excluding Saturday, Sunday and Bank Holidays) provided there is at least one week between exchange and completion. The reason for this is that the buyer’s solicitor has to do several things between exchange and completion, including getting mortgage money from the lender, and this all takes time.
4) Exchange of Contracts
Until contracts have been exchanged, neither side is bound by law to go through with the transaction. When contracts have been exchanged, you are bound to buy and your seller is bound to sell, at a fixed price on a fixed date.
You will sign your part of the contract before exchange and we will hold it on our file until everyone is ready to go ahead. When everyone in the chain is ready, we will ask you for your specific instruction to exchange contracts before we go ahead and commit you to the purchase.
You must pay a deposit (usually between 5% and 10% of the price) to the seller’s solicitor upon exchange. If you are selling another house at the same time, we can usually arrange to use the deposit we get in on your sale towards the deposit you will have to pay on your purchase, but we may need some extra money from you. Please note we can only pay out against “cleared funds” so any cheque you give us must reach us seven working days before we need to use the money, to allow for clearance through the bank. Alternatively, you can pay this by way of a banker’s draft, Building Society cheque or by direct bank transfer.
Insurance on the new house, and any life or endowment policies needed in connection with your mortgage, must be in force at exchange of contracts.
5) Between Exchange and Completion
During this period we will prepare the transfer deed (the document transferring the ownership of the house to you) and send it to the seller’s solicitor. He will arrange for the seller to sign it in readiness for completion. He will then hold it on file until the sale price is received in full from us on the day of completion.
We will give your mortgage lender notice to pay over the mortgage money in time for completion and make further searches which can only be made just before completion.
We will also prepare a “completion statement” showing all the money coming in and all the money to be paid out. This will show whether there is money due to you on completion, or whether money is required from you to complete the transaction.
If extra money is needed from you, we will have to have cleared funds on the day of completion, which means we will need either a direct bank transfer (“CHAPS transfer”) to our account on the day before completion or a cheque in our hands one week before completion, to allow for clearance.
It is your responsibility to tell the Local Authority and the water, power and telephone companies of your move, and to arrange for supply in your name from the date of completion.
Your task for the day of completion is to move house!!
While you are doing this, we will pay the balance of the purchase price to your seller’s solicitor, by CHAPS transfer. If you are in a chain of transactions, money must move along the chain to reach us before we can do this. We will stay in touch with you over the telephone and tell you as soon as this happens. We cannot predict accurately when it will happen, because the timing will depend on the length of the chain of transactions and the banking delays in moving the money, but you should aim to be ready to move by midday.
Delays can occur, and it is not legally safe for the seller to hand over the keys to you until the seller’s solicitor can tell him that the money has arrived at his bank. Usually, the seller leaves the keys with the estate agents when he moves out.
When the money arrives at the seller’s solicitor bank, the seller’s solicitor will authorise the estate agents to release the keys to you
7) After Completion
We must first make sure that the seller’s solicitor sends all the title documents to us. We must then pay any Stamp Duty Land Tax chargeable on the purchase. This must be done within 28 days of completion, or the Inland Revenue may impose an additional penalty on upon you. If you are obtaining a mortgage we must collect this money from you prior to completion.
8) Stamp Duty Land Tax Receipt
Once we have the Stamp Duty Land Tax receipt which is usually obtained online, the next step is to apply to HM Land Registry for registration of your ownership and of the interest of your mortgage lender (if any). Again, we must do this to a strict timetable.
We will have included Stamp Duty and Land Registry fees in our completion statement so we will already have this money and we should not need any more from you.
When registration has been completed, we will send you copies of the new register entries for your personal records.