DON’T PANIC!
Whether you’re an old hand at the game or a first-time buyer, buying and selling houses can be a stressful experience. You may have spent weeks (even months) looking for the perfect home. You’ve
researched the market, the schools, the maximum you can afford, the
travel time to work, etc and, at last, you’ve found the place for you. You’ve made an offer and it’s been accepted.
If you are not a first-time buyer, then your existing house is on the market and it has never been so clean and tidy. You’ve lost count of the times you’ve stuffed the ironing into a cupboard and the vacuum cleaner is on permanent overtime. But it’s all paid off. You’ve got a firm offer at a price that you’re happy with.
All that needs to be done now is the paperwork and that won’t take long, will it?
The
honest answer is usually two or three months and the aim of this brief
guide is to give you an idea of what’s happening during this time. We cannot guarantee that this will eliminate all stress but we hope that it will reduce it to manageable proportions. There are, however, three Golden Rules:
Rule 1: At some stage, the process will seem to be taking an eternity
Rule 2: At some stage, it will seem that nothing is happening
Rule 3: At some stage, everybody is subject to Rules 1 and 2
We
at McKenzies understand the frustrations in the process, which is why
we always make sure that you deal with the same solicitor from start to
finish. For us, a conveyance is never a conveyor belt.
SELLING A HOUSE – PLEASE READ ABOUT HOME INFORMATION PACKS ON OUR LATEST NEWS LINK
Once
you have agreed a sale, your estate agents will send us a memorandum of
sale setting out the price agreed, details of the buyer and their
solicitors. We will then contact the buyer’s solicitors.
We will need you to tell us where your title deeds are. If you have a mortgage, your deeds will be with your lender and we will need your mortgage account number to request your deeds. We will also require a small sum of money from you. Once
we have the title deeds we shall draft the sale contract and forward it
to the buyer’s solicitor along with a copy of the deeds.
There is then a delay as the buyer’s solicitors conduct searches and await a mortgage offer. At this stage, the buyers themselves may arrange for a survey on your property to be carried out. The buyers solicitors may raise some enquiries in relation to your property. When all searches and surveys have been carried out and enquiries have been dealt with, the contract can be signed. One copy is signed by you, another copy by the buyers.
Exchange of contracts will then take place and a completion date will be agreed. Remember that exchange of contracts is the stage at which both parties are legally obliged to go ahead with the sale/purchase. If you do not proceed after exchange, the buyer may sue you for breach of contract. After
exchange, we will contact your mortgage lender for your existing house
to obtain a loan repayment figure and prepare a completion statement.
Prior
to completion, you should arrange for all payments for your mortgage
and property insurance to cease on the day of completion (but not
before). You should also take meter readings on
the day of completion to ensure that you only pay for services you have
used and notify the Council and all utility providers (gas,
electricity, telephone, etc.) of your change of address.
On completion we will forward to any lender the necessary monies to redeem your mortgage.
Following
completion, we shall pay the estate agents’ fees on your behalf from
the sale proceeds and forward the net proceeds of the sale to you or
use them in a related purchase as appropriate.
Back to Top
BUYING A HOUSE
Stages of the transaction
The first thing that happens is that we will receive a draft contract and title papers from the Seller’s’ solicitors. We will require a sum of money from you to pay for search fees. Once we have the money, we shall submit searches to the local authority, water authority and environment agency. What you can expect from these is detailed later in this guide. If you need a mortgage, these searches are obligatory. If
you are purchasing without a mortgage, you may decide not to bother but
we would always advise you to have these searches carried out. You’re risking your own cash and that must be at least as important as risking the Bank’s money!
Once
you (with our advice) are fully satisfied with the conditions under
which the property is being sold and with the form of the contract, one
part of the contract will be signed by each party and the parts
exchanged. At the same time, you are usually
required to let us have 10% of the purchase price which we will hand
over as a deposit on exchange of contracts. Having
exchanged contracts, you are legally committed to the transaction so
you need to make sure that all queries are dealt with before exchange
takes place. If you do not proceed after
exchange, you may be sued for breach of contract by the seller who
would also be entitled to keep your 10% deposit.
After
exchange of contracts, we shall submit a search to the Land Registry to
ensure that no changes to the title have taken place after the date of
the copies supplied to us. If you are purchasing with a mortgage, a bankruptcy search will also be carried out.
We will also need the money from you to complete the purchase. This
is usually the whole of the purchase price less the 10% deposit you
have already paid and (if we are involved in the sale of your existing
house) less the cash you have received for your sale. If
you have arranged a mortgage, we shall request the money from your
lender for the day before completion. This is done to avoid any
unnecessary delays on the day of completion. You will be charged interest on your mortgage from the date we receive the money from your mortgage lender.
Completion
normally takes place approximately one to two weeks after exchange of
contracts but any time can be arranged if all the parties agree. Sometimes,
completion takes place on the same day as exchange of contracts,
although we would not generally recommend this since it can be very
rushed. Finally, you should also take meter
readings on the day of completion to ensure that you only pay for
services you use after completion and contact the Council and all
utility providers to notify them of your ownership of the property.
Back to Top
SURVEY
We would strongly recommend that you arrange for a full structural survey to be carried out on the property you want to buy. You
are likely to be spending a lot of money on this purchase and the
sellers are under no obligation to point out to you any defects of
which they are aware.
Your
mortgage lender may arrange a survey, but this may not be as
comprehensive as you would like and the surveyor doing the job in this
case may only be liable to the mortgage lender (and not to you) for
anything he misses in the survey.
Back to Top
TITLE
The property is described by reference to the plan filed at the Land Registry. It
is important to remember that you are being sold the land as indicated
on this plan and not the land actually fenced at the property. Of course, the two should be the same but this is a point you may wish to ask a surveyor to check.
The
property is usually registered at the Land Registry but it may be
unregistered if the property has not changed hands for some time. In
any case, the title will reveal what rights and obligations are
attached to the property and perhaps any adjoining property (for
example, access rights). It also sets out any restrictions that the owner of the property must adhere to.
Back to Top
INSURANCE
The property will be at your risk as soon as you have exchanged contracts. You
should insure for the cost of re-building the property and not simply
for the purchase price and your surveyor will be able to advise you on
this point.
Back to Top
LOCAL SEARCH
It
is necessary to carry out a Local Authority Search on your purchase
which is a printed form sent to the Council and will provide
confirmation as to whether the property is affected by any Road or Rail
Improvement Scheme, compulsory purchase, breach of planning/building
regulation and other relevant matters.
Please
note that whilst a Local Search deals with road/rail proposals within
200 metres of the property and other matters, it will not provide any
information regarding any development proposals, including extensions
in the surrounding area of the property you are purchasing. It
may be possible to make enquiries with the local Council if you are
concerned about the possibility of any development proposals, in which
case we suggest that you satisfy yourselves as to this prior to
exchange of contracts.
Back to Top
DRAINAGE SEARCH
This shows whether the property is connected to the mains water supply and drains for both surface and foul water. It
also reveals if there are any drains under or around the property that
may affect your ability to build an extension. (Building over drains
requires consent from the water authority.)
Back to Top
ENVIRONMENTAL SEARCH
This shows any industrial uses in the vicinity of the property.
Back to Top
AND FINALLY……
The keys. Of course, you need to arrange to collect the keys. Don’t
forget to remind your Seller to let you have not only all the keys of
the front and back doors but keys for any garage, outhouse, greenhouse,
windows etc
So, if you’re on the move and ready to buy and sell, contact us.
For a free no obligation telephone consultaion please call 020 8350 4114 during office hours or 020 8350 1451 out of office hours.
Alternatively simply fill in our online enquiry form.
