The Conveyancing Process
Here are answers to some of the more frequently asked questions about buying and selling homes.
Will I actually need to come into the office or is everything done over phone and email?
We will need to carry out identification checks on you, so if you are able to come into the office that would be useful, but it is not essential. We appreciate this can sometimes be difficult with working hours etc, so we can deal with this aspect remotely.
You may find it useful to come into the office at a later stage to run through any queries you may have, and some clients like to put a face to the name. We are always happy to arrange a meeting with you but are equally happy to correspondence by email and telephone.
Why do you need to know so much about my finances?
We are required to carry out identification checks and checks on your source of funds and source of wealth. As solicitors we are required to comply with various Money Laundering Regulations imposed on us by our governing bodies, and this includes clarifying the source of any monies received into this firm from you.
We also find that understanding more about you and your situation can help us to ensure we are providing as full a service as you may need.
What do I need to pay my solicitor and when?
We request £500 to be deposited into our bank account at the beginning of each of your sale and purchase matters. For your sale this allows us to obtain a copy of your title from the Land Registry, and for any leasehold properties request the information pack from the Landlord/Managing Agents for which they always charge a fee. For your purchase, this covers the costs of the initial searches carried out over the property.
The fee for our services is set out on our quote and is payable on completion. For a sale these will be deducted from the proceeds of the sale of your property. For your purchase we will charge you at the same time that we request the balance of the purchase price of the property you are buying along with the Stamp Duty & Land Tax (SDLT) and Land Registration fees. All of these will be included in the Completion Statement that we send to you before completion.
What are disbursements?
These are fees that buyers and sellers need to pay as part of a conveyancing transaction. We will pay the disbursements on your behalf so will ask you for the funds in advance. Typical disbursements for property include stamp duty land tax (SDLT), searches, HM Land Registry fees and bank transfer fees.
How do I pay the balance on my mortgage when I am selling?
Once you have instructed us, we will ask you to fill in various forms so we have all the information we need – this includes asking you for your mortgage account number. This will allow us to request a redemption statement from your mortgage company, and we will deal with the repayment of the outstanding balance on completion of your sale.
How do I pay my estate agent when I sell my property?
We will arrange for payment of your estate agent’s fees out of the money you receive for the sale and any balance will be sent to you.
How do I organise for my mortgage loan to be ready for buying a property?
We will receive a copy of your mortgage offer directly from your lender, as this contains some additional information and instructions from the bank to us. Once you know the completion date (usually agreed after an exchange of contracts) we will contact the mortgage company and ask them to release funds for for completion. This is done by way of a Certificate of Title. As the banks cannot generally guarantee the time the money will be with us we will request the funds to be released for the working day before completion, just so we can avoid any delays on the day. Your mortgage company may charge you interest from the day the mortgage money is released to us.
I am putting in more than 10% deposit so why are you only asking for 10% on exchange?
Irrespective of how much deposit you are putting down it is only 10% of the purchase price which is required for exchange of contracts. (Some new build contracts do require more than this, or more than one deposit, and we will of course discuss this with you).
If you have are selling at the same time as buying, it is general practice for the deposit received on your sale to be used as the deposit on your purchase. This may not be the full 10% of the purchase price so depending on how much is available you may need to top this up. It will still only be a total of 10% of the price required as a deposit.
I’m buying a new build property – is the process different?
Yes and no. The process as detailed in our Conveyancing Process Flowchart is generally the same, except that at exchange of contracts you may not be offered a fixed completion date. If the property you are buying is not physically complete at the point you exchange contracts the developers are unable to agree a specific completion date. They should give you an estimated date, but this is only an estimate. The completion date is only agreed once the property is ready for you to move in. When it is, a notice will be served by the developer’s solicitor stating the property is ready, and stating the date you will need to complete. This is usually two weeks (10 working days) from the date the notice is given.
What actually happens on the day of exchange of contracts?
We would need to speak to you on the day of exchange, in order to get your express authority to exchange contracts. This can be by phone or email. We would need your signed contract, and if you are only buying (i.e. you are not selling at the same time) we would also need to be holding the money for your deposit.
The exchange process is a series of phone calls between the solicitors. In order to exchange, each solicitor will need to be holding their client’s signed contract, and the people at the bottom of the chain need to have their deposit in place. If there is a chain, the solicitors at the bottom agree to ‘release’ the contracts, and the next solicitor used this to ‘release’ their contract upwards. Once this arrangement has made its way up the chain to the top, a process of confirming exchange then makes its way back down the chain.
On exchange the completion date is entered into the contract, and once exchange has taken place this date becomes legally binding. The risk for buildings insurance passes to the buyer on exchange, so if you are buying you should arrange for your policy to start from this date.
What actually happens on the day of completion?
Just like exchange is a series of phone calls, completion is a series of money transfers. In the case of a sale and purchase, we would need to wait for your money to arrive from your buyer’s solicitors in order to pay these into our account, and then set up a money transfer to your seller’s solicitors.
For your sale, once the money is in our account we will confirm to the estate agents that completion has taken place and that they are authorised to release the keys to your buyers. You will need to ensure that you have vacated your property, and dropped the keys into the agents, by 2pm, or such other time that may have been agreed under the contract.
For your purchase, you will be able to collect keys from the estate agents once the seller’s solicitor has confirmed receipt of your money, and authorised the agents to release the keys. You may need to take evidence of identification with you to collect keys from the agent, and for new build properties they will usually provide a handover at the property itself.
We would recommend reading the meters on the day of completion at the property you are selling and buying. If you are selling you should contact your utilities providers and request a final invoice using these figures. If you are purchasing, you should set up an account using these figures as the starting point.
How long will this all take?
It is very difficult to give a specific answer. The time taken to reach an exchange of contracts does depend on a lot of factors – your mortgage offer being issued, search results being returned, enquiries being raised and responded to etc. If you are in a long chain of buyers and sellers everyone has to reach this point together, and as with anything some can take longer than others. It rarely takes less than 12 weeks and it often takes longer.
There is no set time between exchange and completion, and the completion date should be agreed between you and the other parties. The estate agents are very useful in helping everyone to reach a convenient date. If you are purchasing with a mortgage we would usually need at least a week’s notice to request mortgage monies, and completion will need to be on a working day.
Here to Help
If you are thinking of selling or purchasing a home or need advice on any other residential property matter, please contact with Karen Fletcher, Senior Solicitor specialising in Residential Property.
Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.
