The Conveyancing Process – Buying a New Home
Part One of our Guide to Conveyancing focuses on Home Buyers
We at Boyd Rice Solicitors recognise that the work of solicitors in the conveyancing process is not very well understood. This is the branch of law which is concerned with the transfer of an interest in land from one person or entity to another. Part of the blame here rests with the failure of us, as solicitors in general, to communicate in clear terms what is really happening when you buy or sell your property. To help resolve this we have prepared a two part guide to the conveyancing process. This part will focus on those purchasing a new property.
Selecting a Solicitor
At the very beginning you will have put an offer in on a property and you will have had that bid accepted. The estate agent will then ask you the name of the solicitor that is going to represent you in the conveyance. Like many people you may have never had any direct experience with a solicitor before. The estate agent may recommend some to you or you may wish to search of the internet to find one. We would suggest getting written quotations from a range of solicitors as that will help you make an informed choice. Ask to speak directly with the solicitor who will be acting in your transaction. Make sure you are able to build a rapport with them and decide whether they will be responsive to your queries and endeavour to move things along quickly.
When you have selected a solicitor and notified the estate agent, the agent will send a Memorandum of Sale to your solicitor. This will provide the solicitor with confirmation of the following items; the full address of the property, the name of the vendor, the vendor’s solicitor, the purchase price and any other conditions that have been stipulated.
Your solicitor will send you a letter of engagement with terms to accept and return. Your solicitor will ask for copy identification and proof of address to comply with their regulatory obligations. Your solicitor will also discuss with you whether you are funding the purchase with a mortgage or with cash and will confirm the source of any funds that you are providing yourself (including whether you will be drawing down from a Help to Buy ISA or a Lifetime ISA).
Title Deeds, Certificates and Searches
The onus is on the vendor’s solicitor to provide certain documentation. The most obvious of which is the title documentation (deeds) relating to the property to be purchased. The length of time it can take for your solicitor to receive the deeds can vary wildly. If the vendor does not have a mortgage then it is likely the solicitor will have possession of the deeds and your solicitor should receive them relatively quickly. However more often than not the vendor will have a mortgage.
In this scenario the vendor’s mortgage lender will be storing the deeds. The vendor’s solicitor will have to request the deeds from the mortgage company. The time taken before the deeds are received from the mortgage company has increased significantly over time. This is due to various factors including job cuts resulting from the financial collapse and increasingly the mortgage lender will have sent the deeds to a third-party storage provider to hold them on their behalf. A wait of a month is not uncommon.
Along with the deeds the vendor’s solicitor will send a draft contract, which will incorporate the Law Society’s General Conditions of Sale, and any special conditions deemed relevant at that time.
The vendor’s solicitor is obliged to obtain two property certificates. One is sought from the local council and one from the DOE. The wait times are two to three weeks typically. Solicitors are increasingly encouraged to order these as soon as possible in the process to avoid delay later. However many solicitors still have a practice of not ordering these until they have received the deeds or the purchaser’s solicitor has confirmed that a mortgage offer has been received. Depending on the contents of the DOE property certificate the vendor’s solicitor may need to order a NI Water map to demonstrate the location of any sewers traversing the property. It takes a couple of days for this to come in.
The vendor’s solicitor is obliged to obtain Bankruptcy and Enforcement of Judgment Office Searches against the vendor. This will inform your solicitor whether there may be any restrictions on the vendor selling the property.
Another necessary search is in the Statutory Charges Register. This search is against the property rather than the vendor and may indicate issues regarding planning, sewerage, roads, etc.
Your solicitor will assess all these documents and advise you accordingly on whether there are any issues which may give you pause before you decide to proceed with the purchase.
Replies to Pre-Contract Enquiries and Fixtures and Fittings List
This is a key document. Completed by the vendor and his/her solicitor, it is a questionnaire which covers almost every conceivable aspect of the property. Depending on the answers your solicitor may have enquire further before he/she can be satisfied that everything is in order. The most common issues that arise are around planning permission and building control.
Your solicitor will want to ensure there are appropriate consents in place for any work that has been carried out. If the property is leasehold your solicitor will follow up by requesting a receipt to make sure the ground rent has been paid up to date. If the property is fed by mains gas then your solicitor will demand a gas safety certificate from within the last twelve years to make sure there are no faults.
Mortgage Application and Surveys
Whilst this exchange of documentation is ongoing you will be securing your mortgage offer. You may decide to use the assistance of a mortgage broker or apply directly to a lender. Either way, if the bank decides to provide you with an offer it will ask you who your solicitor is. The bank will then send a copy of the offer and instructions to your solicitor. Your solicitor will act for you and the bank and has a duty to protect the interests of both.
Your mortgage lender will send a valuer to the property to obtain a valuation. This valuation is to protect the bank by informing it whether the property is worth the money that has been agreed. If the valuer thinks the property is actually worth less than has been agreed the bank will not lend at the original purchase price. You have the option, at your own expense, to obtain a survey of the property. This is usually recommended. This survey will be a comprehensive review of the condition of the property. It will flag up any issues which may ultimately cost you money. These surveys are often useful in negotiating a reduction in the purchase price.
The time between the signing of the contract and completion has shortened over the years. There is no need to get too concerned if you are completing in a week and the contracts have not yet been signed, just speak to your solicitor.
The purchaser signs the contract first. It is then sent to the vendor’s solicitor. The vendor signs and once it is returned to the purchaser’s solicitor the contract is formed and binding. In practical terms, this is the point of no return. If you try to back out after this point the vendor has options such as utilising the courts to ensure the contract goes ahead or they may keep any deposit that has been paid and attempt to get a new purchaser.
Given this, your solicitor will attempt to ensure your mortgage offer is in place, all the necessary documentation has been received and that there are no title issues before allowing you to sign. If there are matters outstanding and time is of the essence then the contract may be signed subject to special conditions, e.g.: “Contract is subject to the vendor producing a building control certificate for the installation of the gas fired heating system prior to completion”. If the special condition isn’t satisfied then the purchaser can delay or walk away.
At the same time your solicitor sends the contract to the vendor’s solicitor, he/she will send a draft deed. This is the document that will formally transfer the legal interest in the property to you. The vendor’s solicitor will have the vendor sign this and hold on to it until after completion.
In the run up to completion your solicitor will confirm with the Bank that there are no issues with the property and will confirm the date of completion. The bank will then arrange for the mortgage funds to be paid to your solicitor in or around the day before completion.
Your solicitor will draft up a cash statement for you so that you know the exact amount of money that you have to send him/her in advance of completion. This will cover their fee, stamp duty and the balance of the purchase price.
Depending on the contract your solicitor will either send a cheque for the purchase price to arrive on the completion date, or they will send a bank transfer on the day itself. Once this has been received the vendor’s solicitor will contact the estate agent to inform them that they may give you the keys. They will also contact your solicitor, who will rely that information to you.
The vendor’s solicitor will subsequently send the transfer deed to your solicitor who will proceed to register the change of ownership and your mortgage. You, on the other hand, can enjoy your new home!
If you would like advice in relation to buying and/or selling property please give us a call on 02891 817715 or contact our property team by email at firstname.lastname@example.org.