Conveyancing experts’ advices before purchasing a property
The housing market is now gradually recovering from Covid-19 lockdown consequences, and as it shifts back, people are willing to get a new property.
The experts at The University of Law have prepared five advices for home buyers to get prepared for the moving process properly, from the solicitor’s point of view. Here are five things you should know before buying a new home:
1. Process details
The two main stages in buying a home are the exchange of contracts between buyer and seller and the completion when the buyer collects the keys. Some special measures must be taken here:
1) Your solicitor will draw up contracts outlining the terms of the purchase and conduct all the thorough property searches and help agree on a completion date before exchanging contracts.
2) On the completion day, the conveyancer will exchange funds to the seller so that the process can be completed. They will also pay any Land Transaction Tax or Stamp Duty required to register a new property in the land registry.
2. How to become legally bound to proceed
Until the exchange of contracts has taken place, the buyer has the right to change his mind and refuse to purchase without incurring any consequences. But if the solicitor has drawn up a contract and you have agreed a completion date with the seller, you must sign the contract and pay a deposit (usually 10% of the property value). After that, a legally binding agreement is entered into and now there is an obligation for you to complete the transaction.
If, after exchanging contracts, you decide to withdraw from the purchase agreement, you will lose the whole deposit and may be sued for breach of a contract
3. Issues with delays
The whole process of ownership transfer takes about 8-12 weeks, due to the complex nature of the transaction. However, this depends on a case and how complex the transaction is and whether you are part of a longer chain of buyers and sellers. If you are waiting for another person in the chain to sell their property, the process could be delayed. Delays are often inevitable and should not be a cause for concern; Your lawyer should be in constant contact with you to keep you informed of any concerns.
4. Breakdown of costs and unexpected fees
Usually legal fees range from £ 850 to £ 1,500, but this depends on the value of the property and may increase depending on the amount of third party payments required.
To protect customers, local authority checks and individual anti-money laundering checks are necessary in most cases. Additional administrative fees must also be considered, such as searches in the Land Registry as well as fees for monetary transactions and document checks.
A lawyer should always give you a breakdown of the cost of each service in advance, which will only change if additional checks are required during the initial search.
5. Service payment
The process of paying legal fees for the transfer of ownership varies from firm to firm. Often you are asked to pay a deposit when you agree to use a lawyer (usually 10% of the agreed fee). After that you pay the rest of money after completing the purchase of the property.
Still, if additional searches arise during the entire process, the carrier may require immediate payment in order to be able to move on.
Alex Morrice, senior tutor at ULaw, sums up: “With the UK housing market now starting to recover and more people looking to purchase their next or even first house, it is important to make what can be a long, complex and often stressful process as concise and easy to understand as possible.
“The first step should be doing the research to give yourself even a very basic understanding of the legalities of each stage of the conveyancing process. Arming yourself with this knowledge will help to stop the paperwork and legal processes from being such a daunting prospect for those either looking to make the move to a new home or get their first foot on the property ladder.”