Conveyancing is the name given to the legal process of transferring ownership of the freehold or leasehold of a property. There are four stages in buying/selling a property:
Stage 1 - Preliminary Negotiations
- The seller and buyer agree the purchase price and what if any items of fixtures and fittings are included. Estate agents are usually involved at this stage to assist.
- Finance: The buyer arranges for mortgage finance with Bank/Building society if this has not already been done.
- The buyer arranges for a survey to be carried out. This is usually arranged through the agreed lender.
- Both the seller and buyer instruct their respective solicitors.
Stage 2
- This is before exchange of Contracts
- The seller's solicitors obtain the title deeds from the seller's mortgage lender and prepare draft contracts and property information forms which are then sent to the buyer's solicitors.
- The Buyer's solicitors check the draft contract and property information forms to look for amongst other things that the seller has the right to sell; there are no current disputes with the neighbours over say rights of way or local authority with planning permissions.
- The Buyer's solicitors carry out various searches with the local authority and water company to confirm that all necessary planning and building regulations have been complied with and that Local Council are not proposing to build any roads through the property and that the property has the benefit of public sewers and drains etc.
- Where the buyer is buying a flat/leasehold property the transaction is more complicated and the buyer's solicitors need to check the conditions imposed on the flat owners for repair and maintenance of the building of which the flat forms part and the financial responsibilities imposed on the Flat owners by way of service charge.
- At this stage either the seller or buyer can withdraw from the transaction for a variety of reasons for example, an adverse survey report, lack of planning permission or a higher offer from another party.
- If the buyer's solicitors are satisfied with their investigations they report to the buyer with a contract for signature and requests a deposit usually 5% or 10% of the purchase price
Stage 3- Exchange of Contracts
- Exchange of contracts takes place when both the buyer's and seller's solicitors agree the price and the terms of the contract and the completion date by telephone.
- The buyer's solicitors pay the deposit to the seller's solicitors.
- There is now a legally binding contract between the seller and buyer. Failure to complete will be a breach of contract. If the buyer pulls out for no valid reason then the seller will be entitled to forfeit the deposit and if the seller withdraws then the deposit will have to be returned and the buyer may be able to seek compensation for all costs incurred.
- As soon as contracts are exchanged you will be notified and advised of the completion date.
Stage 4 - Completion
- Prior to completion the buyer's solicitors will obtain the buyer's signature to the Mortgage deed on behalf of the lender and verify the identity of the borrowers/buyers.
- Final searches are carried out at the Land Registry and the Transfer deed is signed by the seller.
- The mortgage monies and balance monies are collected in readiness for completion.
- Both the seller and buyer make arrangements for removals.
- On the day of completion funds are transferred from the buyer's solicitors' bank to the seller's solicitors' bank usually by telegraphic transfer.
- The keys are released to the buyer usually by the agent when the seller's solicitor confirms safe receipt of the funds.
- The seller moves out and the buyer moves in.
- The buyer's solicitors receive the deeds from the seller's solicitors and then proceed to pay the Stamp Duty Land Tax and register the buyer as the new owner at the Land Registry.
- The deeds are then sent to the buyer's lender for safe keeping or to the buyer if there is no mortgage.
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