For most, buying or selling a house is something the majority of people will only do a handful of times, if that, during their lives. In the legal world, we refer to the process of buying or selling houses as conveyancing.
The conveyancing process may sometimes appear complicated and shrouded in mystery. However, it need not be and that is the purpose of this article and the attached infographic. It is my intention to demystify, answer some of the most frequently asked questions and set out the conveyancing process in broad strokes from start to finish.
CHOOSING YOUR SOLICITOR
Your choice of solicitor and relationship with them is one of the most important decisions you will make in the conveyancing process. Choosing the right solicitor will have a bearing on and influence your experience of the whole conveyancing process.
Your solicitor should put you at ease and make the conveyancing process as smooth as possible. They should identify problems and present solutions. You should have a good rapport with your solicitor and feel comfortable picking up the phone to them.
Traditionally most people don’t have cause to be in contact with their solicitor on a regular basis. They can feel intimidated and reluctant to ask questions for fear of being perceived as “stupid”. A good solicitor will be happy to answer such questions. A great solicitor will pre-empt them.
My advice would be to think carefully before choosing your solicitor. Speak to your family, friends, and colleagues ask for their honest recommendations and be informed by their experiences. A referral is the highest form of complement in our business. As with all things in life, generally, you get what you pay for. If you are motivated solely by price, do not be surprised if you’re conveyancing experience is more unpleasant than it need otherwise be
STEP ONE: FUNDS AND BUDGET
Get loan approval in principle from your Bank. Loan approval in principle is confirmation from a Bank that they would be willing to lend a certain amount of money to you. You should shop around when choosing your mortgage provider, do not feel obliged to stick with whichever bank has your current account. Consider using a mortgage broker in order to find the best deal for you. Many auctioneers will not arrange house viewings unless you have obtained loan approval in principle.
The cost of buying a house is more than the asking price. Ask your solicitor to provide you with an estimate of the outlays involved in order to allow you to prepare a budget. Outlays would include Stamp Duty, Land Registry fees and your solicitors’ professional fee.
STEP TWO: MAKE AN OFFER
Make an offer. Once accepted you will have to pay a booking deposit. This is fully refundable prior to the signing of contracts if for any reason the sale does not go ahead.
Once the offer has been accepted the auctioneer will prepare and send a Sales Advice Note, with all of the relevant information to your solicitor.
STEP THREE: YOUR SOLICITOR WILL REVIEW CONTRACTS
Your solicitor should carry out a planning search against the property. This planning search will examine various aspects concerning the planning permissions attached to the property.
Your solicitor will receive the contracts (in duplicate) and title documentation from the seller’s solicitor. Your Solicitor will then “read title”, meaning they will review these documents and in so doing will identify any number of issues or questions they have regarding the title furnished. The sellers’ solicitor will have to answer any of these questions raised by your solicitor
STEP FOUR: SIGN CONTRACTS
Where you are getting a mortgage to pay for the property your solicitor should insert a special condition into the contract. This makes the Contract subject to your successful loan drawdown. In the event that your bank decides, for whatever reason, not to loan you the funds, your deposit will be fully refundable and you will not be contractually bound or obligated to complete the contract.
Once your solicitor is happy that all of the questions have been answered and that the legal title to the property is in the order they will arrange for you to sign the contracts and pay the balance of the 10% deposit
Your solicitor will then return the signed contracts (in duplicate) and the balance of the deposit to the seller’s solicitor, who will then arrange for the seller to sign the contracts and return one fully executed copy of the contract to your solicitor. It is at this stage that a fully binding contract at law comes into existence.
STEP FIVE: SIGN THE LOAN OFFER
The bank will send your solicitor a loan drawdown pack, which will contain multiple documents most importantly, the loan offer. Your solicitor should go through all of the documentation with you and explain the specific conditions contained within your loan offer. They will then get you to sign all the documentation and return the signed loan offer to the bank.
Your solicitor will attend to all of the legal drawdown requirements. You will be required to handle all of the non-legal drawdown requirements such as arranging house insurance, life assurance and property valuations.
Your solicitor will coordinate the drawdown of the loan funds to coincide with the closing date, drawdown of funds from the bank normally takes 7 to 10 days.
STEP SIX: CLOSING
Your solicitor should write to you in advance of closing. They will outline a note of the amount of funds they will require from you in order to close.
Normally, the seller’s solicitor will post all of the closing documentation to your solicitor in advance of the agreed closing date. Your solicitor will transfer the balance of the purchase funds to the seller’s solicitor to be held in trust pending the closing of the sale.
Your solicitor will review the closing documents received. Once they are satisfied that everything is in order they will carry out closing searches against the sellers, the property and you (if you are getting a mortgage). The purpose of these searches is to ensure that no judgements or burdens have been registered against any of the parties and to ensure that you getting clean title to the property.
Assuming everything is in order, your solicitor will authorise the release of funds to the seller. Then the seller’s solicitor will authorise the release of the keys to you. Normally the keys can be picked up from the auctioneer.
STEP SEVEN: STAMP DUTY AND REGISTRATION
Your solicitor will pay the stamp duty Revenue. Once “stamped” your solicitor will register your ownership of the property in the Land Registry. The registration process can take several months. Once registration has completed, your solicitor will “take up”a copy of the Folio file plan from the Land Registry. This Folio will show your ownership of the property and any charges registered on title (i.e. a mortgage). It will also include a map setting out the boundaries of the property
Your solicitor will add this Folio to and prepare a schedule of title documents. If you have a mortgage on the property your solicitor will send these documents to your bank to be held until such time as you have cleared the mortgage. If you do not have a mortgage they will return directly to you.
Your solicitor should prepare and send you a cash account and fee note.