If you’re a first-time buyer, we wouldn’t blame you for feeling a little overwhelmed about purchasing a house. To help de-mystify the process, we’ve put together an easy-read guide to conveyancing, so you know exactly what solicitors’ fees are actually paying for.
What is conveyancing?
Conveyancing involves the legal transfer of home ownership from one party to another, and is usually handled by a solicitor, or a licensed conveyancer. The process begins when you make an offer on a home, and continues until your ownership of the property is registered at the Land Registry.
How does it work?
When your offer on a home is accepted, you’ll need to instruct a solicitor to do the conveyancing. The best way to choose a professional to help you is to ask for recommendations from people you trust.
Once you’ve found a solicitor to handle the conveyancing process, they will provide you with all their terms and conditions and ask for signed acceptance of these along with an initial payment, before setting to work.
Your solicitor will contact the developer or the seller’s solicitor to confirm that they are instructed to act and request all relevant contract documents, ie: draft contract, title documents and other relevant information. Your solicitor will raise any relevant enquiries with the developer’s or seller’s solicitors.
A report will be produced for you containing all the information you require and a draft contact will be provided to you.
The draft contract
You will need to read over the draft contract and any other documents that are provided to you. If you have any questions, your solicitor will be on hand to answer them. Once you are happy with the information, you should sign the contract.
Your solicitor will conduct searches to assess different aspects of the property. These legal searches will be recommended by the solicitor and your mortgage lender, and may include:
● Local authority searches to check for any planned developments or health risks that may affect your new home
● Water authority search to confirm that the property is connected to mains water/drain and sewer
● Chancel repair search to check for medieval liabilities to maintain local churches
● Environmental searches to find out if there is any contaminated land, nearby landfill sites, floodplains or land stability issues
● Other location specific searches, such as mining searches in some areas of the UK or flood searches
These searches can take up to six weeks, depending on the local authority. You may be offered Search Insurance and your solicitor will discuss this with you if it is appropriate.
You will need to obtain your mortgage offer at the earliest opportunity. You will need to advise your mortgage lender who your solicitor is and they will send a copy of the mortgage offer directly to them. Your solicitor will check any special conditions contained within the offer and verify that the information held by the lender is correct. A report will be produced for you outlining all the findings and you will be asked to sign a mortgage deed.
The next major conveyancing milestone is ‘exchanging’, where contracts between the seller and buyer are exchanged, resulting in a legally binding contract.
The time it takes to reach exchange may vary from between 6-8 weeks but may be longer depending if there is a chain (a series of linked sales and purchases).
Land Registry searches will be undertaken by your solicitor in order to protect the financial interests of both yourself and your lender
You’ll also need to transfer your deposit (10% of property’s value or 5% if the property is Help to Buy) to your solicitor who will hold it until the exchange date.
Contracts are exchanged by your solicitor. Once exchange has happened, the seller is legally obliged to sell and you are legally obliged to buy. If you do exchange contracts but fail to complete the purchase on the agreed date, you may lose your deposit and/or incur costs.
Once the contracts have been signed and exchanged, if your house is built, you may have a completion date (move in date) however it is more likely that completion will be on notice. This means that once the property is built you will be required to complete within 10 working days. Your solicitor will explain this to you in detail.
Before you exchange, you’ll need to get buildings insurance as you’ll be responsible for your home once you’ve signed on the dotted line, however if you are purchasing a new build property you will not need to do this until completion.
Once you have exchanged your solicitor will send you an engrossed (official final copy) transfer or lease which you should sign and return. This is the document which will transfer the ownership of the property to you.
Shortly before completion your solicitor will provide you with a completion statement and any outstanding amount will need to be paid the day before completion to your solicitor. You must ensure that your solicitor has cleared the funds the day before, so be wary that a cheque can take a few days to clear.
The mortgage company will be requested to send the mortgage loan to your solicitors also, so that the full purchase price can be transferred to the seller’s solicitor on the day of completion.
Once the completion monies have been received by the developer’s or seller’s solicitors, you’ll be able to collect the keys and move in to your new home.
There are a few jobs for your solicitor to do after completion; they will send all the relevant documents to the Land Registry to register your ownership and the mortgage lenders charge over the property. Deeds are no longer physically held but electronically held. You will receive a copy of your registration to show that you own the property. Registration of a new build property can take some time; your solicitor will also pay stamp duty land tax if applicable.