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We will guide you through the legal
complexity that goes with buying or selling your home.
We offer you independent advice in connection with surveys,
valuations, mortgages, deposits, life assurance, estate agents
and a number of other features, all of which you will need
to be aware of.
We will explain to you, in plain English the steps involved,
from the initial stages through to completion when you can
move into your new home.
If after the transactions have been completed you need further
advice with regard to your obligations under any covenants
which may affect the property, building insurance, boundary
rights and so on, we will always be available to assist you.
Let us assume
you have found the house you wish to buy. You will
now be negotiating terms for the purchase and unless
you are a first time buyer you will also negotiate
terms for the sale of your present home.
The important thing to remember when putting
anything in writing is to include the phrase "Subject
to Contract". |
Having agreed
terms of purchase "Subject to Contract"
the seller will sometimes require you to pay a preliminary
deposit to his Agent. This is more usual when you
are buying a brand new house.
The deposit paid on exchange of contracts and any
preliminary deposit paid by you will be credited
towards payment of the purchase money on completion.
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| Now the Seller's
Solicitor prepares the contract package for the
Buyer's Solicitor. For this purpose he will need
to obtain the Title Deeds to the property which
are normally held by the Building Society, Insurance
Company or Bank as security against the Mortgage.
We will also ask you to complete a simple property
information questionnaire for the benefit of the
Buyer letting him or her know, for example, which
boundary fences you maintain. We will need to
know about second and subsequent mortgages at this
stage. |
Anything that
is fixed permanently to the house or land, such
as baths and built in cupboards, is normally sold
as part of the property. However, the seller may
wish to remove certain fixtures and fittings. The
Seller and Buyer should both know exactly what items
are being included with the property before the
Contracts are exchanged.
Also if a separate price can be fixed for furniture,
carpets, fittings etc, it may be possible for us
to reduce slightly the amount of Government Stamp
Duty a Buyer has to pay.
We would recommend that a list is made of ALL items
attached to the property which are excluded from
the sale.
If you are selling we will ask you to complete a
simple Fixtures & Fittings List. If you are
buying we will obtain a list from your Seller's
Solicitor. |
| The Buyer's
Solicitor then carries out the necessary Search
Enquiries. These are enquiry forms sent to the Local
Authority. This information however will only relate
to the specific property being purchased, and not
any neighbouring land. So if you are worried about
possible developments, drains, new roads, boundaries,
rights of way, restrictions; schools or even the
presence at one time of mining in the area, please
let us know as soon as possible. We can then make
special enquiries.` |
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Do not rely on the Building Society Valuation.
The Building Society only inspects the property
to see if the valuation is justified before the
loan (Mortgage) is granted. The basic survey is
not a full structural survey.
Legally the Seller is not bound to give any guarantees
as to the condition of the property, and the Buyer
purchases it as seen. We would strongly recommend
a structural survey or a House Buyers Report by
a qualified Surveyor, and if your surveyor finds
work that needs doing it may be possible to negotiate
a lower price with the Seller in order to cover
the cost of that work.
Woodworm, Rot and Damp
In older properties, a specific survey is sometimes
advisable. Most firms that specialise in these
problems will conduct a survey free, or for a
nominal charge.
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| By now you will
have received written confirmation of your Mortgage
Advance from the Building Society, Bank or Insurance
Company. If for any reason you have not arranged
a mortgage, we can also help you to do so. But please
let us know well in advance of Exchange of Contracts. |
Until now nothing
is binding. All you have is a Gentleman's Agreement.
The Seller can still sell his house to somebody
else. This usually happens for one of two reasons.
He may have received a higher offer from another
buyer.
Alternatively, he may have issued more than one
contract and is waiting to see who will exchange
first. In this case we ought to have been warned
by the Seller's Solicitors of the existence of another
buyer. However, Sellers beware: a recent Court of
Appeal decision went in favour of an intending Buyer
who was "Gazumped" and the Seller had
to pay damages and costs. You may also be involved
in a chain in which nobody wants to exchange contracts
on the house they are buying before they exchange
on the one they are selling.
Both parties are legally bound only when the Contracts
are formally exchanged and a Completion Date is
agreed. This will not only take place with your
specific instructions to do so. As soon as exchange
takes place we will let you know and confirm the
completion date. |
| When the Contracts
are exchanged the deposit, which can be as much
as 10% of the selling price, is payable to the Seller's
Solicitor. If you are selling at the same time your
bank may advance sufficient money to cover this
provided there is an agreement to repay the loan
out of the sale proceeds. Alternatively, we may
be able to persuade the Seller to accept the deposit
from your related sale without you needing to add
to it. |
| Most of the
procedures for house-buying also apply to flats.
There is, however, one important difference. With
a flat you will be buying a lease. Leases tend to
be very complicated and cover such things as, maintenance,
cleaning, repairs, ground rents, gardens, roofs,
car parking, foundations, insurance's, neighbours,
service charges and pets. Where a lease is involved
our practice is to see you early on in the transaction
to go through the terms of the lease. |
Generally, completion
takes place between two and four weeks after Exchange
of the Contracts.
In that period of time the Seller's and Buyer's
Solicitors agree the form of the final Transfer
document; prepare any Mortgage Deed necessary; make
further searches; report to the lending source and
obtain a mortgage advance; prepare a Completion
Statement and arrange for all documents to be signed
by the client. On the day of completion the Buyer's
Solicitor transfers to the Seller's Solicitor the
balance of purchase money by way of a Bank Telegraphic
Transfer and arranges for the keys to be made available
to the Buyer usually at the Agents office. |
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(a) Buildings Insurance
This normally becomes the Buyer's responsibility
from the Exchange of Contracts. Usually the Building
Society, Bank or Insurance Company granting a
mortgage will arrange the insurance for you. If
you are buying a Leasehold property it is likely
that the Landlord will insure and that you will
pay the insurance premium to him rather than to
an insurance company.
(b) Mortgage Protection
If you are obtaining an endowment mortgage the
mortgage should be paid off in the event of your
death. If you are having a repayment mortgage
we strongly recommend that you take out a Mortgage
Protection Insurance which should pay off the
Mortgage in the event of your death. Both these
options mean that your family would not have to
sell the house and move if they were unable to
meet the mortgage payments.
For added protection it is sometimes possible
to obtain insurance to meet the Mortgage payments
in the event of you losing income through ill
health, accident or redundancy. We may be able
to help you arrange this type of insurance.
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| If you are selling
Leasehold property, eg a flat or maisonette, the
latest receipt for ground rent and any service charges
must be provided to the Buyer's Solicitor at Completion.
Therefore, we would need to receive this information
after Exchange of Contracts so that the necessary
apportionment can be made. |
| This means paying
off any Mortgages on the property you are selling.
If you are a first time buyer this will not apply.
We will arrange for the Mortgage to be discharged,
any Life Policies to be reassigned and the fire
insurance cancelled. |
The Solicitors
have only now tied up the legal and financial transaction.
We will have already ensured that the necessary
funds are available at completion, either from the
proceeds of your present house sale, from the Mortgage
Advance, or a combination of the two. If additional
funds are required, you will have been notified
whenever possible at least five days before completion.
The cheque for this additional amount will be required
by us at least three working days before Completion
so that it can be cleared.
The Solicitor's Accounts Rules make this necessary. |
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Vacant possession is given when the keys are
handed over and the house is empty. This can sometimes
cause hold-ups if there is a 'chain' of Completions
because nobody will hand the keys to the Buyer
until the money has been paid in full. Also the
Buyer can demand that his money is not handed
over until he has the keys. This is where TRUST
comes in.
Should a situation like this arise we would probably
arrange for the keys to be lodged with the Estate
Agent. Then we would confirm that the money has
been paid so that the keys could be released.
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On completion we account
to you for any monies due to you and these monies
can be sent directly to your bank if you so instruct.
We also submit the TRANSFER DOCUMENT for
stamping, pay any Stamp Duty required, deal with
the Life Insurance and registration of the TITLE
DEEDS at H.M. Land Registry.
When the registration is complete, the Deeds will
be sent to your Building Society, Bank or Insurance
Company. If you are fortunate enough not to need
a Mortgage, we will gladly store your Deeds for
you at no extra cost.
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| The Stamp Duty
and Land Registry fees are worked out on established
scales. We shall advise of these expenses when you
first ask us to act on your behalf. |
Costs are our
fees. Disbursements are monies which we pay on your
behalf, such as Stamp Duty, Land Registry and Local
Authority Search Fees.
If there is a balance payable to you on completion
we shall notify you as early as possible of our
costs and disbursements before completion so that
you will have sufficient time to bring into the
office the balance required at least three working
days prior to the date of completion.
If the Mortgage Advance and/or proceeds of sale
are financing the purchase completely, then our
costs and disbursements will usually be deducted
on Completion and a statement provided. |
If you own a
large van yourself or if you don't mind making lots
of journeys in your car you may prefer to avoid
paying a Removal Firm to move your furniture for
you. However, don't forget that reputable removal
companies are insured for damages and breakage's,
a point well worth considering.
There is also the structural survey (see section
6).
We suggest that before engaging either of these
services you obtain estimates. |
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Most of what you have read so far is handled
by us. There are, however, certain things we leave
to you so that you don't feel completely left
out. These are:
- Cancel or Transfer your Contents Insurance.
- Arrange for the continuation or disconnection
of Gas, Electricity, Water and Telephone Services.
Have the meters read and arrange for the accounts
to be transferred to the name of the owner.
- Cancel your Buildings Insurance if you have
no mortgage.
- Make arrangements with the Removals Company
by giving them a provisional date until Completion
Date is finally fixed.
- Cancel the Bankers Order for the previous
Mortgage installments as soon as possible after
the Exchange of Contracts.
- Notify the Local Authorities of your move
and where necessary seek to obtain an apportioned
refund or demand in respect of Council Tax.
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This is only meant to be a simplified guide to
the Conveyancing process.
Nevertheless, we hope it enables you to understand
what is happening and takes away some of the stress
that goes with moving house.
Sometimes we need to discuss things like planning
permission, Inheritance Tax, Statutory Tenants,
Capital Gains Tax, mistakes in documents, road
developments, joint purchases, other claims on
the Title, restrictive Covenants, rights of way
or even tree roots.
Whatever the situation we will be in close contact
with you throughout the transaction.
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