A Guide to the house selling procedure
Moving home is regarded as one of the most stressful times in anybody’s life but it doesn’t need to be. Here we explain what you need to know and expect and should hopefully relieve some of the stress you may feel at this critical time in your life.
We have teamed up local solicitors to give you an outline of the conveyancing procedure so that you understand what is expected to happen step by step.
The memorandum of sale
Once the sale has been agreed, we, The Estate Agent, will start the process by preparing the memorandum of sale which introduces the solicitors to each other and provides all of the details of what has been agreed.
The draft contract
After the seller’s solicitors receive the memorandum of sale they will then prepare a draft contract. If you are holding any original deeds, such as the lease, you will be asked to furnish them at this juncture. The seller's solicitors will then send this draft contract along with relevant title documentation to the buyer's solicitors. The seller's solicitors will ask their client to complete some forms from the beginning of the transaction including a property information form and a fittings and contents form. These forms are then sent to the buyer’s solicitors along with the draft contract and provide the buyer with relevant information about the property such as who is responsible for the maintenance such as boundaries and fences etc. Also if the property has been altered by the seller in any way. Also if there have been any disputes with neighbours. The fittings and contents form is an inventory of what items are being left at the property on completion of the sale. With flat sales an additional form, called the leasehold information form, has to be completed to deal with matters as insurance and maintenance of the building. For larger blocks the management company will provide a management pack which gives exact information on how the service charge is being spent and what major works are expected over the forthcoming years.
Approval of the draft contract.
This is the task of the buyer's solicitors. They will check the draft and amend anything which they consider to be necessary and then return this to the seller’s solicitors to agree to the changes and forward a fresh copy for signature.
At this juncture the buyer's solicitors will also raise any enquiries that their client or they may have about the property and the seller’s solicitors will likely take further instructions from their client. This is the point where the estate agent can ease the process. The transaction could possibly slow down at this stage if the property is Leasehold because the seller’s solicitors has to enquire with the block’s management company to obtain the answers to his questions. The management company does not have quite the same sense of urgency as the buyer and seller so we do our utmost to help get anything answered by utilising diplomacy and persuasion!
The local search.
This is performed by the buyer's solicitors upon receiving the contract documents. This is a search carried out with the local authority for the area in which the property is located. It reveals details of such topics as…
Improvement grants which may have to be repaid . Planning permissions on the property.. Road schemes in the immediate area..Also any such matters as compulsory purchase orders and notices under the Public Heath Act. The average turnaround period for a local search is usually around two weeks. The search lasts for a period of three months from the date of issue. As a result some buyers will not apply for a search until they are positive that they are going ahead, which can be after they have received their survey result.
The mortgage offer
Unless the buyer is purchasing the property completely with their own funds then the buyer’s solicitors will wish to ensure that the buyer has a mortgage offer prior to exchanging of contracts. Even if you think that securing a mortgage may not be a problem, the application process can take time so you really need to source a mortgage before you agree to the sale.
Once your lender has approved your mortgage application they will instruct the valuation survey and once the lender has received the surveyor’s report a mortgage offer will be issued.
Exchange of contracts
• When all the terms have been agreed by both sides
• You have agreed the date that the sale will be completed
• Any Additional enquiries answered
• A mortgage offer received
• Also a satisfactory local authority search has been obtained…
You are almost ready to exchange contracts. Your solicitors will send to you the contract for signature and return The Buyers Solicitor will send the buyer their part of the contract to sign and return together with their deposit. They will also make sure that the buyers have no further additional enquiries which they wish to raise. Exchange of contracts takes place over the phone with the Solicitors. The solicitors for the buyer and the seller complete the necessary details in their relevant parts of the contract including the completion date and they are "exchanged". The buyer's solicitors will then send the buyer's signed contract and deposit to the seller's solicitors and the seller's solicitors sends his part of the contract to the buyer's solicitors.
From the point of exchange of contracts the deal is now binding and if either one of the parties decides to back out they will incur penalties. The completion date is a mutually agreeable date agreed between the seller and the buyer. It can be within a few days of exchange or longer if needed. The buyer must ensure that all funds are available prior to the completion date as late completion will likely attract financial penalties.
After contracts are exchanged, the buyer's solicitor will carry out a search at the Land Registry to check, for example, that no additional mortgages or other onerous matters have been entered on the title to the property since the "office copy entries" were issued. With unregistered land a similar type of search is carried out with the Land Charges Registry.
At this point the contract which has been exchanged is formally "completed". The buyer's solicitor sends the balance required to complete to the seller's solicitors by electronic bank transfer.
Once this is received by the sellers solicitors the keys to the property are now released to the buyer. All the buyer has to do now is move in!
After completion, the buyer’s solicitors will deal with registering the purchased property into the buyer’s name with the Land Registry. The buyer will then be sent an up to date copy of the register showing them as the new owner once registration has been completed. The buyer also has to pay their stamp duty land tax which is sent to HMRC with a transfer of ownership form.
I hope that this has helped in some way !