‘Conveyancing‘ is the term used in the UK to describe the process of transferring title deeds for real estate from the seller to the buyer. The process starts as soon as the seller accepts an offer from the buyer. If you are wise, you will engage the services of a solicitor (lawyer) or licensed conveyancer to handle the process for you. Technically, you could do your own conveyancing, but this is not recommended.
There are three principal stages in purchasing real estate in the UK. These are:
• verbal agreement between buyer and seller
• exchange of contracts
The initial agreement between buyer and seller is not legally binding, and either party can pull out of the agreement without penalty. For example, if you come across a property in Southport, Lancashire from EntwistleGreen.co.uk, you could place an offer immediately, even without viewing the property.
When contracts are exchanged, there is now a binding agreement, and a completion date will be set. The buyer will usually be required to pay a deposit of 10% of the purchase price, which will be held by the seller’s conveyancer. If the buyer pulls out, he or she will normally lose that deposit. If the seller pulls out, his or her conveyancer will return the deposit to the buyer, but the seller is not liable for any other penalty.
What your conveyancer will do
The conveyancer will request the contract documents from the seller’s conveyancer. The contract documents contain details of the property to be sold. These will include the agreed price, and what fixtures and fittings are included in the sale. Fixtures and fittings cover things like carpets and kitchen units. Fixed items like these are almost always included in real estate sales in the UK.
Your conveyancer will additionally carry out a number of legal searches related to the transaction. The first of these will be to ensure that the seller is actually the legal owner of the property and is entitled to sell it. Your conveyancer will check with the local authorities to see if there are any development plans that could impact on your proposed purchase in the future. The conveyancer will check that all property taxes are up to date. If not, the contract will be amended to ensure that the seller pays all outstanding debts, usually from the proceeds of the sale on completion date.
If the searches reveal any potential problems, such as plans to build a main road nearby, flooding issues, or problems with subsidence due to former mining activities, your conveyancer will inform you so that you have the option to withdraw before contracts are exchanged. Assuming you are happy to go ahead, contracts will be exchanged and your conveyancer will register your legal interest in the property.
If you need to get a mortgage to help you make the purchase, the mortgage company will insist that you use a licensed conveyancer or a solicitor to act on your behalf. You should ensure you have mortgage approval on your chosen property before you exchange contracts. Your mortgage company will insist on a property valuation before offering a loan. You will normally have to pay for this.
The mortgage company will send an independent valuer to view the property you want to buy. He or she will put a valuation on the property. If that valuation is significantly lower than what you have agreed to pay, your loan application will be declined. While this can be frustrating, it actually protects you from paying too much for your chosen property.
Your mortgage approval will be subject to some conditions. One of these is that you must take out buildings insurance so that you are covered from the moment the property transfers to your name.
Your conveyancer will send you an itemized breakdown of all the monies needed to complete, and you must ensure that those funds are in the conveyancer’s account before the completion date. The mortgage company will release funds directly to the conveyancer. Once the seller’s conveyancer has received the funds, the property is yours and you are handed the keys.
While the process is somewhat complicated, licensed conveyancers do this type of work all the time, so you can take a back seat for most of the process. Your conveyancer will handle negotiations with the seller’s conveyancer. He or she will forward documents that you need to sign, and, apart from ensuring that you will have the necessary finances in place to complete, that is really all you have to do.
Evie Gardiner has worked closely with property developers as a conveyancer. She enjoys sharing her industry insights online and her articles mainly appear on personal finance and property blogs.