As the property market shifts back into gear, many will be considering moving home.
However, during the conveyancing stage, where the ownership of land and property is officially transferred, the process can quickly become confusing, and, if not handled correctly, can cause serious delays.
To help homebuyers through the process of purchasing a house, experts at The University of Law share five things you need to know when buying a house, through the eyes of the solicitor.
Understand the process
The two main landmarks of a house purchase are the exchange of contracts between buyer and seller, and the completion when the buyer picks up the keys. However, steps need to be taken prior to the exchange of contracts, as well as after completion.
Firstly, your solicitor will draw up the contracts marking out the terms of the purchase. They will then carry out all the necessary diligent searches on the property and facilitate the agreement of a completion date prior to exchanging contracts.
On the day of completion, the conveyancer will then handle the exchange of funds to the seller so the process can be completed. They will also pay any Land Transaction Tax or Stamp Duty required to register the new ownership with the land registry.
Becoming legally bound to proceed
Until contracts are exchanged, the buyer is entitled to change their mind and pull out of the purchase with no ramifications. However, once the solicitor has drawn up the contracts and a completion date is agreed with the seller, you must then sign the contract and pay your deposit (usually 10% of the value of the property). At this point, you have entered into a legally binding agreement and are now obligated to complete the transaction.
If you exchange contracts and then decide to pull out of the purchase agreement, you will lose your entire deposit and could be sued for breaking your contract.
Timescales and expected delays
Due to the complex nature of the transaction, legal experts advise that the conveyancing process, from start to finish, takes around 8-12 weeks. However, it varies from case to case, depending on how complex the transaction is and whether you are part of a longer chain of buyers and sellers.
If, for example, you are waiting for another party in the chain to sell their property, the process can be delayed. Delays are often inevitable and should not be a cause for concern; your solicitor should remain in consistent communication with you to keep you up to speed with any issues.
A breakdown of the costs and unknown fees
Typically, conveyancing legal fees cost between £850-1,500, but this is dependent on the value of the property and can increase depending on the number of third party disbursements required.
Local authority checks and individual anti-money laundering checks are a necessity in most instances to protect the customer. Additional admin fees, such as Land Registry searches, also have to be factored in, as well as charges for monetary transactions and ID checks.
A solicitor should always give you a quote upfront breaking down the costs for each service, which will only change if additional checks need to be done upon conducting the initial searches.
Paying for the service
The process of paying your legal conveyancing fees varies from firm to firm. Often you will be asked to pay a deposit when you agree to use a solicitor’s services, which is usually 10% of the agreed fee. You then pay the rest on completion of the purchase of the property.
However, if additional searches do crop up throughout the process, the conveyancer may ask for payment of that immediately to be able to move things forward.
Alex Morrice, senior tutor at ULaw, concludes: “With the UK housing market now starting to recover and more people looking to purchase their next or even first house, it is important to make what can be a long, complex and often stressful process as concise and easy to understand as possible.
“The first step should be doing the research to give yourself even a very basic understanding of the legalities of each stage of the conveyancing process. Arming yourself with this knowledge will help to stop the paperwork and legal processes from being such a daunting prospect for those either looking to make the move to a new home or get their first foot on the property ladder.”