This weeks blog post comes from Tara Kaby who has been working in property law for the past five years. Tara’s blog post details the ins and outs of purchasing your first property.
Disclaimer: please note this advice is based on an understanding of purchasing property in England. Circumstances may differ when purchasing property in other locations.
So, you have just had your offer accepted on your first property, now what do you do?
The legal process of purchasing a property can be really straightforward, if you know what to expect. This blog post aims to set out the steppingstones of that process so that you know what to expect when you purchase your first property.
The first step you should take once you have had your offer accepted, is to instruct a solicitor to act on your behalf. You can do this by approaching different firms for a quotation. Once you receive the quote, if you are happy with the costs, you will then confirm to that solicitor that you wish to instruct them.
Once instructed, the solicitor will open a file for you and send you instruction documents. Each firm is different, but in general you will receive an engagement letter setting out the work that will be done on your matter, the costs, how billings work and the complaints procedure, should you need it. You will also receive an instruction form, which likely contains questions about you and the property, and a copy of the firm’s Terms of Business.
You may also receive a Privacy Notice to sign. This is for marketing purposes and is basically an opt-out opportunity.
This will also be the time where you inform your solicitor of your lender’s details if you are getting a mortgage.
Once you have returned your instruction documents, you may be asked to pay some monies on account, this will generally go towards your property searches and AML (Anti-Money Laundering) search.
When you instruct your solicitor, they will ask you for a form of photographic ID and address ID. This is for the AML check – they need to know that you are who you say you are.
Your solicitor will receive a copy of the title register and title plan from the Seller’s Solicitors. They will then use the plan to put searches in hand. In general, the searches that are obtained are a Local Authority search, Environmental search, Water and Drainage and Chancel search. The solicitor may choose to report to you on the results of the searches by letter or email, or they may provide the search results for you to read through and to question anything you are unsure of.
Your solicitor will then receive a contract pack from the other side. This will contain a draft contract and draft Transfer deed (or Lease), Property Information and Fittings and Contents forms. This is also an opportunity for the Seller to provide any guarantees, warranties or certificates they may hold for the property, such as the electrical installation certificate or gas safety certificate.
The Solicitors will then discuss any amendments which they may require for the draft documents and have the opportunity to ask any enquiries. This is also the opportunity for you to ask any questions after reading the Property Information and Fittings and Contents forms.
Once the draft documents have been agreed they will be engrossed and sent out to you and the Seller for signatures. You will be asked to sign the contract, where indicated, to show that you agree to purchase the property under the terms contained within.
When signing the Transfer deed (or Lease), you will be required to have your signature witnessed. The witness must be over 18 years old and not related to you in anyway. They will be required to sign the Transfer deed beneath your signature, in the space provided for them.
You will also be sent a Stamp Duty Land Tax Return; this is what is submitted in order for you to pay Stamp Duty.
Exchange and completion
Once the solicitors on both sides are holding signed documents, discussions will begin for an exchange date.
On the date on exchange, the contacts will be dated and sent to the other side. A date will also be set for completion. You may be required to pay a deposit on the property at exchange, in general practice this is 10% of the purchase price.
Once a completion date has been set, the solicitor will also contact your lender to make them aware of the completion date so that they can arrange the funds.
In the days running up to the completion date, you will receive a completion statement from your solicitor which will detail the costs throughout your transaction and confirm the amount that you need to send to your solicitor in order to complete. Your lender will also aim to send over your mortgage funds for the day before completion, so that everything is in place and ready.
Once you have completed, the solicitor will call you to confirm completion and you can collect the keys from the estate agent (or whomever is holding the keys).
Once you have completed, the solicitors will submit your SDLT return and pay your Stamp Duty fees.
The solicitors will then proceed to send each other the original signed Transfer deeds, (or Leases) and your solicitor will submit an application to the Land Registry in order to register you as the new owners of the property.
Once the application has registered (which unfortunately can take some time) your solicitor will contact you with copies of the title register stating you as the new registered proprietor.
All that is left, is for you to enjoy your new home.
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