One of the most common reasons people use a solicitor is for help to buy or sell a property: here's why instructing a solicitor when you decide to buy or sell a home makes good sense.
Solicitors use the term 'conveyancing' to describe the process of transferring ownership of a property from one person to another. The process usually involves a number of parties, including solicitors or conveyancers for the buyer and the seller, estate agents and surveyors. A good conveyancing lawyer will ensure that all of these parties work well together so that you can concentrate on the practical aspects of moving home.
In this brief guide to residential conveyancing, we look at what the solicitors do, the main steps involved in the process and some of the key issues a buyer or seller needs to be aware of.
What are the stages in the process?
Once the price of the property being conveyed has been agreed, there are a number of steps your solicitor will go though:
Searches and Enquiries. The buyer’s solicitor sends out searches to the Local Authority and Water and Drainage Authority to make sure there are no hidden surprises. They also send enquiries to the seller’s solicitor to find out about things such as whether there are any ongoing disputes or restrictions on the property and to ascertain the boundaries, any planning permission issues and rights others might have over the property.
In certain parts of the country, additional searches may be necessary, such as obtaining flood reports, environmental reports and coal mining searches. Searches at the Land Registry confirm the current ownership of the property and any restrictions that might exist or registered legal rights over the property.
Replies to enquiries. After receiving replies to enquiries, the buyer’s solicitor may have follow-up questions to ask. If a survey is being carried out, the buyer and their solicitor should make sure they are happy with the information contained in the report: once 'exchange of contracts' has taken place, there is a commitment to buy and sell. It is difficult and can be expensive for either the buyer or seller to back out.
Arranging the mortgage. The mortgage deed will need to be finalised and signed before the buyer's contract is signed. The mortgage company will want to make sure that the searches and enquiries do not reveal anything problematic.
Exchanging contracts. When the availability of the finance necessary to purchase the property and pay the necessary costs (such as stamp duty) has been confirmed, the signing of the contract and payment of the deposit can take place. The seller’s solicitor prepares the contract of sale which may need to be negotiated with the buyer’s solicitors. It is normal practice to transfer 10 per cent of the agreed price as a deposit when you exchange contracts.
When exchanging, you commit yourself to a definite date for 'completion', which is when the ownership of the property passes from seller to buyer. The buyer’s solicitor will also prepare a transfer document and send it to the seller to be agreed.
Pre-completion. Before completion can take place, the buyer’s solicitor must ensure that they have received sufficient money from their client to pay the balance of the purchase price. This includes arranging for the remainder of the mortgage funds to be sent to the firm's client account. They will also carry out final Land Registry or Land Charges Registry searches to make sure nothing new has popped up.
Completion. On the day of completion, the buyer’s solicitor will send the completion funds to the seller’s solicitor. Once the seller’s solicitor confirms receipt of the money, you will normally be able to get the keys to your new home.
Post-completion. Although the buyer can now start to settle in to their new home, there is still work to do. The solicitor will ensure that any existing mortgages on the property are paid off and removed from the title records held at the Land Registry. The buyer’s solicitor will still need to complete the Stamp Duty Land Tax form and register the change of ownership at the Land Registry.
A solicitor has the specialist training to carry out all this work expertly and efficiently.
FAQs
What are searches and why do I need them done?
If you were buying a second-hand car, you’d probably want to have your mechanic have a good look at it to make sure everything was sound. When you buy a house, searches and enquiries help to flush out any potential risks. For example, if your proposed new home was low-lying, you would want to know if is at risk of flooding. Your solicitor can carry out a flood risk search to help you make an informed decision about the property.
When should I instruct a solicitor?
If you are buying a property, you can either instruct a solicitor before finding a suitable property to buy, or after agreeing a price with the seller. If you are selling a property, you may wish to instruct a solicitor as soon as your home is on the market, or you can wait until you have agreed a price with a buyer. The earlier you instruct, the quicker the completion process is likely to be as the solicitor is required by law to obtain appropriate identification documents from you and will need to formalise their instructions from you. If you have a fixed fee arrangement, early instruction will also not cost you anything extra.