You've found your dream home, and had your offer accepted, what happens next? As purchasing a house is likely to be the biggest investment you'll ever make, it is important to ensure that the right legal processes are followed in order that you can move in at the earliest opportunity and with as little problems as possible.
1. Preliminary Matters
Once you have instructed a solicitor to act on your behalf, Law Society and Governmental obligations mean that there are certain identity procedures that must be followed before your legal advisor can start work on your transaction. Therefore please do not be offended as your solicitor will ask you to provide proof of your identity to their office. Normally production of your original (and in date) passport, driving license and at least one utility bill or bank statement dated within the last three months showing you current residential address should suffice. Further documentation may be required depending on instructions received by the solicitor from your mortgage provider (if indeed you are obtaining mortgage finance in order to purchase).
2. Initial Paperwork
At the beginning of the purchase transaction the main focus is to ensure that all parties involved in the matter are aware of one anthers involvement. This is normally covered by the production of the selling Estate Agents Memorandum of Sale. This shows all parties names, addresses and contact numbers (including Buyer, Seller and their personal legal representatives). If no estate agent is involved then it is best to obtain this information directly from the Seller to pass to your solicitor.
Once all contact details are finalised the Seller's solicitor should provide a contract package to your legal advisor for consideration.
The documentation contained within such contract package is as follows - draft contract for approval (normally in duplicate), HM Land Registry entries and official plan of the Title for the property concerned and Property Information Form and Fittings and Contents Form completed by the Sellers.
For properties held on a Leasehold tenure then additional documentation by way of copy Lease, Leasehold Information Form and Management Company details (for the communal areas of the estate) should also be produced.
In some circumstances a Home Information Pack (HIP) may be available for review by your solicitor. If that is the case then the Seller's Estate Agent or legal advisor should pass this directly to them. You may have even been provided with a copy of this document yourself.
3. Investigation of Title
It is then down to your solicitor to start to raise technical inquiries concerning the title and physical state of the property you are hoping to buy to the Seller's solicitor on your behalf. Many of the inquiries raised are so technical in nature that for your solicitor to properly explain them you would require a lengthy history lesson in Property Law. Therefore please do not be concerned if you solicitor states that inquiries have been made - without specifically listing them to you.
At this stage additional inquiries should also be made to the Local, Drainage, Environmental and Chancel Check authorities. Again your solicitor will make all such applications on your behalf. The fees for such searches should be provided to your legal advisor once you are satisfied you are willing to proceed. This is normally after receiving a satisfactory survey or confirmation that mortgage funding can be achieved. Please be aware that the searches fees cannot be retrieved once applied for. Therefore, if you decide to withdraw from the purchase transaction at this stage your search fees will be lost. From the results of such searches, your solicitor may be required to make further inquiries of the Seller's legal advisors to obtain information or documentation relevant to the property (such as planning consents for extension and alterations).
It is important to recognise that the above process is absolutely necessary to ensure that there are no underlying problems that would prevent the purchase of your property. If any problems are discovered (which sometimes cannot be resolved,) your solicitor may advise you to withdraw your offer to buy. However, this is a last resort. Every effort is made to clear any potential problems before you proceed to complete.
It should be the motto of any property solicitor that a home is bought to be sold. If all necessary enquires are made before you are the legal owner (and providing you do not create any potential problems during your ownership) the sale of the same property should be relatively straightforward.
4. Mortgage Offer
During the above process your offer of mortgage may be produced by your lender. A copy will be sent to your home address and a duplicate will be provided to your solicitor. The latter will also enclose specialised documentation in order for your legal representative to request mortgage funds, secure your agreement to the mortgage and to provide documentation back to the lenders offices once registration of the property has been completed at HM Land Registry.
Your offer of mortgage may also enclose a valuation / surveyors report. If not, you may have instructed your own independent report through a surveyors office. In either case it is advisable for you to provide this report to your solicitor. Although they will not be able to provide you with a professional opinion on the reports, it may help them in identifying further issues for investigation with either the Estate Agents or the Seller's Solicitors.
5. Signing the Contract
Once all inquiries have been answered, all searches and financial arrangements are in place, your solicitor will invite you to attend their office with a view to signing contract documentation. The appointment will cover the solicitors full investigation of title, reference to any technical inquiries posed to the Seller's solicitors, the search results and mortgage offer (if applicable).
If you are happy to proceed with the transaction, you may sign the contract. At this stage the agreement is not binding.
If you are buying jointly with your partner or others, consideration should also be given at this stage as to how the property should be held between you. There are two options in English Law - Joint Tenants and Tenants in Common. Your legal advisor will guide you as to which option will suit your current circumstances.
6. Exchange of Contracts
When all parties in the chain are ready to proceed to exchange your solicitor will ask you to agree / propose a date for completion. This will be the date when you get to move in to your new house. The date is finalised by negotiation will all other buyer's and seller's involved in the chain.
You should then provide your deposit to your solicitor (in situations where you have a related sale it is common for the deposit offered on this transaction to be used on your onward purchase).
You solicitor will then finalise exchange of contracts with the Seller's solicitors on your behalf. Now you are in a legally binding contract to purchase the property.
7. Preparing for Completion
Once you know the completion day, you can begin to book removal firms, inform utility companies and other interest parties of your change of address.
8. Completion Day
On completion day, your solicitor will forward the full amount of the purchase price to the Seller's solicitors by way of bank transfer. Once received, you have completed the transaction and you will be the proud owner of your new home!
Your solicitor will ring to advise when all matters are finalised and when you are able to collect the keys to your house.
9. Post Completion
Once completion has taken place, your solicitor will pay the necessary Stamp Duty Land Tax to HM Revenue and Customs and will inform HM Land Registry of the change in ownership. When registration has been completed, the Land Registry will produce a formal copy of your title showing your details as the registered proprietor (and if applicable, give brief details of your mortgage provider). Your solicitor will forward a copy of the update title to you for your future reference.
Buying a home can be stressful, especially if you are also selling at the same time. Knowing the steps in the legal process will help you to understand what's required in an effort to reduce the strain for you and your family.
Find out more about Buying a House with Residential Conveyancing experts, Lees Solicitors.
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