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The ups and downs of buying a house


From the moment you first decide to move, the cost clock starts ticking. The whole process can be daunting - where exactly do you start?

That's why we've put together this three-part guide to make life a little easier for you.

The legal process explained and why you need a solicitor

What to expect both as a buyer and seller

Why you need a solicitor.

Once you've found the home you want you will need to appoint a solicitor or licensed conveyancer to handle the purchase for you.

Once you have appointed a solicitor for a sale

  • You must provide the original deeds, the Land Registry Certificate, of your property and any other relevant info such as service charges.
  • If you have a mortgage on the property you are selling these deeds will have been held as security by the lender.
  • The solicitor will ask the mortgage lender on your behalf how much is needed to settle your mortgage.
  • You will be sent a list of official questions to answer about your property which you must answer truthfully, as these form the basis of the draft contract. These tell your purchases about the boundaries, any changes made to the property, rights of way, special covenants and so forth which might affect it.
  • Your solicitor will then draw up the contracts for everything included in the sale including fixtures or fittings.
  • This will then be sent to the buyer's solicitor who carries further investigations.

Once you've appointed a solicitor for a purchase

  • The legal documents, the 'title deeds', of your new home will be checked.
  • An official search is carried out with the local authority to see if they have plans which affect your home's value.
  • The solicitor makes sure any items included in the purchase price are correctly itemised in the contract.

The solicitor will also

  • Make sure buildings insurance is in place at the time of Exchange of Contracts.
  • Draw up contracts and liaise with the vendor's solicitor.
  • Liaise with the lender (usually a bank or building society) who is required to register their interest in the property during the life of the mortgage. It is usual for the buyer's solicitor to deal with any related legal work.

What is an official search?

  • This is designed to find out anything which could affect the value of the property.
  • It could include plans for new roads.
  • The search also checks planning consents and which mains services are connected to the property.
  • The local authority charges for this.

Land Registry

  • Detailed plans of the exact location of a property and a record of ownership is filed with the Land Registry and each owner has a certified copy.
  • If there is a property, it also registers a lender's interest as mortgagee.
  • To ensure that the seller has made no changes to the rights affecting the property a final check will be made when you have exchange contracts.

Exchanging Contracts

  • You are contractually obliged to buy the property once contracts are exchanged.
  • Your solicitor holds your deposit which you pay at the time of exchange.
  • You will agree when the sale is to be completed and if this is not honoured then penalties can be imposed.
  • The contracts are only exchanged when your solicitor has received satisfactory replies to their questions.
  • Often your sale or purchase will be dependent on others buying and selling properties - and that is called a chain.
  • If this is the case the solicitors must coordinate transactions so that completion of your sale and purchase take place on the same day.

Insurance protection and why

  • Buildings Insurance.
    • Buildings insurance must be effective from the day of exchange of contracts.
    • If not, you could be jointly liable with the previous owners for any damage caused to the property after that date.
    • Once contracts are exchanged, you are expected to complete the purchase even if the property is damaged.
  • Life and mortgage payment protection cover
    • If the purchaser dies, life cover will pay for the sale, safeguarding dependents.
    • Make sure you also have protection for accident, sickness and unemployment from the point of exchange of contracts.
    • Enhanced cover - at a price - comes from income protection or critical illness insurance.

The transfer deed

  • This is the official record at the Land Registry that you are the new owner.
  • Your solicitor prepares the document before completion.

Completion

  • When the Transfer Deed is completed it is sent to the seller's solicitor.
  • The process of completion involves handing over;
    • Keys
    • Land Registry Certificate
    • Transfer Deed
  • our lender holds the documents, as security against the loan.
  • In return your solicitor is sent the 'mortgage' funds by the lender to pay for the sale.

Stamp Duty

  • The law requires that the Transfer Deed is officially stamped.
  • The Government imposes a tax - stamp duty - on all properties over £120,000.
  • This tax is paid by your solicitor and added to your bill.
  • The stamped deed is then sent to the Land Registry to confirm the new owner.
  • It also registers the lender's interest as the mortgagee.
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