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If you are a first-time buyer, you might be wondering why you need a solicitor and what the word ‘conveyancing’ means. Conveyancing is the legal process of transferring a property from one person to another. It involves several formalities which protect both the buyer and seller.

So, what is conveyancing? A Conveyancer is a solicitor who deals with the legal transfer of property from one person to another. Both buyer and seller will instruct a solicitor to act on their behalf. On the buyer’s side, checks will be carried out to make the buyer aware of any problems which may arise from the purchase. The solicitor also files the correct paperwork to ensure the purchase is recognised in law.

Searches

The first thing a conveyancer will do is complete the searches on the subject property. Searches are essential to provide valuable information about the property which may affect the decision to buy.  Searches include:

Local authority search (LAS): Information on road schemes, contaminations, or planned works.

Planning search: This will show existing planning consents or planning applications within a 250-metre radius of the property.

Drainage and water search: This will show where all the drainage systems are around the property, and if the property is at risk.

Environmental search: This will give information on flood risks, subsidence risks, and previous use of land.

Flood risk search: This will assess the risk of flooding in the area.

Coal mining and mining searches: Old mining tunnels beneath or near a property can cause a risk of subsidence. This search shows any current or historic mines in the area.

Chancel repair search: Some houses have an inherent liability to their local church for repair. This search checks if that liability exists and how much it will be.

Land registry pre-completion search: This search will reveal if the individual selling the property is the legitimate owner of the property and if any bankruptcy has taken place. It ensures that the property is legally safe to buy.

HS2: To check if the property is affected in any way by the high-speed railway plans.

Contracts

When you instruct a conveyancer to act on your behalf, they will write to the seller’s solicitor to request the contract pack which includes the draft contract and supporting documentation about the property. It is the conveyancer’s job to examine the contract and documents and raise any queries with the seller’s solicitor. Your solicitor will send you these documents to look over and may raise any significant issues with you.

At this point, it is essential to check the tenure of the property. The tenure refers to whether the property is freehold or leasehold. If it is leasehold, it is advised you discuss the terms of the lease with your solicitor and enquire if it’s possible to buy the freehold. You should also check the amount of time left on the lease and if it can be renewed easily and for a reasonable price. The tenure of a property is a critical issue you must take seriously to protect yourself from unexpected costs. If the property is freehold, then there is nothing to worry about, you will be buying the house and the land it sits on, so there is no other party involved.

Finance and your mortgage

As part of the conveyancing process, your solicitor will check that you have the financial backing to buy the property. You will be asked to provide a bank statement to prove you have the money to pay the deposit. They may also check your mortgage agreement to ensure the funds are available when you need to complete the transaction.

Your lender will often instruct a valuation surveyor to check that the property is mortgageable against their pre-requisites. This survey is to verify that the property value is sufficient security for the loan given and is NOT for your benefit. Read our article on why a mortgage valuation is not adequate to protect your interests and why you should instruct an independent surveyor.

Before you exchange contracts your lender will request that you have building insurance in place. After contracts have been exchanged, the property will technically belong to yourself; therefore, you are at risk if any damage happens at this point. You can get building insurance for the most accurate level of cover by asking a surveyor to calculate a reinstatement figure, which gives the insurance company an idea of how much the building would cost to rebuild.

Exchanging contracts

Exchanging contracts is an integral part of the conveyancing process as this is the point in which both parties are committed to the purchase. Exchanging contracts involves your solicitor and the seller’s solicitor, ensuring both part’s signed contracts are precisely the same and then ‘exchanging’ them.

At this point, you are legally obligated to purchase the property, and if you back out, you will lose the deposit you have paid. Likewise, the seller is also legally bound to sell the property to you. If they don’t, you may be able to sue them

Because both parties are now legally obligated to the transaction, this means you are in the safe zone and no longer need to worry about the risk of being Gazumped.

Completion

After the exchange of contracts, there are just a few more loose ends to tie up to complete the residential conveyancing process. This includes drawing down any remaining monies (usually the balance of your mortgage) to pay for the property. The solicitor will also order the deeds to be transferred by lodging an application to HM land registry.

After this, you are usually ready to complete. Completion involves your solicitor releasing payment to the seller, releasing the keys to you and filing the legal documents. At this point, the property is legally yours.

If you need help on conveyancing or any of the processes involved in buying a property, you should give us a call on 01744 412700.

 

Disclaimer

The material contained in this article is intended for information purposes only and not as advice. We take no responsibility for the result of any actions you take as a result of reading this information.

You should always obtain professional legal or other advice if you are unsure about the effect on you of any matter in this article.

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