We explain the process of buying a home for a first time buyerFebruary 8, 2018
Jane Gawn, Partner and head of our Property Department, explains the process of buying a home for a first time buyer and the costs involved, what searches are needed and why.
The conveyancing process can be summarised as follows.
- A buyer makes an offer to a seller which he accepts but there is no legally binding contract at this stage.
- A sale contract is prepared by the seller’s Solicitors and sent to the buyer’s Solicitors who check this and the title to the property and make all necessary enquiries and investigations before approving it
- The Buyer’s solicitor sends the buyer the contract to sign and requests a deposit, usually 10% of the purchase price
- The Buyer must ensure all finance including mortgage finance is in place and signs, returns the contract to the Buyer’s Solicitor and lets his Solicitor have the deposit.
- Once both Seller and Buyer have signed their contracts – each have an identical copy – exchange of contracts takes place and at this stage a completion date is agreed. Exchange of contracts means a legally binding contract is in place and neither side can withdraw
- The Buyer’s Solicitor carries out pre-completion searches to ensure there are no changes to the title and requests mortgage monies if the Buyer requires a mortgage
- By the date of completion all funds should be in place, including mortgage monies requested by the buyer’s Solicitors, All monies must be received by the seller’s Solicitors before completion takes place. At this stage the keys are released to the Buyer who can move in.
- Following completion the buyer’s purchase along with any Mortgage of the property are registered at the Land Registry and a copy of the title showing these entries are sent to the buyer,
Searches are made before exchange of contracts by the buyer’s solicitors and vary according to where the property is. Searches made for most properties are
- the local search The local search raises enquiries with the local authority on a variety of matters including planning and building regulation consents, whether roads are publicly maintained and whether public rights of way cross the property
- the drainage search provides information such as the location of the nearest public water pipes and drains, whether connected to those services and where the water meter is (If there is one)
- the environment search. The local search raises enquiries with the local authority on a variety of matters including planning and building regulation consents, whether roads are publicly maintained and whether public rights of way cross the property. Environment searches include assessment of risk for contaminated land, questions on flooding and consents for private drainage systems.
- A planning search asks questions about planning consents obtained for the property and in the general area
- Pre-completion searches disclose any changes to the title since exchange of contracts and also bankruptcy searches against the Buyer if he is obtaining mortgage finance
Searches are made according to the type and location of property, eg, mining searches would be required for certain properties in Cornwall or Wales.
Searches immediately before completion include a search checking for any changes in the title and if the buyer is obtaining a mortgage a bankruptcy search against his name.
Cost vary according to the type and location of the property and whether freehold and leasehold. Leasehold properties mean higher legal and other costs as it is often necessary to pay third parties fees as well as refund the seller for service charge he has paid beyond the date fixed for completion. The buyer will have to pay other fees such as a survey fee if he is obtaining a survey and mortgage application fee if obtaining a mortgage. A costs estimate should be given to the buyer by his Solicitor at the start of the transaction. For a first time buyer these will include stamp duty if the price is over £300,000, search fees (around £300 but could be more or less depending on fees of providers and location of property), land registry fees charges by the land registry to register the purchase on a sliding scale according to price and legal fees charged by the Solicitor for carrying out the legal work.
If you’d like a quote for buying and/or selling a property contact us