Conveyancing Frequently Asked Questions
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What is Conveyancing?
How long does the process take?
It is extremely difficult for any conveyancer to offer an accurate estimate of how long the transaction or settlement will take, an exact timescale being almost impossible, since many factors may affect the length of the process. The length of time that passes in the process will also depend on the length of time required by conveyancers to acquire all the correct documents from other conveyancing solicitors.
Conveyancers will however want to try to complete the process as quickly and painlessly as possible to satisfy clients. Customer service is at the heart of these conveyance services, which is why most conveyancers offer services which are a no sale, no fee model. This essentially just means that you will not be charged any fees for the conveyancing solicitor’s time if no sale is secured.
Is Survey Necessary when I Buy a Property?
A Freehold transaction is typically straightforward when compared to leasehold transactions; however, you will still need a solicitor. They must ensure that any seller is a registered owner and that the seller is entitled to sell the owned property. Planning is also checked for constraints to ensure the seller has obtained permission for any extensions or alteration on the property and that the property in question meets regulatory standards. Then they will check if the property has been issued a completion certificate from whichever local authority has responsibility for properties in the areas.
Finally, they also check if there is an easement or covenant on the property. Mortgage lenders can also be used, and if this is the case, they have the further requirement that a search be carried out on the property. The searches vary with respect to which area you are buying a property in and which lender is involved, however a search from the local authority is always included in the process.
A Leasehold transaction is comparatively more complicated. Such leases have clauses that can be difficult to interpret and a little misunderstanding in interpreting them can end up costing you. Moreover, to check the seller’s authenticity, the solicitor also makes sure to check against the freeholder and the managing agent.
When Do I Need to Pay the Conveyancing Fees?
Similarly, if buying a property, you will have to make an upfront payment to cover any costs associated with the searches that are essential to progressing the conveyancing process. Your upfront payments here are made to any third parties involved in the process and don’t go towards the cost of your personal conveyancer.
Furthermore, before exchange of contracts, buyers may be required to deposit a fund to cover this payment. In case of a deficit of funds incoming from net proceeds of a related sale and/or mortgage loans, buyers may be required to pay off the balance before completion of the process.
What is meant by ‘being in a chain’?
Furthermore, when all parties involved in the process have organised a date of exchange or completion convenient for everyone’s needs to be decided. All parties involved in the ‘chain’ process have separate agendas and concerns to follow and are connected to another. If someone breaks the chain by pulling out, issues may arise.
What is a Leasehold Property?
What is Indemnity Insurance?
In this sort of situation, an indemnity policy would be ideal. Should such a problem arise for whatever reason, the policy will protect you. If such a policy is offered to you, it is significant to remember what the insurance covers and what it doesn’t.
For example, in case of missing or incorrect building regulations, the insurance doesn’t cover the cost of getting the work done properly; however, it will cover the cost of any actions taken by the local authority to fix the issue. If they do not take any action (especially in cases when the property has been around for a year or less in which local authorities won’t take action) you will not be eligible for a claim.
What is meant by ‘Exchange of Contracts’?
Therefore, it is critical to ensure:
- All documents relating to the legality of the process have been checked thoroughly
- The homebuyer’s report or survey is complete
- Repairs and other work must be completed by the selling party, before an agreement takes place
- Buyer has received their formal mortgage offer
- Buyer is able to pay the deposit sum
- That once contracts have been agreed upon, the buyer to signs it
- The selling party is required to sign it separately and once both parties sign the contract, copies of contract are exchanged by solicitors. After the signed copies have changed hands again, the conveyancing deal has become legally binding.
Do I need to show you the Mortgage Offer Before I can Exchange?
When are contracts exchanged?
Typically, contracts are exchanged between 7 to 28 days before completion, even though it’s sometimes possible to complete and exchange contracts during the same day. Once contracts are Exchanged that means the buyer needs to ensure they have taken care of all legal formalities beforehand to avoid any unfortunate incidents. The buyers contract should only be exchanged after:
- They have agreed upon an offer, which includes fittings and fixtures
- They have the surveys and mortgage valuation they want to have done finalised
- They have been formally offered a mortgage in writing
- They have a deposit on the mortgage arranged
- All relevant searches have been done by the solicitor
- They have organised building insurance, once contracts are exchanged, the buyer is from that point liable for the property. This means they must have buildings insurance to get started immediately
- They have funding arranged to pay off the contract deposit (in the past this meant 10% of the purchase price, but more recently it’s often less than that)
- They have agreed upon a date of completion for the sale. The date is written into the contract
- They have carefully read, understood and signed the contract
Once all terms have been agreed upon, the buyer will have to agree upon a time and a date to exchange contracts. This part is typically handled by the conveyancer.