Conveyancing Frequently Asked Questions
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Here at Conveyancing Store, we are more than happy to discuss any queries you may have. We have an experienced team of expert solicitors who are willing to share their knowledge and help you through the conveyance process.
How long does the process take?
The standard settlement period is 6 to 8 weeks once the contracts have been exchanged. The terms of settlement can however be longer or shorter than this depending on the individual circumstances by the seller or buyer prior to signing the contract.
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 house survey is an inspection of a property’s condition conducted by experts. Surveyors inspect the property and report any issues to do with the condition of the property. These can vary from minor to significant structural problems. Home buyers generally have a survey done on a property when their offer has been accepted.
The type of house survey you’ll require depends on the age and condition of the property. Buyers most commonly choose a mid-level survey (like the Rics Home Survey – Level 2 or RPSA Home Condition Survey). For older properties, a more comprehensive survey may be recommended.
The cost of a survey will vary depending on location, size and the type of property. Different surveyors charge different amounts, so make sure you get a few quotes.
You don’t need to get a survey done on a property. But a survey can help you avoid expensive surprises, like an unexpected rewiring job. It also gives you peace of mind; it’s far better to be aware of any problems before you buy a property. This way you can make an informed decision about how much you’re willing to payand, if necessary, budget for any repair work.
If major problems are uncovered, you may be able to negotiate on price with the seller.
When Do I Pay the Conveyancing Fees?
Sellers normally have to make a small advance payment before conveyancing commences. The remainder of the fees are usually paid through the balance of the sale after repaying any mortgage loans.
Buyers usually have to make an upfront payment to cover searches and other disbursements. Your upfront payments here are made to any third parties involved and don’t go towards the cost of your personal conveyancer.
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 ‘Being In A Chain’?
If you are in a ‘chain’, this means you are one of several sellers and buyers involved in the process. For example, you are buying a property , and a third person is buying a property from you, this is what’s called a ‘chain’ . The different conveyancing transactions typically make the overall transaction process much lengthier. This is primarily because everyone involved in the process need their own transactions ready in advance for a final transaction to finally end the process.
Furthermore, when all parties involved in the process have organised a date of exchange or completion, everyone needs to be ready at the same time.. All parties involved in the ‘chain’ process will 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?
A property subject to lease is called leasehold property. A lease is essentially permission for a person to make use of a property for a certain time period without having ownership over the property. Typically, leases are issued for a term of 99 years. It is common for apartments and co-owned properties to be on leasehold agreements. A lease agreement contains a number of agreements between a lessor (the landlord) and the lessee (the tenant). Ground rent, which is usually the nominal amount, is paid under a lease. A service charge will also be in place to cover additional costs such as general upkeep, gardening or decoration and insuring the property.
What is Indemnity Insurance?
Indemnity Insurance was not very common some time ago but more recently became very common, you have likely heard about these leases if you’ve been involved in any property sale transactions in recent times. Indemnity Insurance will protect against possible problems that may appear when buying a property. For example, you could be faced with a murky legal situation involving the deeds. A solution to such a problem, by going to any other involved parties, may be quite expensive and a very sluggish process or even an impossibility.
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 ‘Exchange Of Contracts’?
Once all parties agree on the details, contracts will be exchanged between the seller and the buyer. They will need to be signed. A deposit will be paid to the buyer and from this point on, the agreement becomes legally binding. If the buyer chooses to pull out of the sale at this point, the deposit is lost. Similarly, in the event the seller bails out, they can be sued by the buyer.
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?
Written proof will be needed of the Mortgage terms and confirmation. Any necessary funds will be provided by your lender. Your conveyancer will need to see all of this before starting the process. Conditions in a written Mortgage offer must be satisfied for any funds to be released and therefore checks need to be performed for such conditions and they must be addressed. Also, of course, you will want to be satisfied with the product that is offered to you.
When are contracts exchanged?
Both parties involved in the process, sign contracts separately; however, once the formal exchange of contracts take place though your solicitors, the deal becomes legally binding. In case a party pulls out during the period of contract exchange and completion, they will have to suffer major financial penalties.
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.
What are the next steps to be followed once the process is completed and keys to my new home are handed over to me?
The mortgage funds of a buyer are received by their conveyancer. These funds are then sent, as soon as possible, to the seller’s conveyancer. Once the conveyancer receives funds, the process is complete. The funds will be received directly from the banking system, so the solicitors no longer have control over the pace of the transaction once the funds are sent. Furthermore, if the chain is long or in the case there is some other delay, you may get stuck for several hours; typically, the process lasts a few hours. Keep in mind that the contractual completion time usually is 1 pm and you will not be allowed to move before that time, regardless of if the seller has received the purchase funds. Once funds are received by sellers, your conveyancer and their conveyancer will contact each other and the estate agent to advise the release of the keys.