Moving Home
What is Conveyancing?
The word ‘conveyance’ means the legal transfer of ownership of property from the seller of the property to the buyer. There are several stages involved in this process for both the buying and selling of property:
• Stage one is concerned with the communication between the seller and buyer’s solicitor
• Stage two is the stage between the exchange of contracts and completion
• Stage three is what happens upon completion.
Solicitor’s costs for conveyancing are usually reasonably modest; however prices vary for some aspects of the conveyancing process, depending on the firm. This is why it is important to shop around to find the best solicitor for you.
Stage One: the communication between solicitors:
The first stage involves the exchange of information between the solicitors of the buyer and seller:
1. The buyer’s solicitor contacts the seller’s solicitor, after which they will receive a draft contract. The contract will contain information such as the terms of the agreement for sale, price details, information on deposits and information from the seller’s title deeds.
2. The buyer’s solicitor upon receipt of the contract will check for any unusual terms and may attempt to negotiate these if the initial contract is not satisfactory. The solicitor is also required to send to the buyer a copy of the contract so as to enable him/ her to check it as well. This enquiry and searches stage is important and has to be undertaken with due care. Most disputes arise out of negligence at this stage resulting from not carrying out the necessary searches. This is why it is very important to get the right solicitor.
3. The contract is negotiated and signed if everything is satisfactory. A completion date (the date at which ownership of the property will transfer from the seller to the buyer and the buyer can begin living there) is then agreed upon. If a mortgage is required, one is sought and secured at this stage. A solicitor is required to act on your behalf and deal with the formal requirements if you are taking out a mortgage.
Stage Two: the exchange of contracts and completion phase
At the second stage the purchase of the property becomes ‘official’. Before this point it is possible for either party to withdraw their offer. However, once the exchange takes place the parties are legally bound by the contract.
1. Once everything is agreed between the seller and buyer, contracts are exchanged. Often this takes place (becomes ‘official’) by both parties’ solicitors forming an agreement to exchange contracts over the telephone, and the documents are then posted to both parties.
2. The buyer pays the deposit, usually required, which in non-refundable and is typically set at 10% of purchase price.
3. The buyer’s solicitor then arranges the signing of the mortgage documents and carries out further searches on the register.
4. At this stage the buyer’s fees such as Land Registry fees and stamp duty must be paid. The solicitor will provide a statement detailing the total amount to be paid before ‘completion’.
Stage Three: Post Completion Phase
‘Completion’ is the final stage of the conveyancing process, when the purchase price of the property is paid in exchange for the conveyance or transfer of the property to the buyer.
1. Upon completion, the buyer receives the keys and the house has to be vacant for occupation.
2. The balance of the purchase price has to be paid.
3. The buyer receives the title deeds and the transfer documents.
4. It is important to ensure that all other costs and fees to do with the conveyance are paid off at this stage.
5. The solicitor conducts the final administration of the purchase and ensures everything has been done in accordance with the legal requirements.
Buying and selling property – common problems
There are several reasons the buying and selling process might not go according to plan. It is advisable to be aware of some of the potential problems and to seek legal guidance when problems arise:
Procedural Problems
During the enquiry and search process some problems relating to the property might arise, for example, it may be important to the buyer that planning permission is available yet a search reveals that this has been denied by the local authority, or there is a charge registered to the property.
Negotiations
It may be that, during negotiations between the parties, the buyer is not satisfied with the information provided by the seller relating to the property. It is important to note that the seller is not obliged to reveal all the faults of the property, therefore the buyer must be thorough in their investigations and obtain legal advice where anything is not understood.
Deposits
The deposit paid by the buyer to the seller at the second stage of the procedure will cause problems if the buyer is refusing to pay it, or if the solicitor or licensed conveyancer keeps hold of the interest accumulated on the deposit. In the first situation, the seller may be entitled to withdraw their offer. In the second situation, the seller is entitled to the interest and should request that the interest be passed on to them as this will not always happen automatically.
Mortgage services
Some solicitors offer, under the ‘Conveyancing’ umbrella, additional mortgage advice and services other than those for buying and selling property. For example, they may be able to offer help with taking out new mortgages, mortgage payment, and with drafting and checking the relevant legal documents. The benefit of seeking legal assistance with your mortgage is that a solicitor can give independent advice on what is best for you, unlike your mortgage lender whose priority when advising you on your mortgage is looking after their own interests.
Finding the best Conveyancing solicitor
Although a lot of law firms offer a Conveyancing service, the level and breadth of services offered can differ from firm to firm. Most firms will offer a quote for their standard Conveyancing procedure; however some firms deal strictly with the Conveyancing procedure, whereas others provide additional services such as written, detailed reports of your purchase/sale’s progress.
Which firm is most suitable to you will depend on your individual needs. However, the best firms will keep you informed at every stage of the procedure, and will not necessarily be your local firm.
Be wary of using Conveyancing services offered by supermarkets, they do not always use legal experts and will only be able to help you with certain parts of the procedure. It is also advisable to treat recommendations for solicitors from your estate agent with caution. Often these solicitors will not be able to offer the complete, informative service offered by most law firms.
Hu17.net - It's all about Beverley