Conveyancing Explained

This guide will give you an overview of all main types of conveyancing transactions. It is divided into two parts: –

1. Who is who in your conveyancing transaction

2. Key stages of the conveyancing progress.

Who is who in your property transaction ?

Estate Agents

Whether on your local high street or online Estate Agents are your first port of call whether buying or selling a property.

Sellers: An estate agent acts and is paid for by the seller. They will usually provide a ‘free’ valuation of the property. It is usually advisable to obtain at least three valuations from different agents in the area local to the property. Sellers should check the estate agent’s contract carefully before signing. Some contracts are ‘sole agent’ which means that you cannot ask another agent to sell the property during the term of the contract. Some are even ‘sole selling rights’ which means that you can’t ask another agent to sell and you can’t sell privately – if you do you still pay their fee. If in doubt your solicitor will check the estate agent contract and advise you on the T&C. Once you have ‘signed up’ with an estate agent they will market your property usually online and if they have a high street presence, in branch and possibly in the local paper. They will prepare a set of ‘property details’ which you will be asked to sign. These must, by law, be accurate and not misleading. They will then send out the property details to buyers registered with them. They will arrange for buyers to view the property and may even show the buyers around for you. They are obliged to put all offers made on the property forward to you. If you are not happy with a buyer’s offer they will negotiate on your behalf. Once an offer is accepted by you they will obtain details of the buyer and their solicitor and will ask you for your solicitor’s details. These will be put in a set of ‘Memorandum of Sale’ document which is then sent to both sets of solicitors and usually you are copied in. From there the solicitors take over, although most estate agents carry out ‘sales progressing’ which means they check with the solicitor each week for progress and report this back to you. Most agent contracts provide for payment on exchange of contracts but they wait until completion to be paid. Generally, with your permission, the solicitor will pay the estate agent on completion.

Buyers: Although the estate agent is acting for the seller you will have a lot of contact with them. You do not pay the estate agent and you should not pay an up front holding deposit or any money to the estate agent. If they ask you to pay an up front fee please check immediately with your solicitor. You will be asked to register your details with them so that they can send you properties to look at. Most still do this in writing or e mail and many will now text you or provide an ‘App’ for you to receive new property. Should you wish to view a property the estate agent will make the appointment and may show you around the property if the Seller is not available to do this. When your offer is accepted they will check your financial ability to proceed so they will want to see evidence of your deposit and your mortgage. They will check whether you have a property to sell and will want details of the sale property and any chain involved. Most estate agents will offer recommendations for surveyors, financial advisors and solicitors to carry out your conveyancing. Some will even have in-house financial advisors, surveyors and conveyancing solicitors. Beware though, they are not always the cheapest nor the most efficient and it is wise to obtain at least 3 survey, mortgage and conveyancing quotes before proceeding. If your offer is accepted you can expect the estate agent to keep in touch with you and your solicitor to ensure the sale progresses well.

Independent Financial Advisers and mortgage brokers

If you need to obtain a mortgage you can either research the market yourself or you can choose to use an IFA or a mortgage broker. You can get lots of mortgage information on-line and also from your local banks and building societies. Banks and building societies will only be able to offer you their mortgage product or a limited number of products. An IFA and some mortgage brokers will be able to offer you a choice from every mortgage lender in the market. Although you have to pay an IFA or mortgage broker to arrange your mortgage, you can often get a better mortgage deal. If your circumstances are unusual, i.e. you are self-employed, have a history of credit problems, low income, small deposit an IFA or mortgage broker may be able to find you a suitable mortgage. Expect to pay a small up-front fee for advice; the majority of what the IFA or Mortgage Broker is paid will come from the lender as a ‘procuration’ fee and from any insurance related products that you buy from the IFA or Mortgage Broker. They have to provide you with details of any payments they receive from the lender and any related insurance companies. Should they find you a suitable mortgage they will help you complete the mortgage application and they usually submit this to the lender on your behalf using an online platform. An IFA or Mortgage Broker will help you deal with any questions from the lender. An IFA or Mortgage Broker may also recommend a surveyor, conveyancing solicitor but again do shop around for three quotes to get the best deal.

Surveyors

A surveyor is someone who is qualified to carry out a physical inspection of a property and advise you of its condition. They may also recommend what repairs need to be done and if any further surveys such as electrical, gas and timber and damp surveys are necessary. You should choose a surveyor who is a member of the Royal Institute of Chartered Surveyors (RICS). The RICS have a web-site where you can input a post code and obtain a selection of surveyors local to the property. You can then obtain several quotes. You should note that the ‘survey fee’ which you pay to your mortgage lender does not necessarily include a physical inspection of the property. That fee is used only for the mortgage lender to check whether the property you are buying is correctly valued and you cannot rely on it as it is only for the lender’s purposes. There are different types of survey available; these are a Home Buyers Report and a full Structural Survey. The surveyor will be able to advise you which type you should choose depending upon the age, location and structure of the property. The surveyor will provide you with a written report which will highlight any physical and legal problems they have detected so you should ensure that a copy is given to your solicitor.

Solicitors

Whether buying or selling you are wise to source and instruct a solicitor as soon as possible. They can advise you on the estate agents contract and also on any arrangement with an IFA or mortgage broker helping you to avoid costly mistakes early on. Most solicitors now offer a ‘no completion, no fee’ deal which means that you can instruct early on without incurring hefty legal fees. When you have agreed to buy or sell a property this is called ‘subject to contract’. This means that although you have agreed a price this is subject to survey, mortgage and the conveyancing enquiries and searches. Nothing is legally binding until ‘exchange of contracts’ has happens.

Key stages of conveyancing

Sale

• Solicitor will send you a letter confirming their estimate and their Terms and Conditions. This letter usually includes Property Information Forms and a Fixtures and Fittings form. Read this carefully and sign and return any forms. You will be asked to provide proof of your identity, evidence of your finances for Anti-Money Laundering and you may be asked to pay ‘money on account’ for disbursements such as Official Copy Entries and ID checks

• Solicitor receives signed forms, ID and money on account. They order
Official Copies (of your deeds) from the Land Registry. They write to your
buyer’s solicitor to confirm they are instructed and will be sending contracts

• Official copies are received and a contract is prepared by your solicitor and sent to
the buyer’s solicitor. This usually includes the Fixtures and Fittings form, copies of your deeds and a Land Registry plan of the property

• Once the buyer’s solicitor has checked the contract they will send your solicitor
pre-contract enquiries. Your solicitor will answer these and may have to refer back
to you to do so. They will then reply to the pre-contract enquiries.

• When the buyer’s solicitor is satisfied with the contract, replies to enquiries and the
results of the searches they will ‘approve’ the contract and return one copy to your
solicitor.

• Your solicitor will send you the contract to sign.

• When your solicitor receives the contract back from you they will let the buyer’s solicitor know that they are ready to exchange contracts.

• When the buyer’s solicitor confirms they too are ready to exchange contracts a ‘completion’ date will be suggested and your solicitor will ask you if that date is convenient for you. Once a completion date is agreed the two firms of solicitors speak on the phone and exchange contracts.

• Your solicitor posts your signed contract to the buyer’s solicitor. The buyer’s solicitor
posts the buyer’s signed contract to your solicitor and transfers the deposit. This
deposit must be held by your solicitor until legal completion.

• The buyer’s solicitor will now send your solicitor another set of questions called
‘Requisitions on Title’, these deal with the mechanics of completion. You will be sent
the final Transfer (TR1) to sign.

• Your solicitor will obtain repayment figures for any mortgages or loans you have on the property and will obtain the Estate Agent’s invoice. If it is leasehold they will calculate any underpaid or overpaid ground rent and service charge. They will then send you their invoice and completion statement. If there is a balance due from you they will ask you to pay this before completion.

• On the day of completion the buyer’s solicitor will send your solicitor the balance of the sale price. Once received your solicitor will phone you to confirm completion has taken place. You will either give the buyer the keys or the estate agent will do this. Generally, you need to have moved out by lunch-time.

• Once completion has taken place your solicitor will pay off any loans or mortgages and pay the estate agent. If there is money due back to you they will send this to you either by cheque or BACS as previously agreed with you. They will
send the deeds onto the buyer’s solicitor.

Purchase

• Your solicitor will send you a letter confirming their estimate and their Terms and Conditions. Read this carefully and sign and return any forms. You will be asked to provide proof of your identity, evidence of your finances for Anti-Money Laundering and you may be asked to pay ‘money on account’ for disbursements such as searches
• Once your signed forms and payment are received your solicitor will write to the Seller’s solicitor requesting a draft contract.
• When the draft contract is received, with your permission, they will apply for the searches. They will check the contract papers and will send ‘pre-contract’ enquiries to the seller’s solicitor.
• When your solicitor has received replies to their pre-contract enquiries from the seller’s solicitor and the results of the searches and your mortgage offer, they will check these and will send you a ‘contract report’ on their findings with advice. This report usually contains the contract for you to sign, the mortgage documents, the transfer deed and the Stamp Duty Land form. You will need to sign and return all of the documents; some will need to be witnessed. You will also be asked to send your deposit.
• Once your solicitor has received the signed contract, related documents and your deposit they will advise the seller’s solicitor that they are ready to exchange contracts.
• When the seller is ready to exchange contracts with you a completion date will be suggested and you will be asked if that is convenient for you.
• When the completion date has been agreed your solicitor will phone the seller’s solicitor and exchange of contracts takes place in that phone call.
• Each solicitor sends the other their client’s signed contract and your solicitor will also transfer the deposit funds to the seller’s solicitor.
• You will be notified that exchange of contracts has taken place.
• Your solicitor will send another set of enquiries called ‘Requisitions on Title’ to the seller’s solicitor and will also send them the final transfer deed (TR1) if this has not previously been sent. Your solicitor will make a priority search with the Land Registry and a bankruptcy search against you. They will prepare their invoice and completion statement and send these to you. You will be asked to make payment prior to completion.
• If you are obtaining a mortgage your solicitor will send a request to your lender to send the mortgage money for completion (Report on Title).
• On the day of completion your solicitor will send the purchase money to the seller’s solicitor and phone them to say they have done so. They will phone you to confirm completion has taken place. Generally you collect the keys from the seller or their estate agent. Completion time is usually around lunch time.
• After completion your solicitor will receive any deeds and the Transfer deed from the seller’s solicitor. They will send the Transfer together with the Stamp Duty Land Transaction form and any stamp duty to HMRC. They will then apply to the Land Registry to register your purchase and the mortgage. If the property is leasehold they will send a Notice to the Landlord of the change of ownership.
• Once your ownership is registered at the Land Registry your solicitor will write to you with a copy of the Land Register to confirm.