The following is a general guide to the key stages of a conveyancing transaction for an individual purchaser when buying a property:
- Instructing a Solicitor and Client Due Diligence
Once you have instructed a solicitor to act, you should receive a Letter of Engagement, which includes details such as agreed fees and scope of work. Your solicitor will then ask for monies on account to cover the cost of search fees and other disbursements.
Your solicitor is required to carry out proof of identity checks in compliance with the Anti-Money Laundering Regulations and will obtain the following documentation from you:
- Proof of Identity: Original or certified copy of your passport or UK driving licence;
- Proof of Address: Original or certified copy of your bank statements or utility bills (within the past 3 months); and
- Proof of Funding: Original or certified copy of your bank statements (full copy) showing the funds required for your purchase have been deposited in your bank account for at least 3 months in a UK bank account or 6 months in an overseas bank account.
You will need to inform your solicitor if you have a related sale and/or require mortgage finance for the purchase.
If you are buying with the assistance of a mortgage, you will need to provide details of your solicitors to your lender so that they send a copy of your mortgage offer to your solicitors.
You will also need to inform the Estate Agent the details of the solicitors you have instructed so that they can issue a “Memorandum of Sale” to all parties.
Your solicitors will then write to the Seller’s solicitors to confirm instructions and request the draft Contract pack. For leasehold properties, your solicitors will also usually request the Seller’s solicitors to provide the Sales Management pack from the Landlord or the Managing Agent.
- Searches and enquiries
Once the draft Contract pack has been received, your solicitor will review the documentations and instigate the appropriate searches. Please note that the turnaround time for searches may sometimes take more than 10 days depending on the Local Authority.
Your solicitor will raise any enquiries if necessary.
Your solicitor will also discuss a potential completion date as soon as there are no outstanding enquiries.
- Pre-exchange
Your solicitor will prepare a report on title for you outlining the details of the property and drawing your attention to any issues or information you should be aware of.
If you wish to proceed, your solicitor will invite you to sign the Contract together with any other documentation and to transfer the deposit monies (usually 10% of the purchase price) in readiness for exchange of contracts.
Your solicitor will also advise that you to obtain quotations for building insurance for the property as you will take on the risk from exchange of contracts, unless stated otherwise. Please bear in mind this is usually a must for lenders.
- Exchange of contracts
Your solicitor will proceed to exchange contracts as soon as they have received your original signed Contract and deposit.
At this stage, you will become legally obliged to purchase the property and the agreed completion date will become final. In the event that you fail to complete on the completion date, you will be liable under the Contract to pay interest and expenses incurred by the Seller. You may even lose your deposit if the delay continues.
- Pre-completion
Prior to completion, your solicitor will prepare a completion statement calculated up to the completion date. It is recommended that you transfer the completion funds to your solicitor at least 1 business day before completion to avoid any delays which may affect your ability to complete on the completion date.
Your solicitor will carry out all the necessary pre-completion searches.
You should arrange a pre-completion visit with the Seller or Estate Agent to ensure that the property is in an acceptable condition. If there are any issues at this point, you should notify your solicitors as soon as possible.
If you are buying the property with mortgage finance, your solicitor will submit a Certificate of Title to request drawdown funds from your lender. However, please note that most lenders will require a minimum of 5 working days’ notice for drawdown requests.
- Completion
On the day of completion, your solicitor will remit the completion funds to the Seller’s solicitors before the contract time which can vary from 12.30pm to 2pm and the Seller’s solicitors will notify your solicitor upon receipt. The Seller’s solicitors will then confirm completion and inform the Seller and/or the Estate Agent to release the keys to your new property to you.
Your solicitor will advise you when completion has taken place so that you can collect keys at the designated place, which is usually with the estate agents.
- Post-completion
Following completion, your solicitor will deal with post-completion formalities which includes paying any Stamp Duty Land Tax and lodge an application to the Land Registry to register your interest in the property. Please bear in mind that the Land Registry may take at least a few months to register your ownership of the property.
If the property being purchased is Leasehold, your solicitor will serve a Notice of Assignment to your Landlord and/or Managing Agents to ensure that your details are updated. Where you are mortgaging the property, then the Landlord or Managing Agents will need to be notified by way of a Notice of Charge.
In most cases, you are required to pay the fees for receipted notices mentioned above and any other compliance fees.
Once the registration at the Land Registry has been completed, your solicitor will forward you the registered title confirming your ownership of the property. If you purchased with assistance of a mortgage, your solicitor would send a copy of the registered title to your lender evidencing that their charge has been registered.