We thought we would share the top 10 questions we are asked most by new clients and we hope you find this helpful. These replies have been kept brief and do not cover every scenario, and so please do contact Dee Aylward directly about any particular property you are thinking of purchasing or any specific questions you may have.
1. My estate agent is asking me for my solicitor’s details, what are the initial steps?
The very first initial requirements are for you to provide photo identification and proof of address and we must have sight of the original documents. In these Covid times, we are happy to have sight of the documents over a video call, such as Zoom or Facetime. We will also ask you to provide evidence of your source of funds and source of wealth.
2. How long does it take?
A typical transaction takes approximately 3 months from start to finish. The key stages are exchange of contracts and completion.
Although it is possible to exchange contracts in 10 days or less say where the buyer is a cash buyer, typically it will take in the region of 6-8 weeks to reach exchange. Completion is typically 2-4 weeks after exchange.
We would also add that from experience sellers often claim to be chain free but during a transaction may decide they have an onwards purchase which can delay matters whilst they wait for that transaction to be agreed/coincide with your purchase and so it is good to sound this out with the estate agent at the start of the matter.
3. What happens before exchange?
This is the stage of the transaction when the bulk of the legal work is carried out. We will order searches for you (and for your mortgage lender if you are obtaining a mortgage), we will review the draft contract and papers from the seller’s lawyers and report to you on those and raise any necessary enquiries on them with the seller’s lawyers. The papers consist of the legal title including the Lease if the property is leasehold and property information forms the seller has to complete including copies of any planning permission or other local authority consents for any works they have had carried out, and if the property is leasehold, the service charge and other management information.
We will be ready to exchange when we have satisfactory replies to enquiries, our copy of your mortgage offer, you have your survey result, and we have all of the search results back. Sometimes if you are purchasing a leasehold apartment, the seller may need to obtain the consent of the Landlord to the sale and for this you may be required to provide references.
4. What is exchange of contracts?
Exchange is the point that both parties usually want to reach as quickly as possible, as this is the point the purchase/sale becomes legally binding, including the completion date, which is written into the contract.
As a buyer this is the point you will pay a deposit to the Seller, the standard amount being 10%. The seller’s lawyer will hold this until completion and release it to their client then.
Each solicitor holds their own part of the contract signed by the seller/buyer and over a short telephone call they agree to date the contract and insert the completion date. The parts of the contract are exchanged in the post.
It’s a brief call to have worked so hard to get to!
5. What happens on completion?
On completion, the balance of the purchase price is paid to the seller’s lawyer. When received they will call us to confirm the completion and then we will let you know the good news that you can collect your keys.
6. Why is there a gap in between exchange and completion?
Although it is possible to exchange and complete on the same day, usually the parties wish to achieve the exchange as soon as possible so that the deal becomes binding. They then have time to plan for the completion in terms of packing and booking removals.
7. What are the key payment stages?
We ask our clients to pay £500 for the searches at the start of the matter, 10% of the price is payable as a deposit on exchange, and the balance of the price plus the stamp duty land tax, land registry fees, legal costs, and all other third party payments should be transferred to our client account by bank transfer to be received by us the day before completion at the latest. If you are purchasing a leasehold property you may also have to pay service charge and/or ground rent apportionments.
8. Do I have to be present on exchange and completion to sign?
No you do not. Documents can be emailed to you to sign and return, either electronically or by post.
9. I am selling my property but do not have the 10% deposit for my purchase.
You can use the deposit from your sale on a related purchase if it will be held as stakeholder on your purchase, and as long the purchase completes on the same day as the sale or after the sale. If the deposit from your sale does not equate to a full 10% deposit for your purchase, you may have to make this up to 10% or the seller on your purchase may accept a lesser deposit. But it usually needs to be at least 5% of the purchase price.
10. What happens if the seller or I withdraw from the sale/purchase after exchange of contracts?
This very rarely if ever happens!! Very basically, the seller could keep your deposit and re-sell the property. A seller would have to return your deposit and you could sue them for breach of contract. In our experience both parties are motivated not only to achieve the exchange but also the completion.
