Navigating the Conveyancing Process for buying/selling your house: A Step-by-Step Guide from Pre-Market to Post-Completion
Introduction
Conveyancing is the process of transferring property ownership from one person to another. Whether you are buying or selling, understanding the stages involved can help you navigate it efficiently. This comprehensive guide outlines the key stages of conveyancing, from pre-market preparations to the post-completion stage.
Pre-Market Stage
A. Instructing an Estate Agent
The transaction will begin by choosing an estate agent to help you market and sell your property. As a seller, you should research reputable agents with good reviews and local market knowledge. Get your property valued by several agents to determine a competitive asking price, then sign an agreement with your estate agent outlining the terms of their service. Accordingly, the estate agent will list your property on several platforms to attract buyers. Potential buyers will view your property, and you’ll start receiving offers. Schedule and conduct viewings and once a buyer is found and price agreed, the conveyancing process can then commence and both parties can instruct solicitors.
B. Instructing a Solicitor
Instructing a solicitor or conveyancer is important in the conveyancing process due to their legal expertise. They conduct essential searches, identify potential issues, and ensure compliance with all legal requirements. Additionally, they handle all financial work securely, negotiate terms, and facilitate communication between parties. A solicitor or conveyancer’s involvement is also important as they ensure accuracy, meet deadlines, and provide peace of mind by protecting your investment and ensuring the transaction proceeds efficiently and legally.
Pre-Completion Stage
A. Drafting the Contract
The pre-completion stage is usually the longest stage in the conveyancing process. During this stage, the estate agent sends to both solicitors, buyers and sellers the memorandum of sale. This includes the details of the buyer, the seller, and the agreed price.
The seller’s solicitor will begin preparing the draft contract, gathering the title deeds, and sending the protocol forms for the seller to complete. The protocol forms are the Property Information Form (TA6), the Fittings and Contents Form (TA10), and the Leasehold Information Form (TA7) if you are buying a leasehold property. The purpose of these forms is that they provide all information and details of the property. In addition, the seller must provide additional documents such as planning permissions, energy performance certificates, warranties, and tenancy agreements if the property is let out. The draft contract is then sent to the buyer’s solicitor.
B. Pre-Contract Searches
As mentioned, the seller’s solicitor will send the buyer’s solicitor the contract pack and the buyer’s solicitor will start investigating the title and raising enquiries based on all the documents received. At the same time, the buyer’s solicitor will conduct several searches to ensure there are no issues with the property. It is the responsibility of the buyer’s solicitor to find out as much as possible about the property before allowing you to enter into a binding contract. Accordingly, if searches indicated something about the property which you are not happy with, then you are free to withdraw from the transaction with no liability. These searches mainly include local authority, environmental, and water and drainage searches. The search application needs to be sent to the relevant authorities as soon as instructions have been obtained as it can cause a delay in the transaction.
C. Buyer’s Finances
As a buyer, it is important to communicate with your solicitor if you have sufficient available cash to purchase the property or if you are taking a mortgage. In the latter case, the lender will instruct a solicitor to act on his behalf and communicate with your solicitor in relation to this. Usually, in residential transactions it permitted that the solicitor who is acting for the buyer can also be instructed by the lender. The solicitor who is acting for the lender will:
- Draft the mortgage deed for the borrower’s signature (buyer)
- Obtain a bankruptcy search against the borrower and certify that the legal title of the property is in good order.
D. Survey and Valuation
It is also important for a buyer to arrange for a survey to assess the property’s condition and value. In conveyancing the maxim caveat emptor applies but with limited exceptions. In other words, it is for the buyer to make sure of his bargain. Therefore, as a buyer, your solicitor should discuss with you the need for a survey in appropriate cases and if you are taking out a mortgage, your lender will conduct a valuation to ensure the property is worth the loan amount.
E. Reviewing and Signing the Contract
The seller’s solicitor drafts the contract and both parties review the draft contract incorporating the latest edition of the Standard Conditions of Sale and communicate any necessary changes. Both parties sign the contract but it is not yet legally binding. The signed contracts are held by the solicitors until the exchange of contracts.
Exchange of Contracts
A. Exchanging Contracts
The exchange of contracts is the most important stage because it makes the sale and purchase legally binding. This means that if any of the parties decided not to complete then the other party can sue for breach of contract. On exchange, the buyer pays the deposit (usually 10% of the purchase price) which will be held by the seller’s solicitor until completion. This payment acts as part payment of the purchase price, demonstrating the buyer’s good intention. In addition, both solicitors’ will agree on a completion date which is usually one to two weeks after the exchange.
Completion Stage
A. Preparing for Completion
Both parties prepare for the completion of the sale. The buyer finalises mortgage arrangements (if any) and the seller’s solicitor prepares the transfer deed. The buyer’s solicitor conducts final searches to ensure no new issues have arisen.
B. Completion Date
Accordingly, completion is the day in which the buyer moves into his new home in a residential transaction or his new shop in a commercial one. This is also the day in which the balance of the purchase price has to be paid to the seller. This date will be agreed by both parties’ solicitors before exchange of contracts. In residential transactions, the completion date is usually 14 days or less from the date of exchange. This provides for sufficient time must for the pre-completion steps in the transaction to be carried out.
Post-Completion Stage
The last stage of the process is the post-completion stage. After completion, there are a few remaining tasks to finalise the process. Both solicitors need to inform their clients of the successful completion of the transaction. Additionally, if the buyer’s solicitor is also the one acting for the lender (if any), he should also inform the lender of the completion. Moreover, the buyer’s solicitor pays any Stamp Duty Land Tax (SDLT) due and makes an application for registration of the title to the Land Registry using the AP1 Form. However, if the lender (if any) instructed another solicitor other than the buyer’s, the lender’s solicitor will take possession of the transfer and title deeds upon completion and he will deal with the registration of the documents. Lastly, the buyer should also arrange for the transfer of utility accounts (electricity, gas, water) to their name and notify the local council for council tax purposes.
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