Buying a house is probably the most expensive purchase you will ever make, so it is important to understand everything it entails, including the different legal stages to the process.
If you are a first-time buyer in particular, while you may be familiar with some of the terms – searches, exchange, completion etc. – you may not be certain what they mean.
So to make things a little easier, here’s Optimum’s guide to the house-buying process.
To ensure you and your mortgage lender are protected, your legal advisers need to carry out various searches, to find out information about the building and where it stands.
The lawyers will look at the local land charges registers. Local authorities are required to hold a local land charges register, which records obligations affecting properties within their administrative area.
Investigations will also be made into any planning decisions, roadbuilding proposals or rights of way that affect the property. It’s important for you to know that the search is limited to the property and won’t reveal any information about planning proposals for neighbouring properties.
An environmental search is included, for example looking at whether the property is at risk of flooding. A water and drainage search is also carried out. Depending on where the property is, a coal mining search might be needed as well.
Bear in mind, the property search is not the same as a survey. The search is an office-based exercise, while for a survey an inspection is carried out at the property to check its physical condition.
A survey is not a legally required stage in the process, but we strongly recommend you commission a survey, to ensure you avoid any nasty surprises after the house becomes yours.
At the exchange of contracts stage, you now become legally committed to buying the new property. This process is carried out between your solicitor and the seller’s solicitor, and the completion date is inserted in the contract on exchange of contracts.
Once contracts are exchanged, you cannot withdraw from the purchase without legal consequences. You are, of course, entitled to withdraw from the purchase at any time up to that point.
You will pay a deposit for the property to your lawyers, who will hold on to it until completion or pass it to the seller’s lawyers. If you fail to complete the buying process, you are likely to forfeit this deposit.
So before the exchange of contracts stage, make absolutely certain you are happy with the property and – as we have advised – have a survey carried out. If you find problems later on, you are very unlikely to be able to make any claim. It is a case of ‘buyer beware’.
At the point of exchange of contracts, any risk of damage (fire, flood etc.) may be passed to you, so arrange for your buildings insurance to start on the exchange day, rather than waiting until completion.
If you are taking out a mortgage to assist with your purchase, the solicitors will submit the lender’s Certificate of Title to request the draw down of mortgage funds in readiness for completion. Do note that each lender is different with regard to the required number of days between exchange and completion, and this is noted in the Mortgage Offer.
Once you have exchanged contracts, you will then receive a Completion Statement detailing the financial side of your transaction. It is important that any monies that are due from you to complete are paid to your solicitors the day before completion, to ensure that they are in funds and ready to complete as early as possible on the day completion.
The completion date is the day you have been waiting for! It is the day that you get to pick up the keys and move into your new property, which under the terms of the contract is normally around 1pm, but can be earlier.
Your solicitors will liaise both with yourself and the seller’s solicitors and, once the money has arrived with them, you have formally become the new owner of the property. Your solicitor will call you once completion has taken place to confirm that you can then go and pick up the keys from the selling estate agents.
If you are house-hunting and would like to speak to expert conveyancers to help with the legal process, please get in touch with the Optimum Professional Services team.
We handle the conveyancing process in Swindon, Wiltshire and across the South West for people who are buying and selling houses.