Steps to Buying a House – a Solicitor’s Guide 🏡
Jun 06, 2020 | Joseph Lewis
What are the steps to buying a house? This is a common question often asked by those seeking to make their first foray into the world of property investment and have no prior experience of the process of buying a home.
The process of buying a home is undoubtedly one of the most stressful things you will do in your lifetime. It is also one of the largest financial investments you will ever make. Naturally, it can therefore be an incredibly daunting prospect, particularly for first time buyers. To assist, we have prepared the complete solicitor’s guide to buying a house including the initial steps, before moving from draft contract to completion.
The Initial Steps to Buying a House
One of the first steps to buying a house should always be to instruct a solicitor who can expertly guide and navigate you through the process of moving home. You should be considering instructing a solicitor even if the property is still on the market, as a good solicitor will ensure that all legalities are tied up as quickly and efficiently as possible. By instructing a solicitor at an early juncture, you will avoid any delays once an offer has been accepted on the property and this will facilitate the smooth progression of the entire transaction.
Once you have instructed a solicitor, the next step is the compulsory identification checks that need to take place in any property transaction, the purpose of which are to ensure that the all-important money laundering regulations are complied with. You should receive a Letter of Engagement or confirmation of Terms of Business from your solicitor; these will need to be signed and returned as soon as possible together with your identification documents to enable your solicitor to commence work. Funds will also be requested on account in order to cover the cost of search fees which, depending upon the area in which you are purchasing your property, will usually be around the £300 mark.
If you are engaged in the house selling and buying process, you will need to complete some additional forms relating to the transaction. These will include a property questionnaire and a fixtures and fittings form noting the items you will be taking from or leaving at the property.
The Pre Contract Stage
Once you make an offer on the property, your estate agent will request your solicitor’s details to pass onto the seller’s solicitor. The seller’s solicitor will then proceed to prepare the draft contract whilst your solicitor will carry out all the necessary searches and undertake investigations on the legal aspects of the property. Searches carried out by your solicitor will include a Local Search and such other searches (for example, Water Searches) that they deem appropriate for that particular property.
Once the draft contract pack has been received, your solicitor should carefully examine the contract, the title deeds and the forms completed by the seller, and if necessary, raise the appropriate enquiries with the seller’s solicitor.
If you require a mortgage, you will need to contact your mortgage broker or lender in order to finalise the mortgage arrangements. Your solicitor will receive a copy of the offer and go through the conditions. Your solicitor will normally undertake legal work on behalf of your lender as well, which will save you an additional expense! The lender’s solicitor will need to check that the property complies with the terms of the mortgage. They will then prepare the mortgage deed/legal charge which will need to be signed and will secure the mortgage on the property.
As the buyer, you will have to take the property with any defects it may have; therefore, you should obtain a survey on the property before exchanging contracts. In practice, and in circumstances where you are obtaining a mortgage, this is often done by the lender, but you should carefully consider whether this is sufficient for your needs or whether there is a requirement for a more detailed survey. The lender’s own valuation will not necessarily tell you if the property is worth the price you are paying for it, nor will it reveal any structural defects. It is therefore recommended that you obtain a detailed survey of the property from an appointed chartered surveyor prior to exchange of contracts (an additional fee will be payable for this). A chartered surveyor should be recommended to you by either your mortgage lender, estate agent or solicitor and there are two main types of survey available, namely the Homebuyer’s Report and the Building Survey.
If you are engaged in the house buying and selling process and there is a ‘chain’ of transactions, the same procedure will need to be carried out for every property in the chain. Exchange of contracts cannot take place until everybody in the chain is ready to exchange and all parties have arranged their finance.
Exchange of Contracts
Once all the necessary searches and investigations have been completed, and all the parties in the transaction or chain of transactions have agreed a completion date, the next step is to exchange contracts.
If your matter involves the house buying and selling process, your solicitor should ensure that exchange of contracts on both transactions is simultaneous. This will also usually be with the same completion date that has been agreed by the parties. The completion date is agreed by the parties via their solicitors prior to exchange of contracts and is normally between two and four weeks from exchange. The completion date must be on a weekday and is normally the date on which the parties move.
Upon exchange of contracts, you will need to pay a deposit (usually 10% of the purchase price) unless the deposit being used is that coming up from your sale. The exchange date is the date when the contract will become legally binding. This will mean that you will now be bound to buy the property and the seller must sell the property on the agreed date for completion.
In the period between exchange of contracts and completion, your solicitor will prepare the transfer of property. This will need to be approved by the seller’s solicitors and signed by the parties.
Completion when buying a house always results in a release of emotions ranging from relief to ecstasy. So when exactly is the completion date? To put it in layman’s terms, the completion date is moving day. It is the date on which you will pay the agreed purchase price, receive the keys and will be able to take possession of the property. The seller will be required to vacate the property on this date. Your solicitors will arrange for the balance of the purchase money to be sent to the seller’s solicitors via telegraphic transfer.
You have now finally arrived at the final furlong. Once the seller’s solicitor is in receipt of the purchase funds, they will release the key which will usually be held by the estate agent. Your solicitor will receive the transfer of property and any other title deeds or documents relating to the property from the seller’s solicitor.
The seller’s solicitor will then proceed to redeem any mortgage or mortgages on the property and account to the seller for the proceeds of sale.
Following completion, your solicitor will need to arrange for payment of any Stamp Duty Land Tax (SDLT) arising in respect of the transaction. Your solicitor will then receive a stamp duty certificate from the Inland Revenue and will need to apply to register you as the owner of the property on the Land Registry’s central database. You and the mortgage lender (if applicable) will be duly informed once confirmation of registration of ownership of the property is provided by the Land Registry.
So there you have it – the complete solicitor’s guide on the steps to buying a house!
How Elite Law Solicitors can help
Joseph Lewis is a solicitor in our Residential Conveyancing team with experience in all aspects of conveyancing. He can assist whether you require guidance on the steps to buying a house or if you are already involved in the process of buying a home.
Joseph places a strong emphasis on client care and adopts a pragmatic approach to ensure his clients’ needs are met efficiently and effectively. Recent reviews from clients who have previously used Joseph’s services can be found by clicking here.
If you require any assistance with the house buying and selling process or have any queries relating to any of the issues discussed in this article, please get in touch with Joseph and arrange a free initial discussion by calling 0800 086 2929, emailing email@example.com or completing our Free Online Enquiry Form.
The content of this article is for general information only. The information in this article is not legal or professional advice. For legal or professional advice please contact an appropriately qualified and experienced property solicitor such as those within our firm.