Buying a property: What you need to know

Whether you're buying a property for the 1st or the 10th time, the process involved can often be daunting. There are several things that both first-time and repeat buyers need to consider before committing themselves to the purchase of a new property.

Once you have selected a property it is important to instruct a legal representative as soon as possible so that they can have the maximum amount of time before exchange of contracts to consider any problems which may arise with your purchase. There is a recognised procedure which solicitors follow when assisting clients with the purchase of a property, including taking initials instructions from the clients, obtaining the relevant documentation involved in establishing a sellers right to sell, investigating the contents of these documents, raising enquiries on any points which are not clear, and confirming the details of your mortgage offer with your bank or building society.

Once your solicitor is satisfied that all outstanding queries have been dealt with, you will be invited to attend a meeting with them during which they will explain the legal nature of the documents involved in the conveyancing process and invite you to sign the contract, your mortgage deed, and any other documents relevant to the transaction, for example a plan of the property. It is important to remember that it is not the signing of these documents which commits you to the conveyance. You will only be legally committed to the transaction once your solicitor has exchanged contracts with the other party's solicitor. This is frequently done over the telephone, with each solicitor giving an undertaking to forward the signed contract to the other.

Remember that exchange is the point at which both parties become legally bound to the conveyance. It is therefore vital that, before proceeding to exchange the contract, you are completely happy with the terms and conditions imposed by the contract and that you understand the consequences of them. Your solicitor is there to help you with this, and if you have any queries, no matter how trivial you think they may be, you should raise them with your solicitor prior to exchange.

In the vast majority of cases, before a solicitor can exchange contracts on behalf of their client, they will need to obtain a deposit from them. This is usually 10% of the purchase price of the property. Although the deposit required may only be 10% of the purchase price, you will need to ensure that sufficient funds are available for you to complete your purchase if your mortgage represents less than 90% of the purchase price. So if, for example, you are buying a property for £100,000 and have a mortgage offer of £75,000 you would need to issue that you not only have £10,000 deposit available to your solicitor but also the £15,000 shortfall between the mortgage sum, the deposit and the purchase price. The shortfall does not need to be available at the time of exchange, however you will need to confirm with your solicitor that these funds will be available at completion.

Typically, once contracts have been exchanged, there will be a gap of between 7 and 14 days before completion. This period allows your solicitor to carry out a number of tasks on your behalf including conducting any pre-completion enquiries they may wish to raise, requesting the mortgage funds from your bank or building society and carrying out the relevant pre-completion searches, as well as preparing the legal transfer document.

There are also a number of tasks which you as the purchaser can carry between exchange and completion. As you will now have a fixed date for completion, you should now confirm arrangements for removal vehicles and any other help you may require on moving day, although it is advisable to contact a removal company prior to exchange of contracts and provide them with a rough date for completion, so you can be sure that they will be available when you need them. Your solicitor can give you an indication of when they would expect completion to take place. You should also ensure that you have agreed with the seller or their representatives for all meters at the property to be read on the day of completion. Furthermore you will need to remember to leave your forwarding address at your current residence and redirect any regular mail you may receive from your former address to your new address. It is also a good idea at this time to make arrangements for the transfer of your phone number, or, if you are a new buyer, arrangements for the installation of a phone at the property.

On the day of completion your solicitor will arrange for all appropriate funds to be transferred accordingly. They will also ensure that all documents relating to the conveyance are distributed correctly, by forwarding all your documents to you and all documents now belonging to the other party to them. Your solicitor will then deal with any outstanding matters such as registering the ownership of the property with Her Majesty's Land Registry or paying the Stamp Duty fee, if applicable.

Once you own a substantial asset such as a house is important that you make a will to ensure that the property passes to the person you want it to when you die. If you fail to make a will leaving your property to whom you wish, in the event of your death, the property would pass to whomever is entitled to your estate in accordance with the law. This is known as “intestacy”. If you allow your property to pass to your next of kin under the law of intestacy, there is a chance it may become the property of someone who you do not wish to be entitled to it. The rules surrounding the law of intestacy are complex and it is therefore a good idea to speak to your solicitor at the time of your purchase so that they can advise you on how best to proceed.

There are also several other good reasons for making a will, whether you are purchasing a property or not, including appointing guardians for your children (if appropriate) and providing for any family members, friends or charities you may wish to make a gift to when you die. You may also wish to think about the possibility of making a “living will” which gives directions on how you would wish to be medically treated if you become incapable of giving instructions yourself.

Whatever concerns you have in purchasing a property, BWL have the experts on hand to advise you. Our no-nonsense approach means that we are able to provide an effective service to clients in the shortest time possible. If you would like more information about the services we are able to offer then we would invite you to browse the services section of our website or contact one of our solicitors on (01792) 655178 or by e-mailing enquiries@bwl-law.co.uk

Richard Davies

Associate Solicitor