Buying residential property – The process explained

In the second of our series of articles about buying property in England, Residential Property Partner, Alison Treble explains the process from start to end of purchasing a home.

Purchasing property, whether freehold or leasehold will involve two main stages – Exchange of Contracts and Completion. On average the process of purchasing a property takes between 8-12 weeks but this can vary particularly if there is a chain involved. While solicitors are used to coordinating multiple chains sometimes delay is out of their control as they focus on protecting you and your investments.

Stage 1: Exchange of Contracts

  • When you have found and made an offer on a property you wish to purchase, you need to instruct a solicitor to act for you and ensure you have your funding in place.
  • Your solicitor will require you to provide source of funds information as well as proof of identity and proof of address as part of the Anti-Money Laundering checks.
  • After your offer has been accepted by the seller, the seller’s solicitors will send your solicitors the contract, a copy of the documents evidencing the seller’s ownership, and replies to any enquiries about the property you may have asked. If the property is a flat, the seller’s solicitors will also provide a copy of the lease and information about service charge and buildings insurance.
  • The pre-exchange stage is probably the most important part of the entire process as up this moment both you and the seller can change your mind and withdraw. In England, it is the buyer’s responsibility to investigate the property that they are buying to ensure it is suitable for their needs and that there isn’t anything which would adversely affect their enjoyment of it. It is advisable to arrange for a survey to be carried out on the property to check the physical condition, which will reveal if there are any structural defects or other issues at the property.
  • To assist you with your decision on whether or not to buy a property, your solicitor will review the title documentation and carry out searches on the property with various authorities and then prepare a report in which they will highlight any issues relating to the property.
  • The searches will reveal whether the property is connected to mains water and public sewers, the ownership of the road giving access to the property, any environmental or planning issues affecting the property.
  • If you are happy to proceed with the purchase and both parties have approved the contract, you can instruct your solicitor to proceed to exchange of contracts.
  • You and the seller will each sign one part of the contract and you will pay a deposit to the seller, which is usually 10% of the purchase price.
  • Up until the moment of exchange of contracts, both you and the seller can withdraw from the transaction, with each party bearing his or her own costs. If you withdraw from the purchase at this stage, as the buyer you are likely to lose any reservation fee paid.
  • Once exchange of contracts has taken place, a legally binding agreement is created. Both you and the seller must complete the transaction on the agreed completion date. If you fail to complete the purchase, you could lose your 10% deposit.
  • Before you instruct your solicitor to proceed to exchange, you should ensure that your finances are in order for completion. If you are obtaining a mortgage, you must ensure that the mortgage funds are available for completion, or you have alternative funds available to enable you to complete on the agreed completion date.

Stage 2: Completion

  • The completion date is agreed as part of the process of the exchange of contracts and inserted in the contract. The completion date is usually two weeks after exchange of contracts, but this is flexible and it is also possible for exchange of contracts and completion to take place simultaneously.
  • On the completion date you must pay the seller the balance of the purchase price and you must provide your solicitors with sufficient funds to pay Stamp Duty Land Tax (SDLT) and Land Registry fees.
  • Completion will take place when the seller’s solicitors confirm receipt of the completion funds and they arrange for the keys of the property to be released to you.
  • Following completion, the seller’s solicitors will send the seller’s signed transfer deed to your solicitor. Your solicitor will pay any SDLT due to HMRC on your behalf, apply to register the transfer deed at the Land Registry and ensure any mortgage is registered against the title of the property.

If you are planning on buying or selling a residential property, it is important to appoint a specialist residential property lawyer to act for you to ensure your interests are protected. Get in touch today with our Residential team on 01225 750000 or email and let us help you get moving today.

Mogers Drewett

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