The Purchase Process

Explained

Important¢ You buy the property as seen, with all its hidden defects and faults.

If you aren't given a guarantee or warranty for something, then none is given

¢ If you are having a mortgage, the lender will have a Mortgage Valuation carried out. However, this is not a survey and you cannot rely upon it to make your decision to proceed. If you are in any doubt or have any concerns it is your responsibility to arrange your own survey

¢ Guarantees and warranties for works carried out to the property do not automatically pass to the buyer. You must make your own enquiries as to whether a guarantee or warranty can be transferred, or if the company which did the work even still exists

¢ You must not confirm a completion day with your removal company until contracts have been exchanged

¢ You must not treat any suggested completion date as fixed, regardless of whether all parties have agreed to it, until exchange has taken place

¢ Once contracts have been exchanged you cannot change your mind as the completion date is then legally fixed

Anti-Money LaunderingUK Government Regulations mean all new clients must prove who they are before we can deal with your matter which means we will have to carry out an identification check on every client.

We offer you two options:

¢ you provide original documents¢ we carry out an electronic identity check

Full details of these options will be sent to you with your initial pack of paperwork.

In addition, we are also required to verify the source of any funds you are putting into the purchase. We will therefore ask you to provide us with an explanation of where the funds have come from, and for evidence to be provided. This includes if you are being gifted funds from anyone so you will need to make them aware that they will have to do this as well as provide their own proof of ID.

If you are receiving money as gifts, and you are having a mortgage, you will need to ensure that your lender is aware and approves of the gifts.

TimescalesIn all honesty, no one can say for sure at the outset how long a purchase will take. If you don’t need a mortgage, don't have anything to sell, and the seller isn’t buying, then we would consider it reasonable for completion to be relatively quick. However, unforeseen issues with the properties legal title, for example, can cause delays.

Delays can occur for a number of reasons. Common examples would be things such as incomplete information, a lengthy mortgage application process, complications in the legal title of a property, long chains of sellers and buyers, disagreement between parties in a chain on completion dates, or people simply changing their minds.

Due to the regulations we have to comply with, we cannot speak directly to the other parties in a chain, only to the Conveyancer representing the parties on either side of your transaction. However, Estate Agents are not bound by the same restrictions and they are often much better placed to keep you informed as to what is happening up and down the chain. It is important that if you are made aware of any time scales, issues or delays in the process, from the Estate Agent or your buyer, that you pass that information on to us promptly. Please don’t assume that we will automatically be advised.

Whilst we will always do everything we can to achieve desired dates, you must be aware that until all the legal issues have been resolved, and everyone in the chain has officially confirmed they are ready, no dates should be taken as agreed (regardless of what anyone might say to you) and you should not make any firm arrangements as that will likely lead to wasted time and money. For example, by all means make provisional arrangements with a removal company, but do not confirm anything with them until we have confirmed to you that you have exchanged contracts.

Once dates have been agreed, we will need to speak to you on the day of exchange to confirm that you are still happy to proceed. Even if you have previously given your authority, we have to have spoken to you on the day to ensure your circumstances haven't changed, so it is important that you ensure we have a valid and working contact number for you as not being able to get hold of you will prevent us from exchanging.

About The PropertyThe seller must make an Energy Performance Certificate (EPC) available to you which tells you how energy efficient a home is on a scale of A – G. You must ensure that you see this before exchange of contracts.

Other than this, the seller does not have to give you any information about the property, for example, it’s structural condition, if the water, drainage, heating, lighting or electrical systems work. You buy the property as seen. After the day of completion you will be responsible for all repairs, even if it needed doing before completion, so do not rely on any assurances given by the seller and do not assume that the conveyancing process will uncover such matters. Bear in mind, even if the seller has something repaired or serviced, that is done for the seller, any guarantee or warranty may not pass to you.

The seller will fill in a Sellers Property Information Form. This is a standard form which asks for information the seller would know about the property. You must check all of the answers are what you expected and must let us know if you have any concerns about any of the answers.

If you are buying a repossessed property or a property in which the seller has never lived, you will need to take extra care to satisfy yourself because very little information will be forthcoming.

We would always recommend that you have a survey carried out to reduce the risk of unexpected repair bills after the day of completion, but this is not mandatory.

If you decide to have a survey, you should discuss your requirements and concerns with your chosen surveyor.

About The Property Continued

Contaminated Land

A local authority can clean up land which is so contaminated as to cause death, disease or serious injury to health, at the homeowners expense.

Contaminated land may have a detrimental impact on the re-sale value of the property, or make it more difficult to sell as well as the potential affect your health.

We will carry out an environmental search against the property if you are having a mortgage, if not then whilst we recommend you have once carried out, the choice is yours. The search will identify any potential issue and you will be provided with a copy prior to exchange of contracts.

Flooding

The risk of flooding seems to be increasing and the environmental search will provide some information about flood risk.

If you have concerns about flooding, ask your surveyor. You can also contact the Environment Agency by telephoning 0845 988 1188, or on the internet at www.environment-agency.gov.uk

If, following your enquiries, you believe that the property is at risk from flooding, tell us and inform your buildings insurer.

Contents of the property

We will provide you with a form completed by the seller that details what is included, excluded, or for sale separately. Tell us if this is different from what you expected because it will form part of the contract.

Owning Your Property

Property rights

We will tell you about any rights which you as owner can exercise over neighbouring properties and any rights which neighbouring owners enjoy over your property. In addition, we will tell you about any restrictions which can limit what you can and cannot do as owner of the property.

Plans

In any purchase, we will not have seen the property. It is therefore vital that you carefully check the plan we send you from the seller which indicates what they are selling you to ensure it matches what you are expecting.

New Build Property

If, when we come to exchange contracts, the property is not complete, the date of completion will not be fixed. It will be a date to be notified by the builder, giving you a fixed amount of notice.This does mean that you may have to notify your chosen removal company that you may not give them much notice of the completion date.

You must satisfy yourself in respect of property specifications, landscaping, the progress of building work, any extras, the route of services to the property and arrangements for connection, and the final pre-completion inspection of the property.

You must inspect the property before the completion day and notify the builder in writing of any work you feel is unsatisfactory or incomplete. Completion may not be delayed if there is any minor outstanding work.

Owning Your Property Continued

Leasehold properties

When buying a leasehold property you need to be aware that you will have a landlord and you may have to pay an annual ground rent and a service charge.

We will tell you how many years the lease has to run. The lease will tell you about any rights which you as owner can exercise over neighbouring properties and any rights which neighbouring owners enjoy over your property. In addition, we will tell you about any restrictions which can limit what you can and cannot do as owner of the property and what your responsibilities are.We will point out those parts of the lease which we feel are important but you should read the lease for yourself before exchange of contracts and ask us if there are any aspects of the lease that you do not understand.

If you are buying a flat, you may have to make a payment in advance to cover ground rent and service charges on the day of completion. There may be costs associated with serving notice on the landlord of the change of ownership.

If you are buying a newly built leasehold property we will send you the lease to sign instead of a transfer.The lease confirms the details in the contract and describes what is being sold to you, and at what price.

Local Authority Search

The Local Authority search tells you what the local council knows about the property you wish to buy. It can reveal information which may affect your decision to buy the property. It does not tell you about any future plans for development on neighbouring properties. You must make your own enquires of the local council about this.The local authority search will reveal if the local council are taking enforcement action because of a failure to comply with building regulations or planning control. Even where the local council are not taking enforcement action, and all consents and approvals were obtained, we recommend you still check, by instructing a surveyor, that any building works carried out to the property are structurally sound.

Owning Your Property Continued

Other searches

If you are having a mortgage, we will carry out a water and drainage search. If you aren’t having a mortgage then whilst we recommend that you do have this search, the decision will be yours.Depending on the property, it may be necessary to carry out additional searches, for example coal mining. We will only highlight things revealed in the searches which we feel might affect your decision to buy the property. It is your responsibility to read the searches provided to you and satisfy yourself.

Buildings Insurance

You must ensure that buildings insurance is in place on exchange of contracts. Therefore, you must make provisional arrangements well before exchange of contracts. If you are buying a leasehold property we will tell you if the landlord arranges the buildings insurance.

Life Insurance

We recommend you discuss life insurance cover with a financial adviser well before exchange of contracts.

Title Deeds

Once completion has taken place we will register you as owner of the property at the Land Registry. This can take some time to complete.The Land Registry no longer issue title deeds as such but only a copy of the Register will be sent to you following successful registration. In addition we will send any other documents we hold in respect of the property which you will need to keep in a safe place.

Forms

Terms of Engagement

When you sign the Terms of Engagement you are agreeing to our terms and conditions. You will be giving us authority to make certain binding promises to other parties in the chain, which are necessary to make the conveyancing process work. Those promises, once made, cannot be broken. You are also agreeing to us disclosing information to third parties within the Council for Licensed Conveyancers Rules and under the Data Protection Act 1998.

Adult Occupiers

If you are buying with a mortgage, any non-owner adult occupiers will have to sign a document to confirm that they have agreed to leave if you fail to pay the mortgage and the property is re-possessed.

The Contract

The contract, also known as the agreement, details what you are buying, the price, and the seller. You must tell us if any of the details in the contract are incorrect when you receive it. You will be sent the contract ahead of exchange of contracts, to sign in readiness. Until contracts have been exchanged the contract is not binding and is not a guarantee that exchange will take place, it is just a step in the preparations. You must not date the contract.

The Transfer

The transfer confirms what is detailed in the contract. It describes what you are buying and the price. It is the document which will transfer ownership of the property on the day of completion. We will not be able to complete without the correctly signed transfer regardless of whether we have exchanged contracts. You are the transferee and the seller is the transferor. You need to sign the transfer in front of an adult witness. The witness should not be a member of your family or involved in the transaction, for example, a neighbour or work colleague. After you have signed the transfer, your witness should then sign, and also write in their name and address. You must not date the transfer.

Forms ContinuedThe Mortgage Deed

This is your written agreement with your lender.You will be asked to sign the mortgage deed in readiness for the completion day. Signing the mortgage deed before the completion day does not mean that you have taken out the mortgage.We cannot complete without a signed mortgage deed and it will be at your risk if you instruct us to exchange without it.The requirements for signing the mortgage deed are the same as the transfer.

The Lease

If you are buying a newly built leasehold property we will send you the lease to sign in place of the transfer. You will be asked to sign the lease in readiness for the day of completion but that does not mean that the exchange of contracts will happen or that you have bought the property. The requirements for signing the mortgage deed are the same as the transfer.

Funds

The Deposit

On exchange of contracts a deposit of 10% is due to the seller, although the seller will often accept less. If you fail to complete the seller can keep any deposit paid and you are then responsible fo paying any balance, so that the seller receives the full 10% as compensation.If you are selling and buying, any deposit we receive on your sale may be accepted as the deposit on your purchase. If you do accept less than 10% on your own sale and the matter falls through after exchange you will have a claim against your buyer for the balance up to 10%. But if the buyer does not have the additional money, disappears or is of little financial worth you may never recover the balance, this does not affect your own seller’s right against you for any balance owed to them.

Completion Funds

Near to completion we will send you details of the money we require from you, and usually include a draft statement to show you how the figure has been calculated. You must check the statement carefully and notify us if there are any errors or omissions. You will need to send the money to us as cleared funds in time for the completion day. The best method of sending cleared money to us is by a direct bank transfer to arrive on the day before completion to avoid any potential delays in the money arriving through the banking system. Your bank may charge you for sending the money to us.If you have not let us have the amount of cleared funds asked for, in time for the completion day, you will not be able to move into your property on the completion day and you may incur penalties and costs.Mortgage lenders need up to seven days notice of the completion date in order to get the completion funds to us. If any less notice is given then there are no guarantees that the funds will arrive in time for completion. It often means that if the lender consents to release funds with short notice the funds may arrive late on the day of completion which can also lead to you incurring penalties and charges.We always ask your lender to send the money to arrive the day before the completion day. This reduces the risk of the money arriving late or not at all on the completion day. However, most lenders will charge you interest from the day the money is sent to us.

Mortgages

You must carefully read your mortgage offer, and ask your lender, mortgage advisor or us if there is anything you do not understand.You must ensure that the amounts match what you are expecting, including any penalties or charges. Remember, the amount your lender will send us will be less any deductions detailed in your mortgage offer.When you take out your mortgage you are agreeing with the lender to maintain regular monthly payments and to keep the property in good condition and adequately insured. If you fail to keep your agreement with the lender they are permitted to sell your property to pay off the mortgage loan. If the lender sells your property for less than the mortgage loan, you are still responsible for clearing any outstanding debt.

If you are also selling, you should note that it is not possible to transfer a mortgage to another property, you would have to apply for a new mortgage even if the details are the same. In some cases you can transfer or port a product from an existing mortgage to a new mortgage with the same lender, and your mortgage advisor or lender can usually advise you in this respect.

It is usual for your first mortgage payment to be different from your normal repayment, as it is calculated from the date funds are released, which means your first payment may be higher than you expect.If you have concerns about the amount of your payment, check with your lender.

In respect of the date on which you pay your monthly mortgage payment, each lender has their own criteria, so it is best to discuss this with the lender or your mortgage advisor.

Exchange

Exchange of Contracts

Once contracts have been exchanged, you have legally bought the property. Exchange of contracts is carried out on the telephone by us and is binding on you once it has taken place.Your deposit will usually be sent to the sellers conveyancer on exchange of contracts.Should either the buyer or yourselves decide to withdraw from the transaction after exchange, there will be substantial financial penalties and costs payable by the party who withdraws. Therefore, we cannot exchange contracts until you have confirmed that you consent to this. We must speak to you on the day of exchange to obtain your agreement, regardless of whether you have previously given consent. If you are selling with another person we will obtain this consent from only one of you unless we believe it would be in your best interests to speak to all parties or you have given us your specific instructions to speak to all parties. On exchange of contracts the completion day is fixed. We will let you know once contracts have been exchanged, after which you can then confirm the completion day with your removal company, and arrange final bills for household services and council tax.If you are in rented accommodation, you should give notice to your landlord once you have exchanged contracts. Do not give notice to end your tenancy before contracts have been exchanged, as this could make you homeless.

Balance of Money

If there is any money due back to you once all fees and expenses have been paid, you will be given the option of how you wish us to send those funds to you. However, we will only pay it to the purchasers own UK bank account, by bank transfer. We no longer issue cheques for these funds. We will not make payments to third parties on your behalf.

Completion

Completion dates

Completion must take place Monday to Friday. You cannot complete at the weekend, or on a bank holiday as the banks will not transfer money on these days. You should try to pick a completion day giving at least one week between exchange of contracts and completion to give you more time to finalise your arrangements. It also ensure that we have sufficient time to get everything in place ready for completion.

Exchange and complete on the same day

Referred to as simultaneous exchange and completion. Whilst it is possible to do this we have to make you aware of the risks before you instruct us to do this. As there is no legal commitment until exchange of contracts there is no certainty that completion will take place, either on that day or, in the worst case, at all. You may have made arrangements for time off work, for the delivery of furniture, booked removals, packed your belongings, but there is a risk that despite everyone agreeing the date, something goes wrong which prevents it happening.

Completion

Completion occurs when your sellers conveyancer receives the sale proceeds from us. Your seller must then move out of the property and allow you to move in. As a guide, they should aim to be out of the property by 12 noon. They must leave the property clean and tidy, and free of any rubbish. Any damage cause by moving out, or removing items from the property that aren't included in the sale must be repaired by them. Anything they have agreed to leave or sell to you must be left in the property. It is important you check the property carefully and notify us of any issues immediately.

Keys

On the day of completion it is usual for the seller to hand the keys into the estate agents for you to collect. Keys will not be released to you until the seller’s conveyancer has received all the purchase money from us.

Instruct a Conveyancer to act

Receive initial paperwork from ConveyancerComplete the paperwork and send it backPay funds on accountProvide proof of the source of funds beingused

Replies to enquiries receivedReplies checked and queried if necessary

All funds received

Searches arrive and are checked by theconveyancerAdditional searches raised as necessary

Contract pack received from sellersConveyancer

Conveyancer checks through contract packInitial enquiries raised

Searches are ordered

Signed paperwork and deposit received byConveyancer

Completion date arrivesFunds sent to sellers ConveyancerCompletion takes place

Completion date agreed by all parties in thechain

All parties in the chain ready to exchangecontractsContracts exchangedCompletion date is now legally binding

Mortgage Advance requested from LenderBalance of funds requested from buyer

Conveyancer reports to buyer on theSearches

Conveyancer reports to the buyer on theTitle with the contract for signatureDeposit is requested as required

Buyers ownership is registered atH M Land RegistryConfirmation of registration is sent to buyer

Mortgage Offer arrivesMortgage offer checked through

Conveyancer reports to buyer on theMortgage Offer

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All enquiries satisfactoryAll searches received