Purchase of a Freehold House Guide

Starting things off

After your initial contact with us we will give you a detailed written quotation showing our legal fees and the fees that we will need to pay out on your behalf during the course of the transaction. We will also send you a number of questionnaires which need to be completed by you. Your solicitor or conveyancer should also telephone you at this stage to introduce themselves.

How can you help us? – although the questionnaires are quite extensive, it would be very helpful if you could complete and return these to us as soon as possible.

Possible problems – any delay in returning the questionnaire documentation and quotes could cause a delay in our starting work on your case.

Case Tracking

As soon as your file is opened we will email you details to enable you to log in to our case tracking system. Our case tracking system enables you to look at the progress of your case and documents produced by us.

How can you help us? – we believe you will benefit from keeping in touch with progress by logging in to our system which may reduce the necessity of your telephoning for updates.

Possible problems – if you have any difficulty logging in to the system, the email we send you will have a troubleshooting number for you to contact.

ID/Client Care

After you have confirmed your instructions to us and returned the questionnaires we will send out to you a request for ID information and our Client Care Letter which sets out further details of our service to you. Both of these documents are compulsory under our professional rules.

How can you help us? – it is necessary for us to have appropriate ID documentation and the signed Client Care Letter on our files and it would therefore be of great help if you could return these documents to us as soon as possible.

As stated previously it is a professional rule that solicitors must have ID and Client Care information on their file and therefore the earlier you send these documents back to us the quicker we can proceed with your purchase.

Possible problems – any delay in returning documentation could delay the transaction. Also in a small number of cases there may be a discrepancy between the ID information and the names on the Land Registry record of the property which may require further investigation. If there is any such problem we will contact you immediately and in nearly all cases any such problems can be resolved easily.

Source of Funds

We will, during the course of the transaction, need to collect from you a deposit before exchange of contracts and then the balance of the purchase funds and costs etc. on completion. Unless you have advised us otherwise, these funds must come from a bank account in your own name. If the money is to come from another party such as a spouse, parent or other member of your family then you need to explain to us the full circumstances. In most cases of any third party payment we will need to reveal this to your lender if you are getting a mortgage and this may affect the amount of the mortgage or event prevent your mortgage taking place at all. This is of vital importance and if you are going to be paying in funds from a third party then you need to let us know immediately.

How can you help us? – You need to give us the full details of any contribution that is going to be made to your purchase by someone other than yourself. Any failure to do so may cause severe delays or problems later in the transaction.

Possible problems – if you are getting a mortgage a lender generally expects that all money being paid towards the purchase comes from you and not from a third party such as a parent etc. In some circumstances lenders may be prepared to accept a gifted deposit but they will need to know the full circumstances and give their written permission. In addition, the third party making the payment may want their money to be protected by means of a Declaration of Trust or other legal document and this will again need to be discussed as soon as possible.

Check your seller’s solicitor’s status

There have been a large number of scams recently involving counterfeit solicitors’ offices being set up. We will make the appropriate check to ensure that your seller’s solicitor is a properly accredited organisation.

Draft Contract

We will receive a contract package from the seller’s solicitors including a contract and other legal documents. We will read carefully through this package to ensure all the papers are in order and are in accordance with the instructions we have received from you. This is a point at which we carry out a thorough check of the seller’s title to ensure that the seller has the correct title to sell the property to you and that there are no problems in the Land Registry documentation.

How can you help us? – Occasionally once we receive the contract papers we may need some clarification from you relating to aspects of the property that may be unclear from the contract documentation. It would be helpful if you could make yourselves available to discuss any such queries as soon as possible.

Possible problems – when we go through the contract papers we do occasionally discover problems with the seller’s title or covenants relating to the property that may require further detailed investigation or in very rare circumstances may mean that you cannot proceed with the transaction. We will, of course, give you full details in the unlikely event that any such problems occur on your own purchase.

Our Initial Report to you

Once we have received the initial contract papers from the seller’s solicitors we will let you have a preliminary written report giving you some basic details of the documents received including a copy of the Land Registry documents relating to your property which will include a plan of the property and a copy of the Fixtures & Fittings form which shows the items that would be left at the property.

How can you help us? – If you see any discrepancy in the plan of the property compared to your understanding of the extent of the land you are buying then please notify us straight away so we can clear up any difficulties as quickly as possible. If you are making a separate arrangement to buy additional fixtures and fittings other than those included in the purchase price you should let us know so that the contract can be amended appropriately.

Possible problems – sometimes there are discrepancies on the plan of the property with some land that you thought you were obtaining or right of way that you thought you were obtaining not shown on the Land Registry documentation. This may mean that we have to raise additional enquiries with the sellers to get to the bottom of any potential difficulties.

Preliminary Enquiries

In nearly all cases when we receive contract documentation we will raise some enquiries about the property and the information supplied by the seller’s solicitors. These are usually fairly routine but sometimes they are more complex and may require several rounds of correspondence before they are all resolved.

How can you help us? – If we are raising detailed enquiries about your property please be patient because we are working to ensure that the documentation we receive will not give you any problems in your future ownership of the property.

Possible problems – there may be legal difficulties relating to the property such as breaches of planning law or discrepancies in the ownership of the property or difficulties with mortgages on the property. We are, of course, experienced in dealing with these matters and they will nearly always be resolvable although sometimes this will take time. We will keep you advised of the reason for any such enquiries.

Local Authority Search

Once we receive the contract we will contact you to collect from you sufficient money to enable us to submit a local authority search. This search is to find out whether any matters under the control of the local authority affect your property. Nearly always this search is clear but occasionally it may give rise to further enquiries to raise with the seller. We will send you a clear written report on the result of the search.

How can you help us? – When we contact you for a local authority search could you please make yourself available to pay us by credit or debit card as soon as possible to avoid any delays.

Possible problems – the local authority search may very occasionally give rise to further queries, particularly in connection with problems on planning permissions for extensions or other changes to the property. In addition the local authority search will give information only relating to the property itself and not to any other properties, even properties next door to you. If you are therefore concerned to see whether there are any planning applications in respect of nearby properties you may need to give us instructions to carry out an additional specialist planning search.

Mortgage Offer

If you are buying a property with the assistance of a mortgage we will receive a formal written offer of mortgage from your lender. You usually receive an identical document at the same time as us. We will need to read carefully through the mortgage offer and we will give you a detailed report on its contents and any special conditions relating to the mortgage offer.

How can you help us? – Sometimes there are delays in issuing mortgage offers and we may be under pressure from your seller’s solicitors to proceed but we will not be able to do so until the formal written mortgage offer is received.  In some cases we may ask you to speak to your mortgage advisor if you have one or direct to the lender if you do not, to chase the issue of the mortgage offer.

Possible problems – delays in issue of the mortgage offer can give difficulties with your sellers or their solicitors who are pressing for an exchange of contracts. If there are any discrepancies on the mortgage offer or conditions such as requirement for further investigations for damp etc. then these may need further investigation or inspection of the property.

Joint Ownership

If you are buying the property jointly with another person or persons then we will need to explain to you the different ways in which it is possible to own the property. We do this by means of sending you a report on joint ownership with a request that you advise us which of the various alternatives applies.

How can you help us? – When you receive our report on joint ownership you should discuss the matter with all the parties who are going to own the property and give us clear instructions. If you require further advice you need to contact us as soon as possible as we must have details of your instructions as to joint ownership before we proceed to exchange of contracts.

Possible problems – sometimes the joint ownership request we receive from you may be at variance with the mortgage offer and details of the joint ownership may sometimes need to be reported to the lender for their approval.

Purchase Report

Once all our enquiries have been dealt with satisfactorily by the seller’s solicitors and once we have received a satisfactory local authority search and your mortgage offer (if applicable) then we will prepare for you a final detailed report relating to the contract documentation and your ownership of the new property.  This will be sent to you with the contract to sign and copies of any other relevant documentation.

How can you help us? – You should read our report carefully as it is of vital importance that you understand the property you are buying and any conditions relating to its ownership. If you have any queries you need to raise them with us at this time as it will be too late to do so after exchange of contracts when no further negotiations or enquiries can be raised.

Deposit

In most cases when you are buying a property and not selling a property at the same time you will need to put forward a deposit of 10% of the purchase price.  This deposit needs to be paid to us by cleared funds (bank transfer) and once contracts are exchanged (see below) we will pay this money to the seller’s solicitors.  The deposit money is paid as a security for the contract and if for any reason you fail to complete the contract then the seller is able to forfeit the deposit.

Please bear in mind that this deposit money needs to come from your own resources not a third party unless you have already given us details (see “Source of Funds” above)

How can you help us? – Once we request the deposit money from you please pay it promptly to our account, details of which will be provided to you.  It is important that the deposit comes from the party that is buying the property and not from a third party.  If it comes from a third party such as a relative then this can cause serious complications which may mean that we need to report this fact to your lender or we need to do other documentation such as a Declaration of Trust to reflect the rights of the party paying the deposit.

Possible problems – any payment from a third party other than the person who will own the property can cause serious delays and complications in the transaction particularly if you are getting a mortgage.  It is not possible for us to accept payment of deposit in cash or by cheque.  It must be by means of a bank transfer.

Exchange of Contracts

Once you have signed the contract and returned it to us together with any required deposit and once you have agreed a completion date with your seller or through estate agents if you are not in direct contact with your seller, then we are able to exchange contracts on your behalf. This is a process that we enter into direct with your seller’s solicitor. Exchanging contracts means that the agreement to purchase the property is legally binding and if you fail to complete the transaction then as stated previously you will lose your deposit and may suffer other financial consequences.

How can you help us? – Once we are ready to proceed to exchange of contracts you should try and fix a completion date suitable to you and your seller as soon as possible and notify us of the date you have agreed.

It will become your responsibility to insure the property that you are buying from exchange of contracts (not completion).  You should therefore make sure that you have insurance ready to put in place as soon as contracts are exchanged.

It may be wise at this stage when you realise that exchange of contracts is imminent to arrange a final appointment to view the property to ensure that the property is in the same condition as when you first viewed it and there has been no damage or other problems.

Possible problems – problems and delays are often encountered by failure to agree a completion date and there is very little we can do to assist with this problem as the parties to the transaction must themselves work out a date which is suitable to both of them.  It is also often a great source of frustration that you and your seller may be ready, willing and able to proceed to exchange of contracts with an agreed completion date but other parties in the chain of transactions may not be ready.  Generally all the transactions in a chain need to exchange and complete on the same day and therefore you may be unavoidably delayed due to circumstances beyond your control and beyond your seller’s control. Unfortunately there is nothing we can do to assist you with such problems and this is all part and parcel of buying and selling property under the present conveyancing system.

Simultaneous Exchange and Completion

Sometimes because of a number of reasons including, for example, mortgage offers running out, it is required for exchange of contracts and completion to be simultaneous. This means that you need to agree a completion date in advance of exchange of contracts and all the work carried out by us that is generally dealt with after exchange of contracts is dealt with prior to exchange of contracts.

How can you help us? – A simultaneous exchange and completion is inherently risky and our advice to you is not to do it unless it is absolutely unavoidable.

Possible problems – the main problem with a simultaneous exchange and completion is that you will be expecting to complete the transaction on a certain date but that you will not have the backing of a legally enforceable contract and it would be possible for the other party to the transaction or someone elsewhere in the chain to change their minds which would mean the transaction would not go through and you would only get this information on the date proposed for completion.  This could obviously produce considerable inconvenience and financial loss including payment of removal fees etc.  Again, our advice is not to enter into this type of arrangement unless it is absolutely unavoidable.

Sign Mortgage Deed

We will, if you are obtaining a mortgage to buy your property, send you the Mortgage Deed prior to completion. This is the formal document from your mortgage lender and must be signed and returned to us before the transaction can be completed.

How can you help us? – Please return this critically important document to us as soon as possible.

Financial

We will as soon after exchange of contracts as possible prepare a financial statement setting out full details of the financial transaction including the purchase price, legal costs, stamp duty and Land Registry fees and giving credit for any deposit or other monies you have paid together with the money received from any lender.  This statement will be sent to you with a request for you to send any balance due to us by bank transfer to our bank account.

How can you help us? – If you have any queries regarding the financial statement please contact us as soon as it is received. It is vital that you send the funds to us by bank transfer as soon as possible as without the funds we will not be able to complete the transaction on your behalf which may give rise to substantial financial loss.

Completion of Mortgage

We need to collect the mortgage money from your lender if you are getting a mortgage to assist you in the purchase of the property. In order to do this we need to provide the lender with a report on title which is a document signing off the legal paperwork and confirming it is safe for them to proceed. The mortgage company will then send the mortgage monies to us, usually the day before completion.

How can you help us? – On very rare occasions the lender may raise last minute queries relating to the release of the monies and it may be that we need you to contact the lender urgently.  If you receive such a request from us it is essential that you deal with it as a matter of the utmost urgency as any delay in receipt of mortgage funds could delay the transaction and put your finances at severe risk.

Possible problems – sometimes in our experience there are delays in mortgage monies being sent on the day of completion which is why we always ask for the mortgage monies one day in advance to save any delays.  Although we will chase the mortgage company up, if money is received late it may be that we will request that you also contact the lender.

Final Searches

Immediately before completion we carry out a final search against the Land Registry title of the seller and if you are obtaining a mortgage we also need to carry out a bankruptcy search against you.  This is a requirement of all lenders.

How can you help us? – If you have had any insolvency problems in the past you should tell us immediately so we can carry out a precautionary search at an early stage.

Possible problems – if the bankruptcy search against you  reveals entries it may cause severe problems in obtaining completion of your mortgage which could have grave financial consequences for you.

Completion of Purchase

On the day of completion we send the balance due to your sellers for the purchase of the property to the seller’s solicitors by same day bank transfer. When the seller’s solicitors receive the money they should contact the seller or the seller’s estate agent to request that the keys are released to you.

How can you help us? – Very occasionally and usually due to delays elsewhere in the chain there may be some delay in our receiving the money to send to your seller.  You should ensure that your telephone is available for us to contact you in case of any emergencies on the day of completion.

Possible problems – delays in the chain of transactions may mean that we need to negotiate access for you on the day of completion with the seller’s solicitors.  If you have any difficulties in accessing the property on the day of completion you should contact us as a matter of urgency.  It is also a good idea to have a viewing of the property immediately prior to completion to ensure that the property has not been damaged or vandalised before completion.

Registration of your title to the property

Following completion of the transaction we will register your title to the property with the Land Registry and will forward a copy of the new Land Registry documentation showing you as the owner, to you and to your lender if you obtained a mortgage.