Purchasing a property, especially for the first time can be stressful and difficult to navigate. Knowing the key steps in the legal process can help you understand where you are and what needs to be done.
The process starts with your finances and ensuring your mortgage is in place and available prior to when you start house-hunting.
1. Budgeting and Mortgages
Before you purchase a property, it is essential that you have saved enough to afford the deposit, legal fees and other costs such as searches, surveys, stamp duty and Land Registry fees.
Equally important is having a mortgage that is agreed in principle. This means that you have contacted a lender or mortgage adviser, given details of your circumstances and have asked them to confirm a mortgage can be provided to you. A mortgage in principle is subject to the information you provide being supported by documentary evidence.
The condition of the property is important to consider as you may need to budget for immediate repairs.
2. Making an offer
Once you have found a property that you like, you can make an offer to the seller within your price point but also sufficiently attractive for the seller to accept. You can include details about your circumstances for example not being in a chain and wanting to complete quickly which can assist your offer.
Once your offer has been accepted, you should ask the estate agent to remove the property from the market. If the property remains exposed, there is a possibility that another buyer offers more that you have, and the seller withdraws. This is known as being gazumped.
3. Appointing a Conveyancing Solicitor
After your offer has been accepted, you should appoint a conveyancing solicitor. They will advise you on the process and take you through to completion. They will also confirm the likely costs involved in the house purchase process.
Your solicitor will ask you to provide proof of identity and source of funds information. Solicitors have a regulatory obligation to ask you for this information and will require evidence for both your source of funds (where the money is currently held) and source of wealth (how the money was accumulated).
If you are receiving a gift from a relative to help with your deposit, your solicitor will also ask them to provide proof of identity and source of funds/wealth due to their regulatory obligations.
4. Searches
Your solicitor will obtain and review searches to ensure that the property is not adversely affected. The searches include a local authority search which will for example reveal planning permission, other notices and whether the road is adopted.
A water and drainage search will reveal whether the property is serviced by a public water and drainage connection and unexpected charges. The environmental search looks at flood risks, contaminated land and nearby infrastructure projects.
The searches can help identify potential issues that could affect the value or marketability of the property.
5. Reviewing the contract and title documents
Your solicitor will review the contract and check the title documents for the property to ensure the seller has the right to sell the property. Properties can be subject to restrictions or covenants which your solicitor can advise you on.
6. Survey
Before finalising the contract, you should have a survey conducted on the property. This will help you establish an approximate value and indicate if significant repairs are required.
There are three main survey options available:
Valuation report – RICS level 1 survey
The most basic survey and suitable for properties in good condition or recently built. It will highlight any significant defects and identify urgent repairs.
Homebuyer report – RICS level 2 survey
This is a visual inspection which identifies potential issues, structural problems, damn and general condition of the property. This survey is suitable for conventional properties in reasonable conditions.
Building survey – RICS level 3 survey
This is a detailed inspection of the condition to identify defects, highlight areas of failure/concern, provide estimates of the costs of any works that may be required and recommend maintenance. You should consider this survey if you are buying a large, older or run-down property.
The more detail contained within a survey, usually the more expensive it is. There are other, more extensive surveys, however, a seller may resist these as they can be disruptive.
7. Building Insurance
Once you have exchanged contracts, you are obligated to buy the property. If you have a mortgage, you will need to insure the property from the date of exchange to protect against damage or destruction.
8. Reviewing, signing and exchanging contracts
Your solicitor will send a report with various documents for you to sign, the report will explain these documents and advise on the property. You will also be provided with a completion statement setting out the amount due from you in order to complete the purchase.
When contracts have been signed and you are ready to exchange, you will pay the deposit to your solicitor (usually 10% of the purchase price) and agree a completion date.
9. Preparations for completion
Your solicitor will arrange with your mortgage lender to draw down funds for completion and you will be provided with a completion statement showing the exact funds due from you. These funds need to be sent to your solicitor prior to completion.
10. Completion
On completion, your solicitor will pay the balance to the seller’s solicitor. Once funds have been received, your solicitor will let you know that completion has taken place. This is usually around mid-day. You can then collect the keys from the estate agent to move in.
11. Post completion
Your solicitor will pay the stamp duty and registry your ownership of the property with the Land Registry. They will also contact third parties, if necessary, for example a management company for a flat purchase.
Legal Advice for Residential Property
Seeking legal advice from a qualified residential property solicitor will ensure a smooth and legally sound home purchase.
A solicitor will conduct necessary searches, review contracts, and handle the transfer of ownership, protecting you from potential pitfalls such as hidden liabilities or boundary disputes. They will also ensure that all legal obligations, including Stamp Duty and Land Registry requirements, are met.
Choosing an experienced solicitor will give you peace of mind, knowing that your investment is secure and the transaction is conducted efficiently. For more information, contact Howell Jones Solicitors in Surrey.
