Everything you need to know about conveyancing
In this article we will go over everything you need to know about residential conveyancing. What is it, how long it takes, the stages, how much it costs and much more.
So, what is it?
What is residential conveyancing?
Conveying refers to the legal process of buying and selling a property. Residential conveyancing simply refers to any time a house is bought or sold whereby the property is for living purposes. If the building is used to business or other uses then the process is know as commercial conveyancing.
All types of conveyancing involve a contractual title of the property from one owner to another and the process is completed by a conveyancer or property solicitor.
What is the conveyancing process?
The process all begins when an offer on a house has been accepted and it finishes once you have received the keys.
On average, the process takes between 8 and 12 weeks but depending on the circumstances of the property and whether or not there is a chain (we’ll cover chains later), the times can vary greatly.
The transfer of a property from one person to another is a complicated legal process and should be carried out by a property solicitor or conveyancer who understands the process.
Below, we outline the process from once you have had an offer accepted on a property.
Get a quote – So you’ve had an offer accepted? Now it’s time to get things moving. Talk to a solicitor and you will be supplied an initial quote.
Memorandum of Sale – once sale is agreed the estate agent supplies the memorandum of sale to both parties.
This provides all the details of the transaction and allows the solicitors to start processing the transaction.
Open the Purchase File – Now the solicitor has the greenlight the will start the process. The conveyancer will open the purchase file for your new property and send you a letter to explain the terms of business, request items such as ID and get evidence of source of funds.
In addition, you will complete a purchase questionnaire allowing you to raise any queries you have regarding the property. At this stage, you will be given a fixed fee estimate based on the information provided. The cost can change if the legal work becomes complicated.
Contracts – Once the file has been opened and all of the documentation required has been provided your solicitor will draw up a draft contract from the seller’s solicitor.
Contract pack – The contract pack will be made up with the following documentation:
- Draft contract
- Office copies and title plan
- Property Information Form (information form completed by seller about the property)
- Fittings and Contents Form (form completed by seller confirming what will be left at the property i.e, cooker/washing machine/beds etc)
- Energy Performance Certificate (EPC)
- Any supporting documents such as warranties, guarantees, planning permission and building regulations.
- If Leasehold, there will also be a copy of the Lease as well as key information from the Landlord.
Title check – on receipt of the contracts your conveyancer will check all documentation to make sure nothing is missing and there are no problems with the title.
Conduct Searches – This is a vital part of the conveyancing and property search process. The searches done on most properties are as follows:
- Local search – this search confirms if the road at the property is maintained by the local authority or if it is private. It also confirms any planning/building regulations applications amongst many other important things.
- Drainage search – this search confirms if the drains are maintained by the water board or are private. It also confirms the location of water/sewage pipes.
- Environmental search – provide details of the property and surrounding areas in relation to possible contaminated land and flooding amongst other issues.
- In Yorkshire a Mining search is often required.
Mortgage offer – if you’re using a mortgage to fund your purchase then your solicitor will need to check that all the details on the mortgage offer are correct and deal with the lenders standard and special conditions.
Provide Expert Legal Advice – Throughout the process your conveyancer will provide expert legal advice and raise queries on not only the title to the property but also in relation any of the searches carried out.
Normally, there aren’t too many major issues but sometimes the searches can bring up issues that need sorting and sometimes this will lead to you negotiating with the seller.
As an example, if your searches reveal asbestos in a property, you may negotiate with the seller to either pay for it to be removed before completion or to reduce the sale by the cost of having it removed.
Stamp Duty Payment – The conveyancer will calculate and pay the stamp duty bill on your behalf. Normally this will be added onto the fee you pay once the sale has gone through, however you may wish to pay for it as it is being done.
Collect & Transfer Funds – The conveyancer will ask for your deposit being 10% of the purchase price and will arrange to transfer the funds to the seller’s solicitor on completion.
Exchange of contracts – once your conveyancer is satisfied that all queries and issues are resolved on your transaction you will be asked to sign the contract documentation.
Once exchange happens, you will formally agree to the completion date with the seller and the completion date is fixed. At this point the contract is legally binding and neither party are allowed to pull out. However, either party may choose to withdraw at any point until exchange.
Exchange and completion can be on the same day as exchange or there can be an agreed amount of time between exchange and completion to allow for either party to make arrangements, such as sorting a van or removal company for their furniture.
Completion –Hooray! Upon completion you will receive your keys and the property is officially yours. Your conveyancer will ensure that mortgage funds are drawn down in time for completion and you’ll be able to collect the keys from the estate agent when the funds have been received by the seller’s solicitor.
You will also need to pay your solicitor upon completion, and they should send you a bill on the day or shortly after completion. Please note this may vary from your original quote depending on whether additional work was carried out
Post Completion – once completion has taken place your conveyancer will apply to HM Land Registry to register your ownership of the property. This will take several months after completion.
What is a chain?
A chain simply refers to when there are several parties waiting for a sale for their purchase to go through, which can have a knock-on effect in the sale of their property, forming a chain.
Below is a brief example of a 3-person chain.
Person A – (Awaiting newbuild that they’re buying to be ready – selling to Person B)
Person B – Waiting on Person A’s newbuild to be ready so they can move into the house, selling their house to person C but need funds from sale for their purchase.
Person C – first time buyers, waiting on Person B to vacate property before moving in.
As you can see, the delay in the newbuild being ready has meant that a chain has formed. When this happens, completion is normally set for a date and all properties and members of the chain will complete on one day.
The delays are normally caused because people require the sale of their current property to fund the house they’re buying and don’t have alternative living arrangements whilst they wait for their new home.
How much deposit do I pay?
The norm is that the deposit is 10% of the purchase price, however if you cannot afford 10% you may be able to negotiate a smaller fee. However, deposits less than 5% are highly unlikely.
Often the deposit received on the sale is passed down the line of purchases (which in many instances will be less than 10%). It may be difficult to negotiate a deposit of less than 5%.
How long is the process?
The time it takes for the process to complete will vary from property to property. There can be complications that arise which may mean more work is required but as a rough guideline you should expect the process to take somewhere between 8 and 12 weeks with no complications.
What is the difference between leasehold and freehold?
If a property is a freehold, it means that you own the property and the land which it sits on whereas with a leasehold you own the property for a fixed period (term of the lease) but not the land it sits on.
Flats will often be leasehold properties due to you now owning the ground or building that the flat resides in. The lease can be seen as an agreement in which you “rent” the property you own in the building on land it sits on and will not be able to make changes to the land without the permission of the landlord – for example, you wouldn’t be able to change anything outside your boundaries, such as the outside of a block of flats, the garden and corridors etc.
How much are conveyancing fees in the UK?
Conveyancing fees will vary depending on the property.
Factors that will influence the price include:
- The sale price
- Whether it’s a new build
- If it’s a leasehold
- Whether you’re buying or selling
The fees for selling are usually lower due to you not having to pay for the searches to be carried out.
If you’re thinking about moving and would like a quote from us – you can get one using the quote calculator below or get in touch with us.
Why is conveyancing for new builds more expensive?
Often the fees for new build conveyancing are more expensive than regular properties. This is because if you’re buying a new home there is additional work that needs to be done to register the property.
When do you pay the fees?
You will usually pay your conveyancing fees upon completion. Once you have the keys you can expect your bill to come through within a couple of days but usually the bill will come through on the same day.
If you’re selling and not purchasing a new property, the solicitor may take the fees out of the equity before sending any outstanding balance to you.
Who decides the completion date?
Often completion is negotiated between the buyer and seller. Your solicitor may ask when you wish to complete and if the other party agrees then you can move forward, however sometimes they may need more time to make arrangements and so the final date is negotiated between the two parties.
If you’re in a chain, things often become more complicated as the date will often have to be agreed with everyone in the chain.
What is a survey and do I need a survey?
A survey or Home Buyers report is a highly recommended part of any house purchase. The survey will give you an overview of the property, so you know that there are no issues and if issues are found, you may be able to renegotiate on the price.
Whilst some buyers are content to do that themselves or to have it looked over by a builder, in most cases buyers arrange for properties to be inspected by a professional surveyor.
How long do the surveys take?
The surveys will be carried out by a third party that have been instructed by your solicitor and you can normally expect these to be back with your solicitor in 2-3 weeks depending on the availability of the surveyors.
What is gazumping and can I have a lock out agreement?
Gazumping is when someone comes in with a higher offer than that which has already been accepted and therefore succeed in acquiring the property. This can be extremely frustrating if you have started the process of getting searches done and have instructed a solicitor.
To avoid a property being taken from under your nose, you can ask for a lockout agreement. This is an agreement where the future sale of a property between buyer and seller will take place if the sale is completed within a certain time period.
Common issues with conveyancing
There are lots of issues that can come up when going through the conveyancing process, some of them are much easier to resolve than others, whilst some can lead to long delays or even one party to withdraw.
Some of the most common issues we see are:
- Issues with the property – often found during searches
- Delays in returning or missing paperwork about the property
- Funding delays, for example a mortgage offer expiring
- A broken chain – Often chains rely on all sales to go through and if someone withdraws it can have a knock on effect for all parties.