What is conveyancing? A guide for buyers and sellers
Put simply, conveyancing is the process of transferring ownership of a property. Anyone who has bought or sold a property in the past will know that the process can have hiccups and some stages can take longer than anticipated.
Working together with solicitors, mortgage brokers, the seller and the buyer, a selling agent is there to ensure the process is as smooth and stress free as possible for all parties involved.
The two stages that are worked towards are exchange of contracts and completion of the sale. There is a fair amount of work to be carried out before these stages can be reached.
What are the steps in conveyancing?
The process of buying a property should be straight forward but it can be a winding path that causes both buyers and sellers confusion, there are several key steps in conveyancing that will always take place:
1. Instruction to begin – Upon agreeing an offer both buyer and seller notify their solicitors. The selling agent will send both solicitors a Memorandum of Sale with the full details of all parties.
2. Draft contract sent to buyers’ side – The seller’s solicitor will complete a draft contract and send it to the buyer’s solicitor. The draft contract will include property forms completed by the seller, official copies (electronic deeds) and duplicates of relevant documents for the property.
3. Buyer’s solicitor applies for searches and investigates title – this is usually the longest part of the process – the buyer’s solicitor will review the paperwork sent by the sellers solicitor and raise enquiries they have over the paperwork or questions from the buyer in order to obtain all the necessary information to buy the property. The seller’s solicitor will often revert with their client, and also provide additional information or paperwork. The selling agent can be of use at this stage as a line of communication between both sides on matters that do not require legal attention. Often queries can be raised from the results of a survey. The buyer’s solicitor also applies for searches with the local authority and other organisations relevant to the purchase (See below for more on searches).
4. Report on Title – Once the buyer’s solicitor has received the searches back and received satisfactory replies to enquiries, they can compile a report for the buyer. The final statement is usually sent along with the report breaking down the amount of money due on exchange and completion.
5. Signing papers and transfer of funds – To have arrived at this stage both buyer and seller will be happy to progress with the sale based on the work carried out by their solicitors. The contracts are signed, and the buyer will place their solicitor ‘in funds’ with the deposit monies in order to progress to exchange. By this stage completion dates will have been agreed. Before exchange takes place, a lender will require a buyer to obtain buildings insurance.
6. Exchange contracts – The completion date is set, and the transaction becomes legally binding at the point of exchange. The buyer’s solicitor will send the deposit money to the seller’s solicitor. There are a few things to note at this stage:
a. The seller can no longer accept another offer, the buyer cannot be gazumped after exchange.
b. If a buyer chooses not to complete the purchase after exchange and will lose the deposit.
c. Should the seller choose not to complete after exchange they can be sued.
7. Completion – Also known as ‘move in day’, completion takes place when the seller’s solicitor confirms that they have received all the money due to purchase the property.
After completion a buyer’s solicitor will pay Stamp Duty Land Tax on the buyer’s behalf, send a copy of the title deeds to the buyers mortgage lender (if they’re using a mortgage), they will send legal documents to the Land Registry so the deeds can be transferred officially and will notify the freeholder if the property is leasehold.
What are ‘searches’ when buying a house?
The buyer’s solicitor will conduct several different types of searches during the process of conveyancing in order to accurately prepare their report on the title.
Local Authority Searches will include information relating to planning decisions in the area or proposals for new roads or railways. Another part of the search reports on whether the property is within a conservation area, subject to tree protection orders, a listed building or in a smoke control zone.
There are additional reports such as Environmental searches that might highlight flooding risks and Water Authority Searches which show the location of public sewers. These are not included within the standard local authority searches but can be necessary for certain purchases and some lenders will request these additional searches as standard – a buyer will incur additional costs for these.
Searches enable a buyer to make a well-informed purchasing decision and, in some cases, result in further surveys or investigations being carried out by specialists.
Though a seller is not involved in the responses provided in searches, it might be that they have useful documents or information relevant to the results from when they purchased the property that can be useful to the buyer and their solicitor.
Is it better to use a solicitor or conveyancer?
This is a question often asked by buyers and sellers and the answer usually comes down to personal preference.
It’s useful to highlight the difference between the two: A solicitor is fully trained in legal services but will specialise in conveyancing and though usually more costly than a conveyancer they’re often able to handle more complex situations. A licensed conveyancer is trained in only in conveyancing and cannot deal with more complex legal issues. A solicitor is usually preferred for properties of higher value.
Buying a property in Chiswick will often mean a buyer will encounter conservation areas or plans for development and it can be useful to have a solicitor on side to ensure everything is researched and reported fully.
There’s also merit in finding a solicitor who has knowledge of Chiswick or at least the London property market so they are able to competently work through leases and many other legalities commonly found in the capital.
Though we’re always happy to recommend a solicitor to our clients and potential buyers, as with mortgage brokers it is always wise to speak with a few professionals in advance of proceeding to a sale to ensure you trust the person you’ll be paying to oversee your sale or purchase.
If you would like to find out more, speak to a member of our Chiswick sales team at chiswick@hortonandgarton.co.uk, or our Hammersmith and Shepherd’s Bush sales team at sales@hortonandgarton.co.uk.
