Aug 10, 2011

Rough and succint guide to the process that is followed by Solicitors.

Lets clarify briefly what the process involves from beginning until past when you get the keys to your new home!

Firstly you will need a solicitor or licenced conveyancer as no unqualified person can deal in property transactions;

Property can be a legal minefield full of potential pitfalls, problems and complex legal issues so therefore finding a suitable professional is important. As I have said before cost should not be your only consideration, factors such as feeling comfortable, how approachable the solicitors are, features of the service which make the process convenient for you should all be important factors which should be considered.Prices do vary, so shop around, be weary of firms pushed by the estate agent or broker as they may have some fee arrangement that you might not be aware of. The firms may also be far away from you and in an emergency to complete a transaction any apparent saving may be wiped out if you had to travel to sign documents etc which in my experience anecdotally is not unheard of.

1. You give written authority to the solicitor to act for you, this is normally a form your solicitor will provide to confirm that you agree to the terms of business.
2. Your solicitor will contact the sellers solicitors to request the draft contract pack.
3. A draft contract pack will contain amongst other things, the draft contract, If the property is registered, then the Her Majesty's Land Registry Official Copy of Title and file Plan will be included.
4. There will be some other documents such relevant to the sale, such a property information and contents form.
5. The draft contract will also be provided all the terms relating to the transaction. It is in draft form until formally agreed during negotiation and enquiries.
6. Your solicitor will check the documents and raise any queries on any points of concern or clairification which he feels is in your best interests to raise in accordance with your objectives for the property.
7. It is at this time that your lenders instructions are  given to your solicitor to act on the lenders behalf of the legal work for the mortgage and there may be some enquiries from those instructions. Sometimes the lender may have their own solicitors.
8. Once all matters have been dealt with, then the solicitors will agree a contract.
9. At this point your solicitor will provide a written report to you about the contract, the property and the mortgage for your approval and he may also ask you sign the contract if you approve him to proceed. You will have to consider the documents and decide with all the pros and cons and inherent risks whether you wish to proceed, it is your responsibility to make the decision not the solicitors (remember your solicitor is not going to live in the property or pay the mortgage!)
10. Now comes the legal bit, until now you are free to walk away without penalty, in reality you may lose out in fees to the lender for the survey and some legal costs but nothing expensive.
11. Your solicitor will exchange contracts with the sellers solicitor in a process called exchange by telephone under certain procedure. There will be a written contract and a counterpart which together forms the entire agreement.
12. Agreeing completion dates and other matters will occur at the same time.
13. At is normal it is now when the deposit is paid to the sellers solicitors. The two contracts, one signed by you and the other by the seller are swapped between the solicitors after making a binding contract in point 11.
14. Your solicitor will normally request funds from the lender and if there is a shortfall, funds from you.
15. A bankruptcy search will be done to make sure you are not bankrupt and this nothing that should be seen as offensive but standard practice.
16. An Offical Search is done which gives your lender or you (if you have no mortgage) priority over any other party over the property, ie this may stop the sellers taking further mortgages or loans.
17. The sellers solicitor will provide the draft transfer deed together with completion information (ie where the funds need to be sent usually only to the sellers solicitors.)
18. Both solicitors agree the transfer and there is nothing more to do but wait for funds to come in from the Lender and / or funds to come in from you.
19. On the day of completion, your solicitor will instruct his bankers to send funds by same day electronic transfer to the sellers solicitors. There will be small charge for this which should be same as the charge raised against the solicitor.
20. Once the sellers solicitors confirm that funds are received, the purchase has now been completed.
21. At this point most buyers will have the keys to the property and start moving in.
22. Your solicitor will pay Stamp Duty Land Tax (SDLT) and make a SDLT return whether or not tax is payable.
23. Once the SDLT is settled and the signed transfer deed is received, your solicitor will apply for the name of ownership to be changed and also register the mortgage on the property.
24. You should get a bill and completion statement together with proof that you are now the new owner and some other documents in the post as neccessary.
25. Post completion responsibilities will last as long as you own the property and this could be its general upkeep, maintenance and keeping aware of any public notices which may affect the property.