Stages of Conveyancing

What is Conveyancing?

Conveyancing is the process of buying and/or selling property, i.e. "conveying" it from one person to another. There are set procedures and rules for the process which must be carefully observed.

Buying a Property

Making an Offer

The first thing that will happen is that you will see a property you wish to purchase and will offer a price, "subject to contract", either to the Estate Agent if there is one, or to the owner. Subject to contract means that you are not legally bound until a written contract is signed and exchanged. If your offer is accepted, subject to contract, you should confirm that the property has been taken off the market. At this point you should "instruct" solicitors, and tell the Estate Agent or owner to send the papers direct to them. Do not sign anything at this stage.

Mortgage Application

If you will need a mortgage in order to purchase the property, you should make the application to your bank or building society as soon as possible.

Deeds and Documents

The seller's solicitors will send these direct to us. They will include a contract which must be written in a specified form and contain all the conditions of the transaction. There will also be copies of deeds or land registry title documents for the property, proving, among other things, that the seller is the legal owner and entitled to sell the property.

There may be a plan showing the property and its garden, if any. If the property is leasehold (a flat) there will be a lease.

All these documents need to be checked very carefully. We will do this and report anything important to you.

Enquiries

In the light of the deeds and documents supplied, we will make enquiries about the property from the seller (via their solicitor). These enquiries are phrased in a formal manner and are important — they form part of the terms on which the property will be purchased. When we receive replies to these enquiries we will inform you about all important points.

Contents

When you first view the house, it is a good idea to ask what of the contents (e.g. curtains, carpets) are to remain and keep a note. However, even if you did not do this, we normally send you a formal list detailing what is at the property and saying what is included in the price, what you will be asked to pay extra for, and what will be removed.

Survey

You should have a survey of the property. If you have made a mortgage application your lender will require you to have (and to pay for) at least a surveyor's valuation report. This is not really good enough for your purposes because all it will confirm is that the surveyor thinks the property is worth what you are borrowing. You need to know about defects that may affect the value of the property at a later date or involve you in expense in the future. Your lender may be able to offer you the option of a better survey with the same surveyor. Even if you do not have a mortgage you should still have a survey.

Searches

It is necessary to make enquiries of the local authority, and sometimes other bodies, to ensure that nothing is planned for the property itself or the close locality that will adversely affect the value (or your enjoyment) of the property — such as a planned major road development running through the garden. We take care of this for you.

Drainage and Contamination

You will need to check the drainage of the property. In urban areas, this will usually be to a public sewer, but may involve a length of private pipe. In rural areas, it may be to a cesspit.

We can obtain a search to check whether the land is contaminated — if it is you, as owner, may be liable to remedy the problem even if it occurred before you purchased the property.

Mortgage Offer

Sometimes you will be offered a mortgage with strings attached, such as on condition that you carry out certain repairs to the property. If the work needs to be carried out before you complete the purchase, you will have to negotiate for access with your seller. Sometimes the lender will make a retention — promise you all the money you asked to borrow but hold back some of it until you have made certain repairs after the completion of the purchase. If this happens you need to be sure (a) that you can raise the extra money you will need to complete the purchase and (b) that you can afford to have the work done — get firm estimates so you know how much is involved.

Endowments and Insurance

If the mortgage is an endowment, or if the lender requires other insurance, such as a mortgage protection policy, you should make yourself ready to put the required policy into effect.

Sign the Contract

Once all the preliminaries have been satisfactorily completed you will be asked to sign the contract. This does not yet mean that you are committed to the purchase — that does not happen until contracts are exchanged (see below).

At this point you should agree with your seller, and with anyone else involved in the chain, the date on which you want to complete the purchase.

Deposit

When contracts are exchanged, you will have to give a deposit. How much this deposit is will be open to negotiation and it will then be stated as one of the terms of the contract. The usual sum used to be 10% of the purchase price; nowadays it may be less, perhaps 5%, or worked out on a formula such as the difference between the purchase price and the amount you are borrowing with your mortgage. However much the deposit paid is, the main point about it is that, if you fail to complete the purchase due to your fault, you stand to forfeit the full 10%.

Exchange of Contracts

This is the point at which you (and the seller) are committed to the transaction and cannot change your mind.

It used to be a physical exchange — the buyer signed one piece of paper (contract) and the purchaser another, then their solicitors met each other and swapped papers. Nowadays it is more likely to be done over the telephone with a sentence like "We agree contracts are exchanged on (date and time) with completion on (date)", and then the papers are posted.

However it happens, you will not need to be present. You will give us authority to exchange contracts on your behalf and we will tell you when it has been done.

Moving Arrangements

Once exchange of contracts has taken place, you can make your arrangements to move — not before. See our moving home notes for details of what you need to do.

Insurance

Once exchange of contracts takes place, the new property is at your risk and you must put buildings insurance into effect. If, for instance, in the unlikely event that the property burned down between exchange of contracts and completion of the purchase, you would still have to pay the money to the seller and go ahead with the mortgage.

Requisitions

After exchange, final questions need to be asked of the seller about completing the transaction. Arrangements also need to be made to obtain the mortgage monies, and prepare final statements. You may also be asked to sign the transfer document, which will transfer the title of the property to you on the completion day.

Completion Day

This is the day when the property becomes yours and you can move in when the money has actually been paid to the seller. If there is a chain and/or you are both buying and selling, the money may have to pass through several solicitors' bank accounts before all transactions are completed. Therefore you should not expect to have possession of your new house much before lunch time.

Registration and Deeds

After completion of the purchase, the details of the transaction must be registered at the relevant Land Registry. The title will be held electronically in the land registry and there are no longer any deeds to be retained.

Selling a Property

Receive an Offer

Once you receive an offer with which you are happy, you should instruct us so that we can begin to draft the necessary documents for you.

Deeds

The first thing we will need is your deeds or title documents. If you have a mortgage, these will almost certainly be in the keeping of your lender. If you do not have a mortgage, they should be in your possession.

Contract

It is the seller's responsibility to draft the contract. This is usually done by solicitors because it should be written in a specified form and contain all the conditions of the transaction. Once written, it is sent to your buyer's solicitors and the details may be argued over ("open to negotiation"). As well as a contract, the seller needs to provide evidence of his title to the property (by means of copies of the deeds or title documents) and a plan.

Enquiries

These are formal questions asked about the property. It is highly advisable to allow us to check these — based on information supplied by you and from the deeds.

Sign the Contract

Once all the preliminaries have been satisfactorily completed you will be asked to sign the contract. This does not yet mean that you are committed to the sale — that does not happen until contracts are exchanged (see below).

At this point you should agree with your purchaser, and with anyone else involved in the chain, the date on which you want to complete the sale.

Deposit

When contracts are exchanged, your purchaser will give a deposit. How much this deposit is will be open to negotiation and it will then be stated as one of the terms of the contract. The usual sum used to be 10% of the purchase price; nowadays it may be less, perhaps 5%, or worked out on a formula such as the difference between the sale price and the amount your buyer is borrowing with his mortgage.

However much the deposit is, the main point about it is that if the buyer fails to complete you may be entitled to keep the money.

Exchange of Contracts

This is the point at which you (and the buyer) are committed to the transaction and cannot change your mind.

It used to be a physical exchange — the buyer signed one piece of paper (contract) and the purchaser another, then their solicitors met each other and swapped papers. Nowadays it is more likely to be done over the telephone with a sentence like "We agree contracts are exchanged on (date and time) with completion on (date)", and then the papers are posted.

However it happens, you will not need to be present. You will give us authority to exchange contracts on your behalf and we will tell you when it has been done.

Moving Arrangements

Once exchange of contracts has taken place, you must make your arrangements to move out of the property. See our moving home notes for details of what you need to do.

Redemption Figures

If you have a mortgage on the property you are selling, you must pay it off on the completion day (from the money you receive for the sale). In order to know exactly how much to pay, we will ask the lender to make the calculation of how much you will still owe on that day.

Assigned Life Policy

If you have an endowment mortgage or other mortgage where an insurance policy is assigned to the lender, we will arrange to have the policy re-assigned to you once the mortgage is paid off.

Transfer and Requisitions

After exchange of contracts we will answer final questions from the purchaser's solicitor about completion and where to pay the money.

You will be asked to sign a final document that actually transfers the property on completion day.

If you employed Estate Agents, their bill will become due on completion day. We will ask them to render their account, which you should check to ensure that it is what you agreed to pay.

We will put all the figures together and give you a final account, showing how much money will be due to you from the sale (or from you) after all expenses have been paid.

Completion Day

This is the day when the property is actually sold and you must move out. You must be gone, and all your possessions removed, by the time the purchaser actually pays his money (in practice around lunch time or shortly before).

Buying and Selling

If you are engaged in both transactions at the same time, there are some special considerations to bear in mind.

Synchronisation

Unless you have somewhere else to move to temporarily or can obtain a bridging loan to hasten your purchase, contracts will need to be exchanged simultaneously on both transactions. This may mean that one transaction will be held up if there is a delay with the other. Normally it is not a good idea to proceed with one transaction if the other is not yet ready, particularly if bridging finance is involved, because this can be very expensive.

Many of our conveyancing clients are engaged in both buying and selling at the same time. This is not at all an unusual situation and we will do our utmost to keep both matters proceeding together.

Deposit

The deposit paid by your buyer can sometimes be used by you to pay the deposit on your own purchase. However, you do not have a "right" to do this, and the arrangement does need to be individually negotiated with the buyer — who may agree to it in exchange for a concession from you, such as a reduced deposit.

Completion Day

You are not entitled to move into your new property until the money has been paid to your seller. However, your buyer is entitled to move into your old house as soon as he has paid you. Since the money for your purchase will come (at least in part) from your sale, in practice this means you will need to move out in the morning and may not have access to your new home until the afternoon. You should make this clear to your removers, as there may be some hours when your furniture may need to remain in their van or be otherwise stored.

Completion day must be a week day (when the banks are open). Many people favour moving on a Friday — because it gives the weekend to get unpacked. However, it may be best to choose another day. Because it is such a popular day, we tend to find that there are more likely to be delays on a Friday and if something does go wrong somewhere along the chain, it may not be resolved until Monday morning.

Article first published October 2002
Last reviewed August 2006