We have set out below some common questions and answers which may help you when buying or selling your home.
A comprehensive survey will ensure that you are fully aware of the condition of the property structure as this would not be revealed in any of the searches that we carry out on your behalf.
There are several different types of survey available. A full structural survey is particularly useful for old or large properties. The surveyor will report on everything that is visible. The outside of the roof will be examined and a sample floor board will be taken up, where practicable. The survey will cover the structure of the building, outbuildings, nearby trees that may cause damage, water services and drainage. The surveyor may suggest that you should have further tests, for example, if wet or dry rot is suspected.
Your lender (building society, bank or other institution) will arrange for a mortgage valuation of the property you are proposing to buy, (for which you have to pay a fee) to assist them in deciding whether or not they are able to lend you money against the security of the property. This valuation is solely for the benefit of your lender and we would recommend that you arrange for a more comprehensive survey.
We can put you in touch with an independent surveyor or you can ask your lender’s surveyor to carry out a further survey on your behalf (there will be an additional fee for this). Structural surveys can be expensive, so do ask for an estimate and check whether the fee includes the cost of the mortgage valuation.
As there are different types of survey that you can have we recommend that you speak to your surveyor, explaining your requirements and he or she will be able to guide you on the best type of report. Whichever type of survey you choose, it should be carried out by a member of the Royal Institution of Chartered Surveyors, the Incorporated Society of Valuers and Auctioneers, or the Architects and Surveyors Institute. If the survey report reveals anything unsatisfactory, it may be possible for you to negotiate with your seller to reduce the asking price.
Please note that nothing can be done about any defect which you discover after exchange of contracts. Generally, you need to bear in mind that the Contract will normally provide that you are taken to know the state and condition of the property and it is therefore important that you carry out all necessary inspections and surveys prior to exchange of Contracts. The maxim is “caveat emptor”, i.e. “buyer beware”.
On average it takes approximately 6 to 8 weeks from instructing your solicitor to the date of completion. Things can be slowed down if you are obtaining a mortgage and your new lender has particular requirements or if you are in a chain.
In a chain, the slowest party is controlling the speed of all the other parties. If you are selling a property as well it is likely that you will want to tie your sale and purchase together and this could also slow things down as one is dependent on the other.
On average it takes approximately 8 to 12 weeks from instructing your solicitor to the date of completion. Things can be slowed down if you are in a chain.
In a chain, the slowest party is controlling the speed of all the other parties. If you are buying a property as well it is likely that you will want to tie your sale and purchase together and this could also slow things down as one is dependent on the other.
Generally you will need to provide a 10% (of the purchase price) deposit although it can be a lesser amount of both the seller and buyer agree.
If the deposit is less than 10%, there is usually a clause in the contract which confirms that if the buyer does not proceed to completion following exchange of contracts, then the seller has a right to pursue the buyer for the full 10% funds.
Until exchange of contracts has taken place you can pull out of a sale or purchase at any time. However, any costs that you have incurred will need to be paid e.g. search fees. If a substantial amount of work has been carried out on your behalf we may need to make a charge for that work, but these fees will be at a reduced rate.
After exchange of contracts both parties are legally committed to complete the sale or purchase.
Completion is the day when the buyer become the legal owner of the property. The purchase monies are transferred from the buyer’s solicitors to the seller’s solicitors.
When the monies are received by the seller’s solicitors, any estate agents are instructed to release the keys to the new owners, any existing mortgages are repaid and any title documentation is forwarded by the seller’s solicitors to the buyer’s solicitors.
Exchange of contracts marks the stage in your transaction when a binding contract comes into existence. Before exchange, no contract exists between the buyer and seller, either is free to change his or her mind about the transaction ie can withdraw from it.
When exchange of contracts has taken place, a binding contract exists and neither party can withdraw without incurring liability for breach of contract. This is usually a financial penalty ie the loss of the deposit monies. Where a deposit of less than 10% of the sale/purchase price has been paid, the defaulting party is still liable for the full 10%.
Due to changes in the stamp duty regime on the 1 December 2003, it is now a requirement of the Inland Revenue that the purchaser of a property is required to complete and sign a Stamp Duty Land Transfer Form (SDLT form) and to pay the stamp duty land tax in relation to the consideration which you have paid to purchase the property within the defined period i.e. within 30 days from the effective date of transaction, which is normally completion of the purchase.
The SDLT form is a 7 page self-assessment form which requires reference to a 40 page set of guidance notes and as such, we envisage that we will complete the majority of the form, but we will require you to complete the personal details section and also require that you sign and return the form to us.
We will then need to submit the completed SDLT form together with the Stamp Duty Land Tax to the Inland Revenue within the 30 day period following completion. The Inland Revenue will then issue a Land Transfer Return Certificate (LTR certificate) to us, to enable us to then proceed with our application to register you as the new owner of the property.
You should be aware that there are financial penalties if the SDLT form is not submitted to the Inland Revenue within the 30 day period.
On your purchase, searches are carried out at 2 stages: pre-exchange and pre-completion.
The pre-exchange searches undertaken are with public bodies e.g. the Local Authority, Drainage Authority, Environment Agency etc.
These searches reveal information about the property such as any planning restrictions, tree preservation orders, local developments which may affect the property, whether or not the property is connected to mains water and drainage.
Pre-completion searches are carried out at the Land Registry and Plymouth Land Charges Department.
Dependent on where a property is and any specific lender requirements, additional searches may be required e.g. Coal Mining, Flood Risk. We will advise you of any additional searches that are required.
The property that you are buying must be insured from exchange of contracts.
It is therefore essential that arrangements have been made in advance of actual exchange so that the policy can be put “on cover” immediately we confirm exchange. If you are buying with the assistance of a mortgage, your lender may require that you insure the property through them.
Your solicitor will normally require a copy of the insurance schedule as evidence that the property will be on cover.
If you are selling a property it is advisable to retain the buildings insurance cover until the day of completion.
We need to have cleared funds in time for exchange of contracts so it can be sent to the solicitors acting for the sellers.
These are usually kept with the agent selling the property but we will confirm this to you before completion.
The keys can only be released on the day of completion when the sellers solicitors confirm to the estate agents (or buyers solicitors where there are no estate agents) that they have received the full purchase monies.
The solicitors acting on behalf of the seller will usually pay the estate agent fees on the day of completion out of the monies received from the buyer’s solicitors.