Stumped by what a conveyancer actually does and charges for? We asked Linda Kirk to demystify the process by breaking it down into 10 easy steps.
One of the first things you’ll need to do when you have an offer accepted on a house is to instruct a conveyancer to deal with the purchase.
Most of the time, this will be a solicitor, but you could equally choose a licensed conveyancer or property lawyer to do it. They should be regulated by the Solicitors Regulation Authority or the Council for Licensed Conveyancers respectively.
Once you have settled on a choice, how does it all work? We asked Linda Kirk, conveyancing partner at Stephensons Solicitors to help demystify the process and break it down into 10 easy steps.
Read Phil Spencer’s top tips on how to find a good conveyancer
Step 1: Open the purchase file
The very first job for a conveyancer is to open the purchase file and send a letter out to you setting down its terms of business.
“Within this will be an information form which asks for basic details such as your contact, date of birth and national insurance number,” says Kirk.
“It will also ask for details of your estate agent, whether you need a mortgage for the purchase and – if you do – which lender you are using and where the deposit’s coming from. You’ll also have to submit photo ID such as passport or driving licence.”
At this point, many solicitors will provide you with a fixed fee estimate. But this is only based on the information you’ve provided them and it could change if the legal work becomes complex.
Step 2: Request fee for searches
Local Authority searches, which uncover potential issues such as public rights of way, compulsory purchase orders and enforcement notices for the property, can take weeks to process. So, it’s best to hand the money for this to your solicitor now and get the ball rolling. Budget for around £300, advises Kirk which will also cover the cost of the separate Environmental and Water searches.
“Paying now is not compulsory, and some clients may wish to wait until their survey has been done, but it puts us in a position where we can start to progress,” says Kirk.
How did you source your conveyancer?— Zoopla (@Zoopla) November 22, 2016
Step 3: Get the lowdown on ‘the chain’ from the estate agent
Next, your solicitor will ask the estate agents marketing the home for a notification of sale (also known as a memorandum of sale) which contains the solicitor details for each party in the chain.
Your solicitor will then contact the seller’s solicitors to let them know they’ve been instructed to act for you with the purchase of the property.
Step 4: Receive all paperwork from the seller’s solicitor
As soon as the seller’s solicitor has drawn up the draft contract, they will send it, together with a copy of the Title (or ‘Deeds’) for the property, to your solicitor.
Since 1990 all Deeds have been electronically recorded with the Land Registry, so, providing the home has been sold since then, they will be available online.
But if there have been no transactions on the property since 1990, it could be ‘unregistered’ which means ownership can only be proved with the original hard copy Title Deeds. “These are usually held in Deeds storage by the bank that has the mortgage on the property, or by the seller themselves,” says Kirk.
Along with the draft contract and Deeds, your solicitor will be sent what’s known as the protocol documents. These include:
a Seller’s Property Information Form, in which the seller must disclose everything from neighbour disputes to when the boiler was last serviced.
a Fittings and Contents Form, which outlines what will be left and removed from the property as part of the sale.
a Leasehold Information Form. If the home you are buying is leasehold (usually a flat or apartment) this will set out factors such as the amount of ground rent payable and contact details for the freeholders and/or management company.
Step 4: Raise queries and carry out checks, checks…and more checks
Your solicitor will now go through this paperwork – and every search as it comes back – with a fine-toothed comb. They’ll need to raise any questions and queries they have with the seller’s solicitor.
“This could range from anything from a discrepancy on the Deeds to the environmental search showing up flood risks or contaminated land,” says Kirk.
Getting to the bottom of issues like these can delay the process by weeks but it’s imperative it’s done correctly.
“As solicitors, we follow a code of conduct and must also comply with the mortgage lender’s requirements. If we don’t carry out all the necessary due diligence checks and investigations, we’d be negligent.”
TOP 5 DELAYS FACED BY SOLICITORS
Step 5: Send watertight paperwork to you to sign
When every ‘i has been dotted and t crossed’, your solicitor will send you all the checked documents to sign and return.
These days, most can be emailed to you although some are so extensive they have to be posted. Documents such as the Instruction form and Seller’s Property Information Form, you’ll be able to sign, scan and email back. Others, such as the Deeds, require an original signature.
Step 6: Request an initial deposit from you
Next, your solicitor will ask you for a deposit of 10% of the purchase price (unless you are taking a 95% mortgage, in which case only 5% is due).
This payment can be made by online banking transfer – although bear in mind banks usually impose a daily limit of around £10,000. “If you have time, you could make several payments over several days,” says Kirk.
Don’t know what your bank’s transaction limit is? Find out here
Alternatively, you can make the payment via telegraphic (or CHAPS) transfer. So long as you do it before 3pm, it will clear that day. The cost of a CHAPS transfer varies between banks, but between £10 and £35 is typical.
If the exchange date is likely to be very close to completion – ie, a matter of days – it can be cheaper and easier to pay all costs in one transfer.
Otherwise though, it’s a good idea to hang onto the bulk of your cash for as long as possible as funds held in your solicitor’s ‘client accountant’ are likely to earn little or no interest.
Step 7: Line up parties along the chain for exchange and completion
Your solicitor will now discuss with you a convenient date at which to move into your new home (known as completion). That date will then need to be agreed with the seller’s solicitor and those parties further along the chain.
“Sometimes the chain has difficulty agreeing a mutually convenient date,” says Kirk, “but being willing to compromise is one of the best ways to avoid delays.”
Once a completion date is agreed, your solicitor will then work towards a date you can exchange contracts.
Don’t make moving arrangements until you have a definitive completion date. If you book in removal companies or deliveries which you are then forced to cancel, you could end up losing money.
Step 8: Exchange
The sellers at the top of the chain will need to be the first to have their contract released and ready for exchange.
Once the process starts, exchange will cascade down the chain and will be concluded within the timeframe set. Once the process has been completed, the completion date cannot then be changed.
The 10% (or 5%) deposit already cleared in your solicitor’s account will be paid to the seller on exchange of contracts and the date agreed for completion fixed in the contract.
This is the point at which the purchase becomes legally binding. Kirk says: “We rarely see it but if you back out after exchanging signed contracts, there are serious consequences.
“Not only will you lose the deposit but if you don’t complete on the fixed completion date stated in the contract, you’ll be in breach of contract too.
“This means the seller could sue you for inconvenience and costs they’ve incurred as a result of your breach.”
Step 9: Complete
Your solicitor will then send you the final completion statement. Any outstanding balance due to complete is now payable.
This means all disbursements (a term that refers to charges the solicitor has paid to third parties on your behalf, such as Stamp Duty and management company fees) and the cost of the legal work itself.
Any money you’ve paid advance, such as for searches, will be deducted from the balance due.
Your solicitor will also request the balance of the mortgage amount from the bank or building society.
Bear in mind, these funds will need to be cleared in your solicitor’s account before completion can take place.
On the day of completion, your solicitor will send this balance along with any other fees payable (apportionments of ground rent and service charge on flats, for example) to the seller’s solicitors by same-day CHAPS transfer.
“The length of time it can take to transfer the monies can vary depending on how busy the banking system is, but generally, it should not be more than a few hours,” says Kirk
Once the cash has landed with the seller’s solicitors, they will telephone to confirm completion and authorise the estate agents to release the keys to you.
Step 10: Register change of ownership
But your solicitor’s job is not over quite yet. The change of ownership will need to be logged with the Land Registry.
Following completion, the seller’s solicitors will send the signed Deed – which now shows the transfer of property from the seller’s name to yours – to your solicitor. They will then submit it, together with the Mortgage Deed, to the Land Registry for registration.
“This is normally carried out electronically, although if it’s a new-build or first registration the application has to be posted,” says Kirk.
Once the Land Registry has completed the registration, you’ll be sent a copy of its Office Copies which is proof of your ownership (and Deeds where they exist) along with any guarantees for your new property.
If it’s leasehold, your solicitor will also notify the landlord or management company that the lease has been assigned to you. That way, they know who to send any service charges and ground rent bills to.
Do think the conveyancing industry would benefit from being more transparent? Tell us by posting in the comments below...