Process of conveyancing

Buying/selling your home can be a headache. It involves the process of conveyancing . Here are the stages of a conveyance.

• Investigation The investigation consists of three parts: the provision by the seller's conveyancer to the purchaser's conveyancer of draft documentation; answers to pre-contract enquiries; and a local authority search.
• Draft documentation - should include a draft contract of sale, including a copy of the lease if the property is leasehold.
• If the property is freehold either a land certificate (if there is no outstanding mortgage ) or a charge certificate (showing the mortgage) should be provided.
• In rare circumstances if the title of the property is not registered with the Land Registry , an "abstract of title" should be supplied which will contain copies of all deeds and documents proving that the seller actually owns the property and may sell it.
• Pre-contract enquiries. These are specific questions which may cover issues such as disputes with neighbours, alterations to the property, etc. The seller is legally required to answer these enquiries honestly!
• Local Authority Search. A search of the Register of Local Land Charges should tell you/your conveyancer whether a new motorway is going to be built at the bottom of the garden of the property. It should show planning, financial and other charges affecting the property. Conducted by post, this search can take between four and six weeks although most councils process searches in two weeks or less. Most mortgage lenders require an official search to be carried out.
• Assessment of Draft Contracts. This is a review of the contents of the documentation the buyer has received from the seller. As these are legal documents, the wording has to be correct and unambiguous.
• If the property is leasehold, this is the point at which you will need to check thoroughly the apportionment of expenses (if you are in a block of flats), the terms of maintenance, the terms of the management of the property and what charges are made. This is also the point at which conveyancers negotiate the deposit payable on exchange of contracts , the time between exchange and completion and any allowance by the seller to let the buyer have access to the property ahead of time.
• A deposit of between 5% and 10% is common, as is completion 28 days after exchange although both may vary. Indeed there is no reason why completion may not take place at the same time as exchange providing all the necessary conditions have been fulfilled.
• Exchange of Contracts: The sale/purchase of property in England and Wales only becomes a binding contract at this point in the proceedings. Once you or your conveyancer are satisfied with the inquiries, negotiations and documentation, you sign the approved contract and hand over the deposit.
• The seller also signs a contract of sale. This is the exchange of contracts and a date for the completion of the transaction will be set. The contract is now binding and either party is liable for legal action in breach of contract if they try to pull out. Note: if you are a purchaser you are responsible for the insurance of the property after the exchange so you need to arrange insurance cover from the day of exchange.
• Once contracts have been exchanged, the next step in conveyancing is to carry out bankruptcy searches. Mortgage lenders want to be sure that neither the buyer nor the seller has a bankruptcy notice registered against them. Title searches at the Land Registry and the Land Charges Department (depending on whether the property is registered or not) will also be carried out.
• Completion. The completion date is the date on which the purchase obtains all rights to the property in return for the actual transfer of the funds covering the purchase price (less the deposit already paid). Until the seller has these funds, the buyer may not normally have access to the property. The date, even the actual time of day, of completion is quite specific and relies absolutely on the transfer of money.
• After Completion. While the seller counts his money and pays off his mortgage (if he had one), the buyer still has bills to pay. Stamp duty on the purchase, if applicable, now has to be paid. The purchaser must be registered as new owner with the Land Registry together with the details of any mortgage lender.
• The title deeds will be sent to the mortgage lender. If the property was purchased outright, you keep the deeds BUT be sure to put them in a very, very safe place. Most people lodge them with their bank for safekeeping.

See Also: Mortgage Centre and Mortgage comparison Service for the latest facts and figures.

Last Updated: February 2008 © Moneyextra.com

Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.