Moving House : Frequently Asked Questions
- What does "exchange of contracts" mean?
- Should I have a survey done?
- How long will it all take?
- What is a local authority search?
- Environmental matters
- Is a deposit really necessary when you buy a property?
- Why is a written mortgage offer so important?
- How do I check about fixtures and fittings?
- What do I do about buildings insurance?
- When do the agents, lenders and solicitors have to be paid?
- Why does completion have to take place on a working day?
- How do I sort out the keys?
- Useful Links
What does "exchange of contracts" mean?
Two identical contracts are drawn up - one to be signed by the seller and the other to be signed by the buyer. When both sides are ready to commit to the sale, the two signed contracts are dated and exchanged between the solicitors acting for each party. At this point the contract becomes legally binding for the first time and the date for "completion" is agreed. Completion is the day on which the deeds are handed over in return for the purchase monies, the seller must move out and the buyer will usually move in.
Should I have a survey done?
If anything is found to be structurally wrong with the property after exchange of contracts the seller is not liable and the buyer will have to pay for any necessary repairs. A mortgage valuation report alone does not cover the condition of the property in detail and offers the buyer no legal protection. For these reasons it is advisable to have a structural survey undertaken and it is often possible, for an extra fee, to arrange for the lender’s valuer to carry out a survey at the same time.
How long will it all take?
On average, straightforward transactions take 6 to 8 weeks to complete. However property conveyancing is often dependent on a ‘chain’ and complications can arise which will hold the process up. When contracts are exchanged a fixed moving date will be confirmed for the first time. PLEASE DO NOT make any financial commitments for moving until contracts have been safely exchanged and a definite completion date has been agreed.
What is a local authority search?
A local authority search will always be included in a Home Information Pack. This is an investigation to find out any important information affecting the property, which may be on the local authority's records. For example it may reveal an extension is in breach of Building Regulations, or that the nearest road is not maintained by the local authority, or that a road-widening scheme will affect the property. It will not give any information about proposals to develop any neighbouring land or properties, and if you have concerns in this respect please discuss them with us.
Environmental matters
Environmental factors are increasingly important as local authorities can now require owners to clean up any contamination on their property even if the current owner has not caused the contamination. This could prove costly. We will submit an environmental search on your behalf as part of the conveyancing process so that you can be sure your new property is clear of any such problems.
Useful links:
Is a deposit really necessary when you buy a property?
When contracts are exchanged, a deposit is paid over to the seller's solicitor and if you fail to complete the purchase on time, the seller can keep this deposit. If you are a first time buyer the seller's solicitor will often ask for at least 5% of the purchase price as a deposit, and if you cannot raise this, you should contact us immediately for advice.
Why is a written mortgage offer so important?
You will be legally committed to buying your new property when contracts are exchanged and we need written confirmation that your lender will provide the funds you require, and upon what terms to ensure you can complete your purchase on the due date. There are often conditions in the written offer that need to be satisfied before funds are released, such as work to be carried out to the property. In addition, you need to be happy with the product you are being offered, and to be able to take advice on it. It is important that you can meet all of the conditions before exchange of contracts take place.
How do I check about fixtures and fittings?
It is important that everyone is clear about what is included or excluded in the sale price. If you are selling you will be asked to complete a list, which we will provide, which will be sent to the buyer’s solicitor for consideration. If you are buying we will send you a copy of the completed list for you to consider as soon as we receive it. If necessary, the buyer and seller should get together to discuss these matters in detail and before exchange of contracts, to resolve any issues.
What do I do about buildings insurance?
The buyer should insure a property from exchange of contracts but a brand new property will usually only need to be insured from completion. The property should be insured for the estimated cost of rebuilding, (including clearing the site). If you are not insuring your property under a lender's block policy you will need to make your own insurance arrangements before contracts are exchanged. Your lender's valuation or survey will often give you the figure you need to insure your property for. If not discuss this with your provisional insurers.
When do the estate agents, lenders and solicitors have to be paid?
On a sale, when contracts have been exchanged, we will prepare a completion statement (financial summary) which will set out all the figures involved, including the estate agent’s fee and the amounts required to pay off the mortgage(s) on the completion date. On a purchase, we will prepare a completion statement, which will include the net amount of any mortgage advance, and all other out of pocket expenses such as Stamp Duty Land Tax and the Land Registry fee. You will need to provide the balance required (if any) to complete the transaction, including the legal fees and expenses for the work we do for you and the lender. Any payment must be received by us at least a week before the completion date if paid by cheque, or the day before if paid by bank transfer.
Why does completion have to take place on a working day?
Completion is effected when the purchase monies for the property are paid over to the seller's solicitor. At present, the banks only transfer money electronically on a working day so completion cannot take place on a weekend.
How do I sort out the keys?
On completion the seller should hand the keys over to the estate agents. It frequently happens that this is not convenient and the seller will hand them directly to the buyer. It is important that you find out and agree the arrangements for the keys once contracts have been exchanged.
Useful Links
- Health Protection Agency : Radiation and Radon
- Environmental Agency : Flood Risk
- UpMyStreet : Local Information
