The Exchange

Family buying house

Draft Contract 

The Seller’s solicitors prepare a contract for the sale of the property in draft form and send it to us for our approval. The contract is usually headed ‘Agreement’.

We will let you know when the draft contract has been received, and notify you of any matters that need to be brought to your attention and if there is anything which causes us concern. 

Until we receive the draft contract we cannot proceed. 

Enquiries and Title Checks 

It is usual for the Seller to provide certain information about the property in a Seller’s Property Information Form. This will include information as to disputes, ownership of boundaries and fences, the services connected to the property, planning and other matters. The Seller will also provide a Fittings and Contents Form showing what items are included in the sale and sometimes what items can be purchased as extras. We will send you copies of these two Forms and it is important that you check them carefully. 

We will raise enquiries with the Seller’s solicitors. These are questions about the property based upon the draft contract, copy title deeds supplied and the Forms completed by the Seller. 

We do not inspect the property. If, when you have visited the property, there is anything unusual or anything about which you need further information, please let us know and we can ask the appropriate questions. It is particularly important for you to let us know if alterations of additions have been made to the property even if it is simply that new windows have been put in.

We will check the title to the property to see that the Seller owns it and have the legal right to sell to you. We will check the title for adverse matter or defects that may affect your decision to purchase. 

The Searches 

We will carry out various searches. When you instruct us we ask you to provide money on account towards the cost of these. Sometimes special searches are required but the standard searches are as follows. 

A Search with the Local Authority

This will reveal information such as: 

  • Whether the roads are maintained
  • Whether there are any road proposals affecting the property
  • Whether any public football runs through or near the property
  • If the property is to be compulsorily purchased
  • What planning and building regulation approvals have been granted
  • A large amount of information as to town and country planning

The local search is extremely important: only in exceptional circumstances are contracts exchanged without the local search. If you are obtaining a mortgage your Lender will not allow us to use the mortgage money unless we have a search which does not show anything adverse concerning the property. 

We will notify you of any matters that need to be brought to your attention and if there is anything that which causes us concern. The local search will only reveal information known to the local authority at the time the search is undertaken about the particular property you are buying. It may not reveal: 

  • Information about adjoining properties (e.g. if the neighbours have applied for planning permission) or
  • Things which are proposed, or being discussed, about which no definite decision has been made.

If you think there is anything such as these which would affect your decision to buy, please let us know as soon as possible and we will ask specific question of the local authority. 

A Search with the Water Company 

The result will confirm whether or not the property is connected to the public surface and/or foul drainage systems and also give information about the water supply including the basis on which charges are made. The Company usually supplies plans showing the location of the public sewers and water main. 

An Environment Search 

We apply for this search as it is important to establish that the property is not built on “contaminated land”. If it is it will have an adverse effect on the value of the property. The search provides details of past and current industrial use within a radius of 500m and information about discharging licences; landfill sites etc. It will also indicate if the property is in an area more likely to be affected by subsidence or flooding. Everyone has different approaches to environmental risks so even if the search says the property has “passed” there may be information in the search which is of concern to you so it is important that you read it carefully. 

Reporting to You

When we are satisfied with the terms of the contract, we have had satisfactory replies to the Enquiries and Title Checks and received back the satisfactory search results we will usually prepare a written report for you to keep regarding the property. We will submit this to you with the contract for signature and the Stamp Duty Land Tax form to check and sign. 

Deposit

On exchange of Contracts, you must pay a deposit, usually 10% of the purchase price (although you Seller may agree to accept less). We cannot exchange contracts until we have cleared funds. 
If you are obtaining a mortgage of greater than 90% of the purchase price, and the 10% deposit will cause you difficulty, please let us know as soon as possible so we can see if a lesser deposit can be arranged. 

If you are selling at the same time as buying we should be able to use the deposit received from the buyers to pay your deposit on the property you are buying although you may be required to “top it up” to a full 100% of your own purchase price. However, occasions where this is required are not common. 

Finance

It is important that before contracts are exchanged you are sure that you will have sufficient monies available to complete your purchase. This means that if you require a mortgage you have a satisfactory mortgage offer from your Lender and can comply with all conditions attached to the offer. We will send you a written report on the mortgage offer. 

Exchange of Contracts

Until ‘exchange of contracts’ either the Seller of Buyer may withdraw from the deal. The other party cannot claim any fees or expenses from the party who withdraws. When contracts are exchanged a contract between the parties comes into effect. You should not enter into any financial commitment in relation to the property until exchange of contracts. 

Insurance

There is a general rule of law that, from the date when contracts are exchanged, the risk of damage to the property passes to the Buyer. Buyers should normally insure the property when contracts are exchanged, not when it is completed. 

After Exchange of Contracts

Any outstanding Transfer documents are signed. 

If you are having a mortgage we report to your Lender who is usually also our client and confirm that you will obtain a good and marketable title. We ask them for the mortgage money in time for completion. Lenders usually send us the money on the day we request and there is no guarantee that this will reach us in time to complete. To avoid any delays in your purchase we will request the mortgage money before the completion date. Most mortgage lenders will only charge interest from the completion date, but a few will charge interest from the date they send us the money. 

We will also ask you to let us have any amount you need to pay to complete the transaction. This amount will include Stamp Duty Land Tax, Land Registry fees and other disbursements which are payable. 

We will request that you make payments by bank transfer direct to our account. 
You should, once you know the completion date make removal arrangements and arrange for the final reading of service meters, telephones, etc. No completion date is certain until contracts have been exchanged. 

What happens next... 'Completion'

 

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