The Inside Edge
In part 1 of our property conveyancing guide we looked at how to instruct a solicitor, the start of the process and the arduous task of completing many forms. We’ll now take a look at the closing stages of the home buying and selling processes.
Signing the Contract
Once your solicitor is happy that his enquiries have been successfully answered or dealt with he can invite you to sign the contract and a number of other documents. This will happen once all searches have been carried out satisfactorily and he has a copy of your formal mortgage offer. The mortgage offer is very important as it proves to all parties that you have the funds available to continue with the purchase. You may be asked to sign the contract in person, but usually it is fine to do this by post. You will also be sent a ‘property report’ that contains any striking information that has been raised as a result of the searches. This report should be read carefully as it may highlight a problem or concerns that need to be raised with your solicitor. The report will be carefully studied by your solicitor and your mortgage lender to determine whether the property you wish to buy is a good investment.
It should be noted that the signing of the contract does not make it legally binding. It simply means that your lawyer is now able to exchange contracts.
Exchange of Contracts
Exchange of contracts is the point when many home sellers and buyers breathe a sigh of relief. This is when the contract does become legally binding. Exchange usually happens over the phone between the seller’s and buyer’s solicitors each of whom will have a copy of the contracts signed by their clients. They will go over the contracts to ensure all information is identical. Once exchange happens the seller and buyer are legally bound to complete the sale and purchase. A date for completion will then be agreed between the seller and the buyer through their solicitors.
Another very important part of the process, completion is the day when the seller moves out of the property and the buyer moves in. Depending on the length of the chain, determining a completion date can sometimes be a difficult process. However, most people want to move as quickly as possible and therefore won’t put up any obstacles that will delay this from happening. Nobody can guarantee what date completion will happen and completion doesn’t actually occur until the seller’s solicitor receives the money for purchase from the buyer’s solicitor.
Monies are sent by telegraphic transfer which is guaranteed to reach the bank on the same day. There is usually a charge for this and monies will only arrive if they are sent before a specific cut-off time determined by the bank. As long as there are no problems you can usually expect completion to happen around lunchtime. This is usually when you are sitting outside the property with your removals company waiting to move in. Once the money has been received in the seller’s bank account the estate agent will be instructed to release the keys to you. Delays can occur, but in most cases you can expect to be moving into your new property in the early afternoon.
Of course, this guide doesn’t highlight the many problems that can occur during the conveyancing process, but we’ll save those for another time. We hope our guide will give you a little insight into how the process works.