Purchasing a new home is an exciting yet sometimes daunting experience. For the majority of people, a house is the single largest investment they will ever make. Additionally, there are numerous formalities and legal requirements that many people are unaware of. The conveyancing process will be different if you are a cash buyer – but not by much. Blackstone solicitors have a wealth of knowledge and will guide buyers through the entire process in a measured and cost-effective manner. We recognise that you may be unfamiliar with the terminology frequently used in the home buying process, and as such, we will proceed at your pace, ensuring that you understand and approve of everything throughout the process of purchasing your new home.
In this article, conveyancing process for cash buyers, we take a look at the steps involved in buying your new home.
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What is conveyancing?
Conveyancing is the area of law that deals specifically with the legal aspects of moving home. Conveyancers are lawyers who focus only on the legal aspects of home ownership. A conveyancer will assist you in navigating the legal procedure of transferring property ownership from one individual to another.
What are the steps involved in buying a new home?
- Save for a deposit and apply for a mortgage in principle
Prior to beginning your house search, you must find a mortgage lender and secure pre-approval for a mortgage — a process that a mortgage advisor may assist with. When choosing a mortgage advisor, it is frequently wise to rely on recommendations from colleagues or friends who have had a good experience.
The broker will assess your overall financial situation and advise you on the best type of mortgage for you. After you submit your information, you will undergo credit checks before a mortgage lender sends you an offer in principle – a letter stating the amount of money you can borrow. The offer in principle both defines your budget for the house and is required by the seller in order for the offer to be accepted. It’s worth noting that mortgage pre-approvals are only valid for 90 days, so avoid applying too far ahead of your house hunting. If you are unable to discover a home within this time frame, contact your lender; they should be willing to extend the offer period.
In terms of a deposit, the typical down payment required to acquire a home is 5% of the total purchase price. For example, if a house is priced at £200,000, you will need at least £10,000 in savings to qualify for a mortgage. Although 5% is usually used as the minimum deposit, it is prudent to save more, as a greater deposit typically results in cheaper mortgage interest rates. If you’re moving up or down the property ladder, the sale of your previous home may help fund the deposit on your new home.
- Start house hunting
This is the part people often enjoy the most! You may now begin your search for the perfect house. Rightmove and Zoopla are two prominent house-hunting websites, with estate agents routinely advertising new listings on both. Additionally, you should consider registering with estate agent in the area in which you wish to live. Registering is absolutely free and will impose no obligations on you. Keeping in touch with local estate agents may assist you in locating your dream home, as agents occasionally contact registered purchasers prior to selling a property online.
Scheduling house viewings can rapidly become overwhelming, especially if you intend to view a large number of properties. Regardless, it is vital to inspect properties both in person and online. Seeing a house in person as opposed to watching it on a screen can provide a much more accurate depiction of it.
- Instruct an experienced conveyancing solicitor
While you are house hunting, you should consult with a conveyancing solicitor. Although their work cannot begin until you submit an offer, knowing who you will work with and briefing them in advance might expedite the legal process once an offer is submitted. This significantly minimises the likelihood of your offer failing to materialise or getting gazumped. Gazumping is where you have had an offer accepted on a house but prior to exchange of contracts, the seller decides to sell the property to somebody else who has put in a higher offer. A conveyancing solicitor’s function is to assist in making the process as seamless as possible by conducting property searches on behalf of a buyer and offering legal contracts and advice. The work they carry out is hugely important so choose your conveyancer with care and don’t simply go with the cheapest. You tend to get what you pay for.
One of the initial steps in the property conveyancing procedure is for your solicitor to examine the draught contract and supporting paperwork and to contact the seller’s solicitor. You will be expected to review the paperwork prepared by the seller, including the TA6 form, and to contact the solicitor if you have any questions or concerns.
You’ll want to double-check the tenure of your new property in particular: is it leasehold or freehold? Leases of less than 80 years are problematic; they can be costly to renew, and you must have owned the property for two years to be eligible. Leases of less than 60 years should be avoided.
There are some things you may not know about the house based on estate agency viewings or even a survey. A conveyancing solicitor will conduct a series of legal property searches as part of the conveyancing process to verify there are no other considerations to be aware of. Certain searches are advised by the solicitor for all acquisitions, while others are required by the mortgage lender to safeguard them against potential liabilities associated with the property.
These property searches include the following:
- Local authority searches: Is there talk of building a road in your new garden? How about radioactive gas?
- Checking the Land Registry’s ‘title register’ and ‘title plan’ — these are the legal documents establishing the seller’s ownership. Both checks are necessary by law in order to sell.
- Flood risk assessment – this can also be done at the Land Registry. If you already have an environmental search, you may not need to purchase this one separately, as the environmental search will have far more detailed flood statistics and maps.
- Water authority searches – ascertain how your water is supplied and whether any public drains on the site may impede extensions or construction work.
- Chancel repair search – to ascertain that there are no lingering mediaeval liabilities on the land that may be used to fund church repairs. However, for just £20, you may opt for Chancel repair insurance. The statutes governing Chancel restoration were amended in October 2013, and the Church is now responsible for establishing and filing liability with the Land Registry.
- Environmental Search – this report, which is produced by either Landmark or Groundsure, is used in the vast majority of transactions. Depending on the product your solicitor often employs, the report will include information regarding polluted land on or near the property, landfill sites, previous and current industries, comprehensive flood estimates, radon gas hazards, and ground stability concerns, among other things.
Optional and area-specific searches — Depending on the location or kind of property, or on the buyer’s unique concerns, further searches may be required or advised. These may include the following:
- Cornwall’s tin mining investigations
- Explorations in various locations of the United Kingdom and Cheshire Brine examinations
- Additional local government concerns include public paths, pipelines, noise abatement zones, and common land.
These property searches are frequently charged as additional expenses, so be careful to figure them into the conveyancing fees.
- How does the process differ if you are a cash buyer?
Once an offer on a property is approved, your mortgage provider will often want you to complete and return a variety of documentation. This is accomplished concurrently with the completion of the initial documentation requested by your instructed solicitor.
Once this is completed, your mortgage provider will inquire about the sort of homebuyer’s survey you like for the property and will arrange for its completion along with a value. Additionally, they will submit the formal procedures necessary to convert your mortgage in concept into an offer.
Obtaining a written version of this offer may take weeks or even months during busy periods. Without this proof of funds, contracts cannot be exchanged or completed.
When no loan is necessary and the purchase is done in cash, the process of enlisting the assistance of a mortgage lender is avoided. This would not necessarily expedite the conveyancing process, but it will eliminate the danger of external
- Make an offer
Choosing an offer price for a house can be rather difficult. While it is customary to make an offer below the asking price and then negotiate with the seller, if multiple parties are interested, you may need to make a higher offer.
Certain individuals, including the estate agent, may persuade you to make an offer on a home at your absolute maximum. Carry out your own research on the asking prices and also actual sold prices of similar properties in the area. Rightmove will allow you to do this free of charge just by entering a postcode of your desired area.
Once you have decided upon the size of the offer you would like to make, you must contact the estate agent or the private seller and inform them of your willingness to pay for the house. Four the purchase to proceed, there are a number of factors that should be borne in mind:
- That the lender assigns a fair market value to the property in accordance with the seller’s asking price.
- Acceptance of your mortgage application (a pre-approval does not guarantee acceptance).
- That the seller does not withdraw the property from the market due to a change of heart.
- That no other buyer makes a higher offer.
Once your offer has been accepted, contact your mortgage lender as they will want to do their own appraisal of the property. This is to ensure that the residence is worth the price you are offering and that their investment is secure.
- Have a survey carried out
Property surveys aid in establishing the state of the structure and identifying structural problems. While surveys are optional, they are frequently advised because it is important to be aware of any defects prior to making an offer and budgeting for any necessary repair work. If the survey finds that extensive repairs are necessary, you may be able to negotiate a reduced purchase price or have the seller remedy any faults. Bear in mind that the appraisal conducted by your mortgage lender is frequently just for the purpose of determining a loan valuation. They are frequently quite superficial and are not for your benefit (you cannot rely upon it – only the lender can), and for complete peace of mind, arrange for a survey to be conducted.
- Allow time for the report on title
When you are ready to proceed with the purchase, your conveyancing solicitor will handle the legal aspects of property ownership transfer. This entails submitting local searches to the proper authorities to determine if anything could affect the cost or enjoyment of your home. Additionally, they’ll do further investigations to ascertain property borders, access rights, and the existence of any current disputes, correspond with the seller’s solicitor, apply to the Land Registry to record the transfer of ownership, and resolve any other legal issues that emerge.
Read the report on title provided by your solicitor and discuss any concerns you have with them.
- Exchange contracts
After your offer is accepted and your mortgage application is approved, the next step is exchange of contracts.
Your solicitor will request payment of a portion or all of your deposit (often 10% of the purchase price) near the time contracts are exchanged for the purchase of the property.
You should have property insurance in place at this point so speak to your insurance broker in advance of this. If you choose to go with an online insurance company, or price comparison type arrangement, read their fine print very carefully. It is all very well getting insurance cheaply, but you will discover its true worth when you actually need it.
- Completion
Completion is the final stage of the purchasing process. This is where the seller’s outstanding balance is paid, ownership is transferred, and any remaining taxes (such as Stamp Duty) are paid.
It is at this point that you can move into your new home.
How we can help
We have a proven track-record of helping clients purchase their new home. We are a multidisciplinary firm and have all the expertise inhouse to satisfy the most exacting requirements of our clients. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Residential Property Solicitors
It is important for you to be well informed about the issues and possible implications of buying a residential property. However, expert legal support is crucial in terms of ensuring a positive outcome to your purchase.
To speak to a member of our New Enquiries Team today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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