fatscoobyfella

May be in the position to sell our house and move without havin to have any kind of mortgage at all.
What is the position with the house were going to buy?What are the legal requirements what we need to buy the house..ie solicitors,land search,surveyors etc etc..?
Are they needed?Or are they mainly appointed for security for the people that are giving you the mortgage?

Any info or good links for info appreciated

TIA..

Dracoro

I don't think you HAVE to do them (a legal bod will confirm) but you'd be stupid to buy without doing the relevant searches and survey. Often they reveal stuff that the incumbent owners don't even know about.

fatscoobyfella

I realise that..but surveyors p**s me off..they inspect a house then if you find anything wrong there NOT accountable....surely a builder friend of mine(who buys and sells houses) could do the same job and would give it a better lookin over..
And solicitors...Is there job exactly the same given the conditions we would be buying under??

Its confusing at the best of times!!

Dracoro

re: the survey. Get a full structural survey done. the ones done for mortgages are just valuation surveys (i.e. it's worth what you're paying and covers the loan). valuation surveys are for the benefit of the lender, not the buyer.

A surveyor is like a car inspector, you get what you pay for but there's always gonna be stuff that can be missed. The better surveyor you get the less likely things will be missed. Depends on how much you wanna pay really.

ProperCharlie

I would say it depends to a certain extent on the type of house you intend to buy. If it is Victorian or older, a structural survey is likely to reveal a shed load of things wrong with it. However, most of those things have probably been wrong with it since about 10 minutes after they finished building it, and it's still upright, isn't it? On the other hand, I did just put my foot through the floor in the hall...

mattstant

Fair points I have built and sold hundreds of houses and i have personally seen surveyors leave the car running they were in and out so quick !!!!!!!

Your builder friend would probably do a quite competent job but crucially will have no professional indemnities to fall back on if there are some hidden structural faults.

At least you are in charge of who you use and how much you spend on a decent survey.

Solicitors and or conveyors are an absolute must there are literally thousands of pitfalls from planning blights to ancient covenants and rights of way through your front room (dont laugh it HAS happened)

J4CKO

iTrader: (1)

We bought ours without a mortgage, still did all the usual stuff though, its just too big a purchase to take a risk with.

Harry_Boy

If you are purchasing without a mortgage, there is absolutely no need to employ a solicitor or licenced conveyancer. It may be wise to do so, but there is nothing to say you have to.

As is mentioned above, you would be well advised to have a reasonable survey undertaken, ideally a full structural. This will be costly (much more than a solicitor), but is money well spent.

With regard to the legal process, the seller's solicitor will draft the contract, which will have to be checked so that you know exactly what you are agreeing to buy. It is unlikely that they will try to expoit your lack of legal advice, but it is theoretically possible.

The fixtures & fittings and property information schedules form an intrinsic part of the agreement, and are therefore legally binding.

With regard to the 'title' to the property, most land/property is now registered at the Land Registry, as this became compulsory throughout the UK some years ago. Registered land is relatively easy to convey, and therefore should not cause you too many problems.

Covenants and relevant easements (ie restrictions and rights) are noted in the register, as are any charges (ie mortgages and so on) to which the property is subject. You MUST obtain an undertaking upon completion that any outstanding charges will be discharged from the propceeds of sale.

The problems arise if you are buying an older property that has not changed hands for many years, and therefore is still unregistered at the LR. You MUST examine certified copies of the title deeds and check for all rights and restrictions. After all, it can be frustrating to pay a few hundred thousand for your dream home, only to find out that the local parish can organise its May Day celebrations on your front lawn. Don't laugh - it has happened......

When you come to exchange contracts, this tehn forms the basis of a binding agreement. At this point, you will pay a deposit (in cleared funds) usually of 10%, unless this is passed up the chain (if there is such a thing in the case of your transaction) in which case it could be less.

When exchange takes place, a completion date is inserted as a term of the contract. This is normally a fixed date, unless it is a new property (in which case you would be served with Notice to Complete within a certain time thereafter).

On completion, you will receive the keys, the titles deeds, an undertaking to discharge any pre-existing loans secured on the property and the transfer document (which you as the buyer are supposed to prepare - don't worry, many sellers lawyers will give you a hand - they're not complex).

Oh, and don't forget, you will need to undertake a local search (or make equivalent enquiries) prior to exchange, as well as a Land Registry search on the property between exchange and completion (if it's registered) or a land charges search (if unregistered).

Local Search? It's a document that tells you whether there are any local restrictions on the property (eg Tree Preservation Orders), and whether the drains, sewers and roads serving the property are adopted (if not, you pay!), as well as any planning permissions and building regulations approvals etc. It must be read carefully and understood, otherwise your use & enjoyment of the property may be severely restricted.

After completion (assuming the sellers move out when they have agreed to!), you will have to pay stamp duty (and fill out a declaration as to the price paid), as well as registering the property at the appropriate district Land Registry.

Hope I've not put you off.... If not, enjoy!

PS. PM me if you need any 'ongoing' advice.

paul w

Harry Boy,

Sorry to go off topic but do you have any info or links to your old site with the diy afr on it.

Thanks Paul

Harry_Boy

Paul - confused mate.... Are you sure that was me?

Diesel

Surveyors - pahh! Money for old rope - several hundred quid and a legal 'yer, but, no, but, yer, but - it wasnt me' if you find the house is sinking. Best get a mate you TRUST! D

paul w

Must have been another Harry boy,it was a scooby site and had a few pages and diagrams on building the diy afr that john banks designed.Cant find the original thread anywhere.

Cheers

Diablo

As has been said above, nothing is legally required, but you would be out of your box not to employ a solicitor to carry out the conveyance for you.

RB5320

Re surveys, I personally will not bother in the future. I recently bought a very run down Georgian cottage. Having already had a good look round I knew there were quite a few problems. I paid £900 for a structural survey and all I got back was: "roof looks a bit dodgy, seek specialist advice, there's some damp, seek specialist advice, wiring looks old, seek specialist advice, blah blah blah..>" No help to me whatsoever. As said above, if you know a good builder, get them in to have a proper look around. You wont have any comeback if they miss something, but then again, my survey report is full of "to the best of our knowledge" and "as far as can be reasonably expected" type comments, all designed to protect the surveyor in the event that they have missed something critical. On the other hand, the survey did help me negotiate a further £10k off the asking price, even though all the faults were already known to both sides, so I guess it paid for itself in that respect.
As for the conveyancing, get a professional to do it. Should only be £500 or so. There is enough stress and hassle involved in buying a house without adding even more work.

Steve

MartinM

One point, and one (multi-part) question:

- when I bought my BTL, I had a survey done purely as a means of negotiating the price down. Seller and me knew what the faults were, but when they're written down by a surveyor they can be more easily negotiated over. Cost £300 or so, and I got £1500 off the price (which was already much lower than what he wanted!). Result

- we are close to paying off our mortgage. When we do so, do we have to register any changes of ownership with the LR? Is that a solicitor job or DIY? I presume the mortgage co. will send us the actual deeds and I need to store them somewhere? Where?

Apparition

We were in the same boat last year. Bought a 5 yr old house and had a bit of change in our pockets when we'd finished with no mortgage. (South to north move).
We had a full survey done. And a solicitor to sort the legal side. Since we've been here we've had to spend well in excess of £1,000 on repairs to the Boiler, the shower pump, electrical problems (which are still ongoing!), and there's a seal gone in one of the double-glazed units which we discover is not now covered by the HNBC (or whatever its called) guarantee.
My point is, the actual structure of the house might be good, but all these niggles have been an expense we didn't anticipate. So, it seems, you can supposedly cover yourself 'til the cows come home, but there'll always be something creeping around the corner to jump out at you!

Apparition

MartinM ~ You do have to inform the LR. As for storage, our deeds sit at our solicitor's office until we instruct otherwise.

Harry_Boy

When you pay off your mortgage, the bank/building society/lender will offer to store your deeds for a fee (usually).

Most solicitors will store them for nowt/very little. reason being, they will hope to get the conveyancing when you sell, or probate when you die....

In practice, when the mortgage is paid off, you need to obtain the original Land registry charge certificate, plus a deed of release from the lender, which confirms that the mortgage has been discharged.

These are sent off to the Land registry, which notes in the official register that there is now no 'charge' or mortgage on the property. It also sends you the land certificate, which is in effect your title deeds. As mentioned above, if your property is 'unregistered', it's a little more complex, but that is unlikely, as compulsory registration occurred many years ago....

HTH

Brit_in_Japan

You might be interested to know that if no mortgage is involved, the seller's solicitor can represent you (the buyer) too. The benefits are reduced costs (to you and the seller) and a quicker process as there is no shuffling of documents back and forth and one solicitor blaming the other for delays.

fatscoobyfella

Good advice from all...If we got the sellers solicitor to sort out all the neccesary things,could that not work against us??
Back handers and the like....?....Jesus im paranoid!!!

Also..whats it likely to cost..Solicitors conveyancy fees and an independant surveyor(Grrrrr!!!) and whatever else.?
Just trying to get some kinda idea of price..

TIA

Harry_Boy

The seller's solicitor can't give you any advice mate, as that would be a conflict of interest. All they could do is draft the transfer document on your behalf - as I said earlier, that's the easy bit.....

The actual conveyancing fees are a relatively small part of the overall transaction costs. The local search, Land Registry fees and (especially) stamp duty are far greater. Typically, in our area, conveyancing can be had for around £300 plus VAT.

Incidentally, we all missed this one earlier, but will you be selling your existing property at the same time? If so, that's where the interesting bit happens.....

For a sale, you need to draft a contract (difficult, as you can't get your title deeds if you have a mortgage, as your lender won't release them to anyone but a solicitor/licenced conveyancer). You can get Office Copies from the LR, which will help.

The fun bit comes when you try to pay off your mortgage from the sale proceeds. Your buyer's solicitor will be VERY nervous about this, as he won't hand over the money to enable you to do this, as you can't give a legally binding undertking to use it to pay off the outstanding loan(s) secured on the property.....

Always a fun one....

fatscoobyfella

Right harry....

Run that by me again...To answer your question...yes we would be selling a house,paying off the mortgage(around 13k).And then moving to a different area into a different house...
Well thats the plan!!!

So...if we sell the house now,the money wont come to us directly??Who would it go to?
With such an amount(just 13k outta 180k),who would be holding our £167,000??.Surely thats ours money and no one elses??
Are you saying that the buyers solicitor wont release the money until the deeds are handed over??

If this is so..how do we get our hands on our own money??

I cant work this out...I must be thick.

Harry_Boy

Okay - so the problem isn't because you're selling as well as buying, it's simply because, like 90% of us, you have an outstanding mortgage on the property.

It's not the amount of the mortgate that's relevant, just the fact that there is a debt secured on the property, and that it is going to be discharged out of the sale proceeds.

The legal process in England & Wales (don't ask me about Scotland...) provides that, when the buyer's solicitor/licenced conveyancer transfers the money to the seller's solicitor, the seller's solicitor agrees to provide the following by return:-

1. Keys - although in practice these pass diectly between the parties.
2. Transfer document, signed by the seller.
3. Charge certificate (or title deeds, if unregistered land).
4. A legally binding undertaking to discharge all outstanding financial charges (ie mortgages) secured on the property, together with evidence of this discharge.

Unless you are using a solicitor/licenced conveyancer, you will not be able to provide either of the two items referred to in point 4.

What happens is that, under normal circumstances, the buyer's lawyer either produces to the seller's solicitor a client account cheque or (more likely) a CHAPS same-day bank transfer of the full purchase monies (less any deposit already paid). Out of the money received, the seller's lawyer will pay off the mortgage(s) on the property.

Because you would be acting for yourself, you as a 'non-legal' can't provide the binding agreement to pay that mortgage off out of the sale price.

So, what would have to happen is as follows:-

You would apply for a redemption statement from your mortgage provider, showing exactly (to the penny!) what is the amount required to discharge the mortgage on the agreed completion date.

You would give that to your buyer's solicitor, who would then hold back the circa £13k, and would arrange to pay this direct to your lender.

The buyer's solicitor would then let you have, either by cheque, BACS or CHAPS, the balance due to you, after discharging the loan.

No doubt, the buyer's solicitor will want to charge you for that privilege.

Edited to add.....

The buyer's solicitor will also need the original deeds, which your bank/building soc will only release once the mortgage has been paid off. This again differs from the usual practice, where solicitors can obtain deeds on undertaking from lenders, but you can't.

Any Qs - just ask.....

fatscoobyfella

Your a good man Harry...well put....So..if we appoint a solicitor to do the neccessary,do all of the points you have made fall onto his shoulders and not ours?
If so..that does sound a lot easier...would the money from the house then go to our solicitor,then to us?Minus the remaining mortgage of course..
What kinda money do you think is involved Harry?you seem the man to ask..And what about time frame...?
Say for example..buyers seen the house and were happy,had a survey and all is well..from when the buyers solicitor has there money in his hand,to ours receiving it,to us getting it in our hand as were?

Sorry for all the Q's mate..im totally clueless in this area,as you probably guessed!!!

Milamber

iTrader: (2)

And you're thinking of doing it without a Solicitor

Jonathan Davies

You need a lawyer, I'd say. Harry Boy clearly knows the area, and has pointed out many of the possible pitfalls... the main one in my mind being the banks.

I'd say it's worth the money to get a fairly good one, especially if you're buying and old house. You might not care about the wrinkles in the legal title now, but if you sell it those problems will be negotiation points for the buyer. For example, a mate of mine just bought a flat. It's not clear from the lease who is responsible for the attic space, so his lawyer got an indemnity from the seller to cover any future costs, and the defect in the lease was a price negotiation factor.

He's in a better position because his lawyer looked at the lease and made a fuss. You might not have a lease, but freehold titles can have problems too... the point is that it's when you're the buyer that you can negotiate these points - when you come to sell, anything you didn't get the seller to fix before you bought it becomes a potential problem for you when you're the seller.

My mate, incidentally, thinks he more than covered his costs through knocking the price down. That surprised me.

P.s. I'm a lawyer and there's absolutely no way I would do my own conveyancing.

fatscoobyfella

I honestly didnt think it was that involved..thats why i was asking for links so i could read up about it..
But there is NO WAY i would even think about it now.
When initially getting our mortgage for our present house,everything was taken out of our hands and sorted out..I didnt need to "know" anything really...

Being in a different and "better" position now,i thought i may be able to cut out a few of the middle men and save a few £££££ at the same time...

I now stand corrected....

Any idea of total cost anyone???

Harry_Boy

Hi mate. Yup, for my sins, I did ten whole years of conveyancing..... Mainly commercial property, retail leases and so on. Nevertheless, the same principles apply.

A solicitor (or licenced conveyancer for that matter) will undertake all the points I made earlier.

For the sale of your current property, he or she will obtain the deeds, draft the contract, arrange exchange of contracts (ie when the agreement becomes binding) in acordance with your instructions, and will sort out the outstanding matters on completion (ie the point at which the money passes over, and the transaction is finalised).

On the sale, your lawyer will receive the sale monies from the buyer's solicitor. The first thing he must do is pay off all loans & mortgages secured on the property. Then (as most professionals do!) he will take his fees off the balance (although he is not automatically entitled to do so). He will also (subject to your agreement) deduct any estate agents fees (unless you are in dispute for some reason).

The balance is then due to you, although in practice this will normally be applied to your purchase. Any remainder, once both transactions are completed, will be given back to you.

One point to remember is that, generally, it is desirable to complete both the sale and purchase on the same day. The obvious reason for this is that most homebuyers cannot afford to own two houses (even for a short period of time - unless you can 'bridge'). Equally, you don't really want to be homeless....

So, in order to achieve this, the lawyer will normally exchange contracts simultaneously on both the sale and purchase. Thankfully, this doesn't require two phones.... The Law Society rules allow the 'release' of a contract, subject to certain pre-conditions (like completion date and available deposit), so that concurrent exchange can be achieved. This means that you are not bound to one transaction without the other. Which, let's face it, would be disastrous for many sellers & buyers.

This simultaneity of exchange isn't available to non-qualified buyers & sellers (ie, it's a closed shop!), because you can't ascribe to the Law Society's rules.

OK - so I hope this helps mate. And - anyone else reading all this stuff - yeah, you CAN do it without a solicitor. But, most homeowners are busy people with their own careers to worry about.

And, for the fairly small overall cost (compared to estate agents and surveyors), it's probably worth employing a professional, if nothing more than to take the hassle out of the transaction, and allow you to concentrate on the important bits.

Offer - if anyone needs a chat on this, please PM me.

And - BTW, I always employ an independent solicitor (even though I keep a beady eye on them...)

Harry_Boy

Hi Mate.

On sale, should be just the lawyer's costs plus VAT, plus any agent's fees.

Legal costs may be around £250 to £300 depending on what the competition is like in your area.

On purchse, you'll have LR fees (not too bad - £100 plus), local search (similar sum), land charges (if unregistered land - pocket money!). If you're getting a mortgage, there's a bankruptcy search against you to cover the lender (more pocket money...)

You might have to get a mining search, depending on the region, and perhaps even a brine extraction search.... Only tens of pounds each.

The big 'un is Stamp Duty. Thanks to the government's failure to index this properly, you pay 1% above £120k, and a ridiculous 3% above £250k. Above £500k, it gets worse....

So, don't blame the lawyer - he or she is only a collector for HM Government....

PMs welcome guys.....

Harry_Boy

PS. Time frame.... Mmm.... Difficult one. Depends totally on the length of the dreaded transaction chain.

Remember mate - you can only move as quickly as the slowest link in the chain. So, if Mr First Time Buyer at the bottom is waiting for his 100% mortgage, and has a problem with his survey or valuation, no-one further up can exchange until he's in a position to proceed.

That is, unless someone is in a position to bridge their finance, which a decent lawyer will advise against, as it's open-ended, and has no certainty that, if you exchange on your purchase, you'll be able to exchange on the sale as well. So, if the sale then falls through - bingo, you have two houses.....

That's why so many people critcise the current conveyancing process in England & Wales. And that's why the government has pledged to reform the system in 2007.

But, to answer the Q.... An average transaction might take 6 weeks to 2 months. And, most of this time will be waiting for other people to get their mortgage offers in place.

Golden Rule - everyone has to have their contract & title ready and 'investigated', their local (and other relevant) search(es) available and, most importantly, their mortgage offer in place. No lawyer will exchange without finance in place. To bind their client to a contract for a purchase without finance would be negligent, unless the client had expressly instructed the lawyer to do so, which would be folly.....