You’re excited!! You’ve been qualified for a mortgage, and YHomes Estate Agents in York have the ideal house for you, you’ve viewed it and lost your heart to it, had your offer accepted and you’re all ready to go. So what happens now? How long will the conveyancing take? Do I have to do anything or do I just need to buy a bottle of bubbly for moving in day? And tea bags, obviously!
Well, unfortunately, there isn’t a definitive answer to all of those questions (although I prefer Earl Grey tea if you’re asking). It can take 6 weeks, or it can take a lot longer. That’s not to say that there’s a problem, it just varies from property to property and it always helps to know what to expect and what you can do to help the process run smoothly. Rather than go into the whole conveyancing process which is best explained to you by the solicitor who will be dealing with you, we’ve put together a few pointers to keep you going.
Here are some of the most frequently asked questions posed to us at YHomes Estate Agency in York once an offer has been accepted:
1. What date can I move in?
This is one of the most common and earliest questions asked after acceptance of an offer and one that at this stage no-one can answer. It will depend on you, and everyone in the chain having a good solicitor, and how many people are in the chain. Initially, the solicitor for the seller will need to send a draft contract to the buyers solicitor, and sometimes this takes quite a few days to collect everything together to send with it, such as title and plans. So it’s not a case of instructing them one day and sending the contract out the next. That may take a little while to collate all of the separate pieces of documentation.
As a seller you will need to respond to anything asked of you as quickly as possible preferably with certificates and relevant paperwork to support any modifications that you have had done to the property. As a buyer you need to notify your lender/financial advisor as soon as possible in order to get the mortgage procedure under way, which normally runs parallel to the legal procedure. No solicitor will offer even a possibility of a date for moving in until at least the mortgage is offered. If you have a long chain it is likely to take more time than if there is only one buyer and one seller.
2. How much will it cost me in solicitors fees?
When you’re looking for a solicitor to do your conveyancing, it’s worth getting a few different conveyancers to quote and provide a breakdown of costs before you instruct. If you’re just quoted ‘Fee plus disbursements’ you need to know how much the disbursements will be. They will differ for each company and if you’re not careful, what looks like a cheaper fee may turn into a much higher bill than you expected if they charge more for disbursements. These are the costs for searches, land registry charges etc. Things you can’t avoid! Usually, the quote for selling will be less than for buying as there is more to do for buying a property than selling a property. The breakdown for purchasing will also highlight how much you’ll have to pay for stamp duty so it will look considerably bigger on paper, but the stamp duty will be the same whichever solicitor you use.(see below) Some disbursements will require payment in advance, such as searches so you’ll have to have some funds in the piggy bank for ongoing payments, rather than waiting for the money out of your current property to pay all of the bills.
3. How ‘hands on’ do I have to be?
That depends on your solicitor I’m afraid. A lot of companies issue their clients with passwords to track the progress of the sale or purchase online. This means that you can see when the searches are returned, when the enquiries raised have been answered meaning you can physically see how things are progressing. As long as it’s a straightforward sale or purchase, that’s usually enough. Calling your solicitor too often can be counter-productive, but it’s beneficial to know if things are creeping towards a conclusion as you’ll have a lot to organise towards the end. And don’t forget, your everyday life is still carrying on whilst you’re going through this process, so the more notice that you have that moving day is approaching the better. So don’t be afraid to ask your solicitor if everything is running smoothly, if there is anything else that you need to provide. Forward planning before you buy (or sell) is invaluable. For the seller, handing over any certificates, guarantees or building regulations for any modifications and extensions at the start of the process saves your solicitor chasing you for them and delaying things and saves you having to contact your solicitor to find out what’s holding things up. For the buyer, having a lender on standby to lend you the mortgage that you require and can afford and accessible funds for the deposit can improve the whole process.
4. As a buyer, how much stamp duty will I pay?
This has recently changed so if you’ve bought before, the amount will be calculated differently:
|Purchase Price||Stamp Duty Rate on that portion of the purchase price|
|Up to £125,000||0%|
|£125,000.01 – £250,000||2%|
|£250,000.01 – £925,000||5%|
|£925,000.01 – £1,500,000||10%|
|Correct from 4 December 2014|
So, as an example, if you were purchasing a property at £310,000 you’d pay nothing on the first £125,000, 2% on the amount from £125,001 to £250,000 and 5% on the remainder, which comes to £5,500. Under the old rules you’d have paid 3% on the whole thing which would have come to £9,300.
5. What is the difference between exchange of contracts and completion?
Exchange of contracts is the first legal commitment, but the property still belongs to the seller. Exchange of contracts means that all of the paperwork has been completed to both solicitors satisfaction, your mortgage has been offered and all parties have agreed a completion date (Be aware that there may be more people in the chain than just you and your seller and buyer so it may take a couple of attempts before you can all agree on a completion date so be prepared to be flexible). It means that the buyers cleared deposit monies have been lodged with their solicitor, ready for passing to the sellers solicitor and that the buyer has buildings insurance in place for the new property. The lender will have confirmed that they can release the funds for the chosen date for completion. It also means that the completion date is final, not subject to change so you can finally arrange things knowing that the date will not alter. Basically, it’s a legal ‘under starter’s orders’ for the completion day, which is why exchange is what everyone strives for. Sometimes there is a few days between exchange and completion, sometimes there’s longer, depending on what each buyer and seller needs but usually the lender will need at least 5 working days for the release of the funds, so this is why sometimes there has to be a minimum time between the two. All buyers are legally committed to purchase and all sellers are legally committed to sell. That way you won’t end up homeless or with two properties to pay for!!
Completion is the day that the property changes hands. Sometime during the day (and no-one ever knows when!) the sellers solicitor will receive the funds (mortgage and deposit) from the buyer’s solicitor and then, and only then, can the buyer have the key for the property. The buyer may have to wait for the seller to finish moving out, but there is often a little overlap. If the buyer fails to complete they will forfeit their deposit and penalties will be imposed (I’ve only ever known it happen twice in thirty years. Once when the seller died between exchange and completion, and once when the buyer was arrested!).
Buyers will need to pay in advance for some procedures, such as searches and surveys.
Buyer solicitor will need the deposit in cleared funds before they can exchange contracts.
Buyers will need to make sure that mortgage and building insurance is organised and in place for exchange of contracts.
There may be more than just you and your seller / buyer in the chain so be prepared to be flexible on dates.
There is no set time for completion on the day – so try to be calm.
If you have any questions about the home buying process then please give us a call and we will be happy to help…