Residential conveyancing is the legal process of buying or selling a residential property. Most people who aren’t familiar with the process use a solicitor to act for them when they buy or sell residential property. In addition, mortgage lenders typically require that the conveyancing process is carried out by a solicitor when they provide a mortgage for a property purchase.
When a residential property changes hands, the residential conveyancing process includes three stages:
The process starts when a buyer and a seller make an agreement to sell, and ends when the buyer of the property receives the keys. However, while every sale includes these three stages, the actual process you go through is different depending on whether you’re buying or selling a residential property.
Agreement to Sell
The agreement to sell is the point at which the conveyancing process begins. At this point, both the buyer and the seller have certain obligations.
For instance, sellers must complete a property information form with details about the property’s boundaries, work done on the property, any disputes with neighbours, and other issues. In addition, they must also complete a fixtures, fittings, and contents form, which details items that are remaining with the property, such as kitchen appliances or cupboards. A copy of the property title, and a copy of the contract of sale, must also be supplied.
During this stage the buyer will conduct various legal searches, arrange for home valuation and surveying, and take care of any other requirements. Ideally these need to be completed prior to the exchange and signing of contracts. The buyer must also review the property information form to ensure there are no potential problems. They’ll also review the fixtures, fittings, and contents form to check that it conforms to anything that might have been previously agreed upon.
This is also the point at which the buyer must arrange or finalise their mortgage, as they must have an offer in writing before the exchange of contracts can take place.
Exchange of Contracts
During this part of the process, the buyer will make a deposit on the property. If the seller has a mortgage, they’ll use this time to arrange full payment of the balance once the property has been sold.
Once these two matters are taken care of, the purchase and sale contracts are then signed by each party, and a completion date is agreed upon. Once the buyer and seller have signed both contracts the sale is final. If either party wants to back out of the sale after this point they’ll incur a financial penalty.
Depending on the specifics of the contracts, there may be clauses that provide for some circumstances in which either party can back out of the sale without penalty. For instance, the buyer might be allowed to back out of the sale if the results of a pending building survey show that the home has significant structural problems.
Completion of Sale
On the date of completion the buyer sends the balance of payment for the property purchase. The seller uses the funds to pay the outstanding balance of their mortgage, along with any fees and costs associated with the property sale. Any money that’s left over belongs to the seller.
Finally, the transfer deed is signed by the seller and then handed over to the buyer. The buyer can then sign the deed to be registered as the new owner of the property. They receive the keys to the property and the transaction is complete.
How a Solicitor can Help
Working with a solicitor is enormously helpful when you’re buying or selling a residential property, even if you have some prior experience. There’s a lot involved in property transactions, and the expertise of a solicitor can make it all much easier to deal with. It’s also the best way to ensure that the process can be completed without errors that might slow things down or cause negotiations to break down completely.
During the initial agreement to sell phase, your solicitor will start by examining the draft of the purchase agreement and any accompanying documentation. For leasehold properties they’ll also review the lease covenants and check with you that you’re satisfied with the terms.
If your solicitor has any concerns about any of the documents they’ll discuss these with you and with the other party’s solicitor. In addition you’ll be required to check all documentation yourself and let your solicitor know if you have any concerns.
The seller’s solicitor will arrange for the completion of necessary documents by the seller, and ensure that they’re passed on to the buyer when required.
Also during the agreement to sell phase, a solicitor will act on behalf of the buyer to conduct a range of legal searches. These searches are important to ensure there are no pending problems associated with the property. They include:
Valuation and surveys
For the buyer, additional requirements for property conveyancing include a mortgage valuation, which a mortgage company requires to ensure that the property value matches the mortgage value, and property surveys to inspect the home for potential issues such as structural problems, electrical issues, and repairs that might be needed. These surveys are typically carried out before the exchange of contracts takes place.
Types of surveys include:
Working with lenders and making payments
For the property seller, a solicitor can arrange the payment of the balance of the mortgage. For the buyer, a solicitor can arrange for the payment of the deposit and the balance of the payment for the property.
Contracts and documentation
Finally, a solicitor can ensure that all documents are completed correctly, signed, and delivered to the required parties. Each solicitor involved in a conveyancing transaction also works to ensure that the best interests of their client—whether buyer or seller—are represented.