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The Steps of a Transactions
Whether you are buyer or seller, most property transactions
involve the following stages:
• Negotiation
• Exchange of contracts
• Action before completion
• Completion
NEGOTIATION
The price that you pay for a property, or sell it for, is
for you to negotiate personally or through your estate agent.
We are not valuers. The negotiations for the sale or purchase
must always be made subject to contract and, if a survey is
involved, subject to survey so as to avoid the possibility
of unintended exchange of contracts which will be legally
enforceable. If structural problems emerge, the price can
be re-negotiated. If the problems prove serious, you can still
withdraw from the transaction, prior to formal exchange of
contracts.
EXCHANGE OF CONTRACTS
This is when the binding commitment is made.
On exchange of contracts a deposit (normally 10%) is payable
by the buyer to the seller's solicitor. On the date scheduled
for exchange, this money must be readily available.
As a buyer, you should not exchange contracts until after
the following points have been dealt with:
• You have received a satisfactory structural survey.
•
If the purchase is dependent on outside funding, you have
received (and formally accepted) a satisfactory mortgage offer
from a bank, building society or other lender.
•
We are satisfied with all Local Authority and other searches
(dealing with planning and other practical matters which might
affect the property).
• We have reported (to your full satisfaction) the outcome
of our preliminary investigations into the property, and all
other enquiries affecting your final decision to proceed.
• The form of the contract is approved and dates agreed
between you and all other parties involved for completion.
• You are satisfied that any list of contents, fixtures
and fittings in the property which you are buying or selling
is correct in every detail.
• Appropriate arrangements have been made for paying
the deposit and providing all the money needed on the completion
date.
INSURANCE
Once contracts have been exchanged, you must complete the
transaction on the agreed date even if the property is meanwhile
damaged (by fire, for example). It is therefore vital that
you check that insurance is effected for a freehold property
to cover the rebuilding cost (not the price you will pay for
it). In the case of leasehold properties the insurance is
usually already effected by the landlord and no action is
then necessary by a buyer on exchange of contracts.
ACTIONS BEFORE COMPLETION
During this intermediate stage, when we will complete our
investigations into the seller¹s title, several practical
matters should be attended to:
• Notice must be given to the relevant authority of the
buyer¹s responsibility to pay Council Tax after completion.
• Water rates must be apportioned between buyer and seller.
If this is not automatically done by the relevant authority,
we can organise it.
• On the purchase of a leasehold property, the ground
rent and service charge must be apportioned and receipts produced.
The seller may have to pay part of an unquantifiable service
charge for which some provision or undertaking must be arranged.
• The seller must not remove any of the contents, fixtures
and fittings he has agreed to sell.
• The buyer must contact all relevant authorities to
ensure a smooth transfer of all supplies and services to avoid
disconnection and the inconvenience that this may entail.
COMPLETION
Completion is the last stage in any property transaction,
when the balance of the purchase money is paid to the seller's
solicitor and the transfer document and title deeds are handed
to the buyer's solicitor. We will deal with all the formalities.
It will very rarely be necessary for you to be present at
completion, which more often than not is now done without
a meeting by electronic funds transfer in exchange for the
deeds and key. Prior to completion the parties to the transaction
must have signed the requisite documentation or have it signed
on their behalf by an Attorney under a duly executed Power
of Attorney. If you are the buyer, we will inform you well
in advance of completion exactly how much money will be required,
and in what form. The keys of the property will be released
to the buyer following completion (or in advance subject to
prior arrangements). After completion, we will deal with all
mortgage documentation redemptions and releases, pay stamp
duty and register all necessary documents at the Land Registry.
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