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Properties are marketed with either a fixed price or ‘offers over’ (the lowest price the seller will accept)
Before you put in a bid on a property you will need to confirm that your deposit and your mortgage will cover the value of the property you would like to buy.
A mortgage ‘in principle’ from your lender is therefore required. Without this, your offer won’t be taken seriously.
Your Conveyancer/Solicitors is responsible for
You may have to pay a deposit, or pay for searches upfront. If the sale doesn’t go ahead, but you paid for the search upfront, then you’ll have wasted your money, so it’s worth carefully considering this in advance.
Before marketing the property for sale, sellers have to arrange a Home Report to show to buyers interested in their property. Get your free quote
This must include:
When you receive the Home Report for the property you want to buy, make sure to read it carefully. It will give you a good idea of the running costs of your new home. You can also use it to ask the seller about utility bills.
Once you have a mortgage in principle, your lender will arrange for a mortgage valuation to make sure the property you’re buying is worth the price you’re paying. Your mortgage lender may rely on the mortgage valuation contained in the Home Report if it includes one or needs an independent one.
Typical cost: £150-£1,500 depending on the value of your property.
You will also need to decide if you wish to rely on the survey contained in the Home Report or obtain your own survey. The surveyor who prepared the survey contained in the Home Report has a statutory duty of care to the seller who instructed it and to you as the buyer.
If you are buying a pre-war home, then you might consider a full Building Survey which is a lot more detailed report. Especially if it is an old building or one that needs refurbishment
Read more on what types of survey are there and what does it tell me for our advice on what type of survey might be suitable for your property.
The amount you offer will obviously depend on how much you’re want to offer given property prices in the area and anything else you wish to be included in the offer such as fixtures and fittings and of course the survey results. Your solicitor will do this in in a formal letter.
If there are several competing bids, the seller’s solicitor will open them at the same time on the closing date and ring your solicitor to tell you if you’ve been successful or not.
You may wish to wait until your offer is accepted before having your own survey done, in which case you make your offer subject to survey.
If your offer is accepted, the seller’s solicitor issues a “qualified acceptance”. this means that the property will be yours if contract details can be worked out. The solicitor will also hand over information about the property such as the title deeds and planning papers.
Go through everything you receive with your solicitor as they may raise queries about the paperwork. Neither you nor the seller is committed yet.
Once the contract details have been agreed the two solicitors exchange letters known as “conclusion of missives” both parties are then legally committed to the sale.
After the conclusion of missives, you may have to pay a holding deposit to secure the deal (typically £500-£1,000), although as there are usually penalty fees in the contract to deter either party from backing out at this stage the holding deposit is not always
Once you’ve agreed the contract, you need to protecting your new home with contents insurance.
Your solicitor will check the Title Deeds and discuss with you the “Title Burdens”. These are conditions attached to owning the property ranging from where rubbish bins can be put to more serious restrictions on how the property can be used and altered.
The seller then signs the transfer of the title deeds, known as the “disposition”.
Your Conveyancer/Solicitor should then contact your mortgage lender and let them know that the purchase is going ahead along with the proposed date of entry. This will allow your lender to issue the loan and security instructions to their nominated solicitor and to prepare the release of their loan monies to allow the sale to complete on the date of entry.
Once your offer has been accepted the seller’s Conveyancer/Solicitor should then contact your mortgage lender and let them know that the purchase is going ahead along with the proposed “date of entry” agreed with the seller.
This will allow your lender to issue their loan and security instructions to their nominated solicitor. In addition, this will also allow the lender to prepare the release of their loan monies to allow the sale to complete on the date of entry.
Your lender will then be asked for the remaining money owed in preparation for the date of entry (typically 90% if you had to pay a holding deposit). If you are a cash buyer, you will need to pay the rest of the purchase price via your Conveyancer/Solicitor
The seller’s solicitor will also prepare the Land Transaction Return for you to sign the title deeds to be registered with the Land Register.
Your solicitor will complete the transaction by paying the Lands and Buildings Transaction Tax (LBTT) due. This new tax was introduced on the 1st April 2015 for homes costing more than £145,000 and must be paid within 30 days of completion.
The new rates will only be payable on the proportion of the total value which falls within each band. In Scotland, buyers will pay 2% for homes that cost between £145,000 and £250,000, 5% for homes that cost between £250,000.01 and £325,000, 10% for homes costing £325,000.01 and £750,000. The rate is 12% for homes that cost more than £750,000.01.
You’ll now need to pay your solicitor’s bill at this stage together with the cost of the searches, minus any deposit already paid.
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