A quick guide for first time buyers
Buying a home is stressful, especially for first-time buyers, so it's wise to do some research to ensure you know exactly what you're getting yourself into. Conveyancing is the term that refers to the legal process of transferring one person's property (the seller), to another (the buyer).
What does the process involve?
Put simply; this is what conveyancing looks like from start to finish:
- Get your mortgage sorted out before you start looking, so you know what your budget is.
- Find the property you want.
- Put in an offer i.e. tell the seller what you're willing to pay for the property. This is also the time to raise any conditions you have.
- The offer's accepted. At this point, you'll need a survey to check the property's condition, and your solicitor will review any legal issues.
- The checks will include a wide range of examinations, including the structural integrity of the property, whether there's any signs of subsidence, damp or damage, and whether there are any existing plans for the immediate area that may impact the property.
Your solicitor will also check with the local authority, utilities and environmental department to find out if there are common drains that serve multiple properties, there is any history of land contamination, or if you are responsible for any shared public access points. They'll also look at the deeds and boundaries to see if there are any disputes with neighbouring properties. If everything comes back okay, you can move onto the next level - buying your home.
- Exchange. This is when you pay your deposit, which means you can't back out of the deal without losing a lot of money.
- Completion: Now you hand over the rest of the money for the house in exchange for both the keys and the deeds. At this point, the property is legally yours.
You should note that nobody is legally bound to complete the transaction until contracts are exchanged.
Top Tip: As part of the process, ask for a list of fixtures and fittings the seller is willing to include within the cost of the property. Get this in writing. That way you'll manage your expectations and won't get a nasty surprise upon arrival.
What is Gazumping?
This term refers to another buyer offering more money to the seller than you have, and the seller goes back on the deal you made. Sadly, you can't legally protect yourself from this happening if this occurs prior to exchange. However, it's always worth asking the seller to take the property off the market as part of your original offer. This rapidly reduces the likelihood of another buyer submitting a higher price.
What is Gazanging?
Gazanging is when the seller cancels the sale to stay in their property. This could occur when the market price shoots up as there's a good chance the seller will make more money if they wait to sell in a few months' time.
In the unfortunate even that you suffer from either gazumping or gazanging, you'll probably lose a lot of money, especially if this occurs just before the point of exchange. Typically, both your solicitor and surveyor will have carried out a lot of work, costing you both your precious time and money. All you can do is act quickly when it comes to finalising the offer and exchanging the contracts. This will probably involve working with your solicitor and mortgage lender to speed things up.
Finding a mortgage and doing all the checks
If you are buying a property then make sure you've got your finances in place first. If you go house hunting before you've gone mortgage hunting, you'll complicate the process, especially if you don't get the full amount you need and have to scrabble around to make up the shortfall. Don't automatically go with the first lender you find; mortgage products change almost daily. There are so many mortgage lenders out there, all hustling for your business, especially if you've got an excellent credit score. It's almost inevitable that another lender will match your bank's offer, or even try to tempt you with a better deal.
Always get a personalised mortgage illustration: this should highlight the important features of your mortgage. Taking out this kind of loan is a massive commitment, so do your due diligence and don't sign up for anything you'll regret later on. Remember, a mortgage typically lasts for 25 years, so this is a long-term commitment and not something to be rushed into without a lot of careful thought.
Once you've got your finances straight, it's time to...
Choose Your Conveyancing Specialist
They'll handle all the paperwork and conduct the necessary searches to satisfy both the Land Registry and local council. They'll also:
- Draft the contract
- Manage the exchange of money between the buyer and the seller
It's recommended that you find a legal expert who is familiar with conveyancing early on. This makes the process a whole lot smoother and helps to ensure everything goes through as quickly as possible.
Michael Trott is a Solicitor and Partner in the Residential Conveyancing Department and can be contacted on 01323 64422 or by email firstname.lastname@example.org