Helpful Tips for Buyers
Stamp Duty
On the 4th December 2014, the government introduced changes to how stamp duty is charged on residential property.
Instead of a set percentage dependent upon the total price paid for a property, it will be charged at different rates depending on the portion of the purchase price that falls within each rate band.
Calculate Your Stamp Duty
Use this online stamp duty calculator to work out exactly how much you will have to pay:
Stamp Duty Calculator
The Survey
A surveys is like the MOT test for homes. They will tell you the condition of the home and point out weak areas. They are not usually required, but they can give you the peace of mind of knowing just what you are buying.
Surveys are not to be confused with valuation reports, which are commissioned by mortgage lenders to confirm that the property is adequate collateral for the mortgage loan.
Types of Survey
There are three types of surveys that you might want done on your new home.
Full building survey
This is the most comprehensive of the three types of survey, also called a structural survey. It takes several hours to prepare, with each element of the property inspected to determine its condition. Any necessary repairs will be identified. You will know, at the end of the survey, if the house needs a new roof or a new electrical system. It is recommended for those who need a building to be thoroughly inspected.
RICS Homebuyers report
While each element of the property is inspected, it is not done to the same degree as a Full Building Survey. The survey is based on a pre-printed form prepared by the Royal Institution of Chartered Surveyors. This type of survey reports on those areas which affect the value of the property.
Defect report
This survey concentrates on a particular defect specified by the client. For example, if you noticed that the walls had several cracks in them, you may want a surveyor to come in and figure out the cause and risk associated with the problem.
Where to find surveyors
You should commission your survey only by Chartered Building Surveyors. Look for the initials FRICS or MRICS next to their name.
Cost and time
The cost and time to complete your survey will depend upon which type of survey you have commissioned, and the size, condition and location of your home. It is best to get two or three quotes from different surveyors in the area to assess market rate. You may also wish to speak to your us about typical costs in the area.
Conveyancing is the transfer of ownership of property or land from one person to another. It is necessary to insure that the new owner has proper legal title to the property.
Who does the legal work?
Legally, conveyancing can be undertaken by anyone. However, the process can be time consuming and complicated and most people prefer to employ a professional. In addition, most lenders will insist on a solicitor or licensed conveyancer acting for them if the transaction involves a mortgage.
While "family solicitors" can do the work involved, many people opt to use specialized conveyancers, who are qualified in property matters. In England and Wales, both solicitors and licensed conveyancers can deal with property conveyancing. Licensed conveyancers do not operate in Scotland. The important thing to remember when choosing a conveyancer is to check that the person that you choose to deal with your conveyancing matters is regulated by a governing body.
Conveyancing process
Your conveyancer should undertake the following...
Receipt of draft contracts
This contract is a legal document that sets out the terms of the sale. It is initially drafted by the seller's conveyancer. It will contain details about the property, items that are to be included in the sale, the buyer's and seller's particulars, how much the property will be sold for, and the transaction date. It has two parts - The Particulars of Sale and The Condition of Sale. The Particulars describe the property and details of the lease or freehold. The Conditions have information about the proposed completion date and any deposit required when contracts are exchanged.
Preliminary work
Before he starts working on the contract, your conveyancer will send a list of questions to the seller's conveyancer, such as:
- What is included in the sale? What contents will the vendor leave behind?
- What are the boundaries of the property? Who owns and is responsible for any perimeter structures (like fences, hedges, etc)?
- Is the property connected to all the appropriate utilities?
- If it is a leasehold, he'll ask: Who is the managing agent? Who is the freeholder? Is the owner up to date with service charge bills and ground rent?
Property Information form
Your conveyancer will send you a summary of the items that will go into the draft contract, such as fixtures, fittings, boundaries, etc. You should check that it meets your expectations.
Registry search and Land charge
Your conveyancer will check that the seller actually owns the property and is permitted to sell it. He should include any convenants associated with the property. He should obtain the title deed and the Land Registry certificate for the property.
Local searches
The local authority will check if new developments are planned (such as new roads or other construction) next to the property. The authority should also check water drainage and planning restrictions on and next to the property. These searches can take anywhere from two to ten weeks to complete, dependent upon your local authority's backlog of requests.
You can speed up the process by employing a surveyor to do a Personal Search. This means that you pay an additional fee to a local expert who will usually do the same work as the council in a week or less. This surveyor can also expand the search to look at developments happening in the area, not just next to your property.
Draft contract approved
Once the buyer and seller are satisfied with the terms, draft contracts are sent out to both parties for signature.
Formal mortgage offer
The buyer needs to assure the seller that he can pay for the property - through a mortgage in this case - before he will hand over the keys.
Arrange for completion
In the ideal world, you would exchange contracts the same day you pick up the keys. But that doesn't always work. You may exchange contracts several days or weeks before formally completing the sale by taking possession of the keys.
Legal stages in England and Wales
First stage: Sale agreed
Seller's conveyancer
- Obtains your title deeds and asks you to fill in a detailed questionnaire.
- Prepares and sends out a package of legal information and a contract for sale.
- Requests a settlement figure for your mortgage and any other secured loans.
- Liaises with all relevant parties and negotiates a date for moving ('completion').
Buyer's conveyancer
- Organises searches at the local authority on your behalf, and asks you for a sum on account of such expenses.
- Receives replies to questions raised, and reports to you with the contract for signing. Requests your deposit.
- Receives mortgage offer and deals with all the conditions on your behalf.
- Receives search results and deals with any problems revealed.
Second stage: Exchange of contracts
Seller's conveyancer
- Receives the deposit as a down payment.
- Organises final accounts and prepares a final settlement for your approval. Collects any balance of funds required.
- Approves the deed of transfer and arranges for you to sign.
Buyer's conveyancer
- Hands over the deposit to the seller's conveyancers.
- Prepares a final completion statement for your approval. Collects any balance of funds required.
- Prepares the deed of transfer and mortgage deed and arranges for you to sign them.
- Organises final searches to check for debts and bankruptcy.
Third stage: Completion
Seller's conveyancer
- Pays off the mortgage and notifies HM Land Registry.
- Hands over the deeds and sends balance of money to you.
Buyer's conveyancer
- Receives and arranges for payment of any stamp duty to the Inland Revenue.
- Prepares and sends off application to HM Land Registry to register your ownership.
- If property is mortgaged, sends deeds to the lender.
- Once contracts are exchanged, the purchase of your property is legally binding. No backing out now. At this stage, the money starts moving in the seller's direction.
Payment
- The seller receives your deposit (if there is one), when you exchange contracts.
- The seller's conveyancer finds out how much the seller still owes on his current mortgage (if any).
- The seller's conveyancer approves the transfer deed - which formally transfers ownership of the property to you - and arranges for the seller to sign it.
- Your mortgage company will send the balance of the purchase fund to the seller's conveyancer.
- The seller's conveyancer will send the transfer deed to your conveyancer.
- The seller's conveyancer will take his fee and expenses out of the funds the seller has received.
- The seller's conveyancer will clear the balance of the seller's mortgage. For example, if the seller still owed £30,000 on his mortgage, the seller's conveyancer would pay that off from the funds sent by you.
- The seller's conveyancer will send the remainder of the money to the seller.
- Open the champagne, your purchase is now completely finished!
Countdown checklist
There are so many things to think about, that it is helpful to have a quick checklist handy to know you've done it all.
One Month before Move
- Arrange for your post to be redirected to new address.
- Get quotes from removal/van hire companies.
- Arrange for meter readings (electricity, gas) and disconnection of services at your current address.
- Arrange for phone service to end on moving day at your current address.
- Arrange for council to dispose of any large items that need to be thrown out before move.
- Start working through your friends list to inform of your new address.
- Confirm date and time with removal company.
- Start packing everything that is not an essential everyday item.
- Write out instructions for any appliances you are leaving behind at your current address.
- Settle any local bills (newspaper delivery, etc) at your current address.
- Plan process for moving your pets (i.e. fish can be challenging).
- Transfer utilities and phone accounts to your name at your new address.
- Make sure all your essentials are packed in one place.
- Put all your valuables and documents in a safe place (you may consider moving them yourself).
- Put down dust covers or plastic sheets to protect carpets./li>
- Insure all meters have been read, and services are disconnected at your current address.
- Go through every room, closet and cabinet to make sure you have not left anything behind.
- Put down dust covers or plastic sheets to protect carpets in your new home.
- Check that all the items listed in the inventory are in your new home and in condition you expected.
- Check for instructions on how to use all the appliances in your new home.
- Insure you have a final meter reading on electricity and gas from previous owner of your home.
- Go through every room, closet and cabinet to make sure you are satisfied that nothing has been left behind.
One Week before Move
- Confirm date and time with removal company.
- Start packing everything that is not an essential everyday item.
- Write out instructions for any appliances you are leaving behind at your current address.
- Settle any local bills (newspaper delivery, etc) at your current address.
- Plan process for moving your pets (i.e. fish can be challenging).
- Transfer utilities and phone accounts to your name at your new address.
- Make sure all your essentials are packed in one place.
- Put all your valuables and documents in a safe place (you may consider moving them yourself).
- Put down dust covers or plastic sheets to protect carpets./li>
- Insure all meters have been read, and services are disconnected at your current address.
- Go through every room, closet and cabinet to make sure you have not left anything behind.
- Put down dust covers or plastic sheets to protect carpets in your new home.
- Check that all the items listed in the inventory are in your new home and in condition you expected.
- Check for instructions on how to use all the appliances in your new home.
- Insure you have a final meter reading on electricity and gas from previous owner of your home.
- Go through every room, closet and cabinet to make sure you are satisfied that nothing has been left behind.
Last Day before Move
- Make sure all your essentials are packed in one place.
- Put all your valuables and documents in a safe place (you may consider moving them yourself).
- Put down dust covers or plastic sheets to protect carpets./li>
- Insure all meters have been read, and services are disconnected at your current address.
- Go through every room, closet and cabinet to make sure you have not left anything behind.
Moving Day
- Put down dust covers or plastic sheets to protect carpets in your new home.
- Check that all the items listed in the inventory are in your new home and in condition you expected.
- Check for instructions on how to use all the appliances in your new home.
- Insure you have a final meter reading on electricity and gas from previous owner of your home.
- Go through every room, closet and cabinet to make sure you are satisfied that nothing has been left behind.
