Process for buying a property

1. When you have found the property that you would like to buy you will submit a verbal offer to the selling agent who has to deal with all offers in accordance with very specific legal requirements and in compliance with The National Association of Estate Agents' Code of Practice.

2. When the selling agent receives an offer they are legally required to tell their client (i.e. the vendor) as soon as reasonably possible and they must confirm offers in writing. The National Association of Estate Agents' Code of Practice, when dealing with offers, requires an agent to "take reasonable steps to find out from the prospective purchaser their availability of funds for buying the property and to pass this information to the client (i.e. the vendor)". Therefore if the selling agent asks for any proof of your position in this respect, for example a letter confirming that you have an appropriate mortgage offer in principal or details of your selling agent through whom you might have a sale agreed on your existing property, don’t be surprised as the agent is only fulfilling their fiduciary duty in line with compliance to the Code of Practice.

3. It is worth remembering that the Code requires the selling agent to act in the best interests of their client (i.e. the vendor) and to offer suitable advice to meet their client’s aims and needs.

4. When an offer has been accepted subject to contract, The National Association of Estate Agents' Code of Practice requires the selling agent to "consult and take their client's instructions as to whether the property should be withdrawn from the market, or continue to be marketed." In the latter case, the agent is required to so advise the prospective purchaser in writing. You will start to incur costs in relation to Local Authority Search fees, survey fees and possibly legal fees once the buying process begins, therefore it is not unreasonable in normal circumstances to expect the vendor to agree to cease marketing the property while the buying process is progressing normally.

5. Once an offer is accepted the selling agent will require the name and address of your solicitor and that of the vendor’s solicitor. The agent will then send a Sales Memorandum detailing the terms of the agreed offer and an overview of any related transactions (the Chain) to you and your solicitor and to the vendor and their solicitor. At Hobdens we carefully and regularly monitor the progress of the legal and physical aspects of the conveyancing process that takes place between an offer being accepted and the completion of the sale. Hobdens look for key milestones along the process to be successfully passed in order to identify that the sale is progressing normally, we keep all parties appropriately informed and liaise to provide assistance where required.

6. Your solicitor will need to know how you intend to finance the purchase and in particular if you rely on the sale of an existing property as a source of funds. They will want to know if you will be able to provide from your own monies a deposit (normally10% of the purchase price) on exchange of Contracts. If you are applying for a mortgage, then they will need to know details of the loan and lender.

7. Your lender will require you to complete an application form and pay a fee for a Valuation Report, which tells the lender if the property is adequate security for the amount of the loan.

8. A Valuation Report is the minimum Survey Report that is normally required by a lender or sought by a prospective purchaser. Currently, more popular is the Home Buyers Survey, which will provide both lender and prospective purchaser with an overview of the condition of the property and recommend on areas that require either or both immediate attention and repair or maintenance in the medium term. Sometimes, particularly on older properties a lender or a prospective purchaser will instruct their Surveyor to carry out a Structural Survey, which is normally more expensive but goes into greater detail in respect of condition reporting.

9. On receipt of a draft contract in duplicate from the vendor’s solicitor together with copies of the Deeds (and a copy of the lease if leasehold) your solicitor will ask you for the funds to cover the cost of a Local Authority search and will apply for the same. In the area covered by Arun District Council this Search will normally be returned to your solicitor in about ten working days. In the unlikely circumstance that a more urgent response time is essential you may be able to speed this process by asking your solicitor to carry this out a personal search.

10. Your solicitor will normally conduct other searches on your behalf in order to identify any problems that might be associated with the property. Such searches might include a Water Search that will consider aspects of the water and waste supplies and systems, an Environmental Search, particularly useful in areas prone to flooding or contamination, a Radon Search and a Bankruptcy Search at the Land Registry and Land Charges Registry to ensure the there are no prior charges on the property.

11. The results of the searches may require supplementary enquiries to be made by your solicitor or the purchaser’s solicitor and these will be answered, with help from the vendor as necessary.

12. As soon as your solicitor receives satisfactory replies to all searches and any supplementary enquiries and has received a formal mortgage offer from your lender they will normally report fully to you and go over the details of the conveyance so that you fully understand all aspects of your proposed purchase.

13. At this stage you will be asked to sign the Contract and give your solicitor a cheque or cleared funds (perhaps a Bankers Draft) for the agreed deposit due to be paid to the vendor’s solicitor on Exchange of Contracts. If you are selling a property at the same time then it may be possible for your solicitor to arrange for the deposit received on exchange of the sale to be used towards the deposit on your purchase.

14. It is only when Contracts are exchanged that you are committed to the purchase and it is at this stage that your solicitor will advise that you must insure the property. At Exchange of Contracts a fixed date is agreed for the Completion of the sale.

15. Between Exchange and Completion your solicitor will prepare all necessary purchase and mortgage documents, obtain the mortgage advance from your lender and send you a Completion Statement showing how much money they will require from you to complete the purchase after taking into account, the deposit paid, any net sale proceeds, the net mortgage monies, fees and disbursements and any apportionments (e.g. ground rent and service charges).

16. During this period you will need to arrange removals, inform gas, electricity, telephone and water authorities of the date of removal so that necessary arrangements can be made. Additionally, on receipt from your solicitor you must execute and return any purchase and mortgage documents and send your solicitor any balance of monies required (as per their Completion Statement) to complete the purchase, by way of Building Society cheque or Bankers Draft.

17. On Completion your solicitor will pay the sellers solicitor the monies needed to complete the purchase and obtain the Title Deeds, pay Inland Revenue Stamp Duty on the Transfer Document, register the purchase and mortgage at the Land Registry and pay any appropriate fees.

18. Once the Completion process is finalised you will be able to collect the property keys from the vendor’s agent, unless other arrangements have been made.

For more information on the whole process, please click on a link below: