What is conveyancing, and how does it work?
The process of preparing legal documents for a property sale, remortgaging, or lease extension is known as conveyancing. It also involves transferring legal ownership if the property is sold.
When you're buying or selling a property, you'll need a conveyancer or property solicitor to handle the Land Registry, create contracts, and move the money. They will also make sure that the legal ownership of the home is transferred from seller to buyer as part of the transaction.
In this article, we'll show you what the conveyancing process is about and how to select the best solicitor or conveyancer for you.
The conveyancing process is made up of a number of distinct stages.
Every transaction, however unique, follows a similar pattern:
1. You select a solicitor or conveyancer to act on your behalf (ideally before step 2, but you may also hire one after making an offer if you haven't already done so).
2. After you've made an offer on a house, the seller agrees to it.
3. The buyer's solicitor sends a letter to the seller's solicitor, requesting a copy of the contract and other selling paperwork.
4. During this period, you'll do a home survey and get insurance for your structures.
Exchange of contracts
5. Both you and the seller sign copies of the contract. You also stipulate when the job will be finished.
6. Contracts are completed. Now that the transaction is legally binding, you must obtain building insurance.
7. An exchange deposit is a cash advance you give to the seller.
8. Your conveyancer lodges an interest with the Land Registry after the exchange.
9. On completion day, your conveyancer transfers all remaining funds to the seller's solicitor. Your conveyancer typically receives mortgage money from your lender the day before closing. On conclusion day, your conveyancer sends all outstanding funds to the seller's solicitor.
10. When the seller's lawyer confirms that the money has been received, you are the proud new owner of the property.
Following the transaction
11. The conveyancer notifies the Land Registry of the transfer of property.
12. If you owe stamp duty, your solicitor will usually arrange for it to be paid off in 30 days.
Transfers are costly.
The average cost of conveyancing is around £400, but fees may range from approximately £400 to £1,500, depending on the property's price and location.
If you're buying and selling at the same time, your conveyancing costs will be greater because your conveyancer must complete work for both transactions.
The fee will also vary depending on how complicated the property transaction is. If the property is a leasehold, for example, there may be additional legal work to do, such as examining the lease.
Some solicitors charge a flat fee, while others demand a proportion of the property's value. Always check to see what is covered by the fee and if it is fixed; some firms will charge extra if any unforeseen difficulties arise. Before deciding who to use, get several quotations.
The cost of conducting a search at the Land Registry, for example, may differ. The Land Registry charges on a sliding scale based on the value of your property.
What is the role of a property solicitor or conveyancer?
The situation is different for every property purchase, and what your conveyancer or solicitor needs to do will vary depending on the type of home you're buying.
In general, the sale will be handled by your solicitor, who will handle everything from submitting paperwork to the Land Registry to collecting money and providing legal counsel.
They'll also go through your contracts and deal with the seller's solicitor. When it comes to completion day, they'll ensure that the cash is transferred and that you acquire full ownership.
However, there are several additional responsibilities that they must complete throughout the conveyancing process:
Before you sign any contracts, your solicitor or conveyancer will perform a series of inspections on your property.
They may discover faults that could affect how much the property is worth or whether you should go through with the sale, so it's critical to conduct these tasks before the transaction is legal.
Some of the queries will most likely include:
- To learn more about elements like environmental concerns, proximity to railway tracks, and development plans that may influence the home, conduct a local authority search.
- To discover the title register and legal ownership, use a land registry search.
- Check whether the property is connected to mains drainage and water supply by conducting a drainage search.
- Contact your local council office to learn about flooding risks, ground stability, and landfill sites in the area.
- If your home is near a church, your solicitor will look for if you'll be responsible for paying for the repairs.
- Based on factors in your region, such as tin mining in Cornwall, you can produce additional searches.
Questionnaires from sellers
The seller of the property will be asked to complete a series of forms and questionnaires regarding their house, including:
- TA6 – This form includes a wide range of topics, such as boundaries, parking, insurance, and whether or not there are any existing planning notices that might impact the property.
- TA10 – The seller may also opt to remove any fixtures or fittings he or she intends to include in the property sale.
- TA13 – This article goes into further detail about the closing of the transaction, including some of the more sophisticated elements.
- TA7 (Only for leasehold and share-of-freehold houses.) Lease records contain important information about the lease.
- A certificate that attests to the utility of a building's energy efficiency.
Your conveyancer will go through this information for any potential issues that may impact your offer, but you should read it carefully as well.
If there are any issues about anything the searches or seller forms suggest, your conveyancer will contact the seller's solicitor and, if required, negotiate on your behalf. They'll also answer any questions the seller might have.
The seller of a leased property should have provided thorough information on the lease. Ground rent and service charges should be noted in your conveyancer's contract.
When you're working with a conveyancer, he or she should walk you through the main findings of their work and discuss any potential concerns. They should confirm that you completely comprehend everything and agree to proceed before exchange.
Help to Buy fundings
When you buy a home with a Help to Buy Isa or equity loan, your conveyancer will assist you in claiming the funds.
If you have a Help to Buy Isa, notify the provider before purchasing a property. They'll create a closing statement for you, which your conveyancer may use to collect the government bonus after the exchange. Your solicitor cannot charge more than £60 to complete your bonus application.
If you're using an equity loan to purchase a home, your conveyancer should educate you about the legal ramifications and go through the paperwork with you. Your conveyancer will then obtain permission from the local Help to Buy initiative in exchange for signing the Help to Buy agreement, allowing you to sign the contract.
When your purchase is completed, the money will be transferred to the house builder. To reflect their contribution to your property, your conveyancer will also register a "second charge" on your property in favor of the government.
What are your immediate next steps?
After you've completed the paperwork, your lender will evaluate a mortgage offer, in writing, for you. Your conveyancer will do this for you.
A mortgage valuation is a procedure through which your lender will want you to have one. Keep in mind that this is not the same as a house survey, which you should also perform. The valuation serves the lender's interest, whereas a house survey is performed to look for any faults or structural deficits.
You'll also need to have buildings insurance in place from the time of exchange, as the property becomes your responsibility at that moment. Because most mortgage lenders will demand this as a precondition for funding, it's something you should do straight away.
Apart from that, there may be times when it appears as if nothing is happening. During this period, your conveyancer will most likely be conducting searches and taking inquiries - simply make sure you stay in touch with them to ensure everything goes accordingly.
It's also critical to notify your solicitor and the estate agent of any planned vacations or if you're likely to be unavailable for other reasons.
How to Choose a Conveyancer or Solicitor
Choosing a solicitor or conveyancer is not the most exciting part of buying a property, but it is an essential one.
You don't have to use their in-house service or any companies they suggest, regardless of what your estate agent tells you. Some mortgage lenders, on the other hand, will charge an additional fee if you work with a conveyancer who isn't on their list.
To find the greatest firm, follow these guidelines:
- If you opt for a ‘no-sale, no-fee' firm, they will be enticed to complete the task as quickly as possible, and you won't have to pay any legal costs if the sale fails.
- It's also worth looking for a ‘fixed-fee' service, which means you only pay the amount that is specified when you join up. This avoids any unpleasant shocks later on.
- Remember to think beyond the bottom line. When it comes down to it, price is just one element to consider when making a selection. The business you choose will be responsible for all of the legal work surrounding your property acquisition, and if they miss anything or make a mistake, it might end up costing you far more than the difference between the cheapest service
- If you must use a conveyancer, choose one who is not overly preoccupied. You want someone who will give your case the attention it deserves. If feasible, inform them of your preferred exchange and completion dates and see if they can accommodate them.
Do you need a solicitor or a conveyancer?
Although all attorneys are competent in conveyancing, not all of them have prior expertise in the subject, so if you choose to work with a solicitor, ensure that they have relevant knowledge and expertise.
Conveyancers, on the other hand, can usually handle property transactions from beginning to end, but they cannot carry out other legal services.
Hiring a fully qualified solicitor may be required for tough transactions, such as if there are boundary issues. Solicitors, on the other hand, are generally more expensive than conveyancers and have additional responsibilities.