Moving home is listed as one of the most stressful things a person will do in their lifetime, but why is this? A lot of the time it is because of being let down by a Buyer or Seller, or timescales being delayed and target moving dates missed, however it can also be due to the whole process seeming complicated and difficult to understand.
I always say to my clients that there is no such thing as a stupid question when it comes to Conveyancing, as after all some of us may only move once or twice in our lifetimes, and so why would this make us experts in such matters?!
Every day when speaking with my clients, I am asked a variety of questions that come up time and time again, and so I wanted to share some of these common queries with you in order to try and explain the Conveyancing process in more detail, and break down some of the areas that often cause the most confusion.
Each week I will be sharing with you examples of some of the questions that have been raised by my clients* during the course of their property transactions, and the advice and explanations given to them to help them understand the process of moving home.
(*names will be not be shown in full for confidentiality reasons.)
“What is the difference between exchange and completion.” A – Coventry
“There are two main stages when buying or selling a property in a Residential Conveyancing transaction.
After the purchase price has been agreed between the Seller and Buyer and the Buyer’s Solicitor is satisfied with their searches and enquiries against the property, the first significant stage that will be reached is the Exchange of Contracts. It is at this point that all parties in the chain will have agreed on the moving date, and the Buyer will have a paid a deposit of up to 10% of the purchase price. Each Solicitor will hold a copy of the Contract that has been signed by their client, and they will then date the Contracts and exchange them with one another, hence where the term comes from. It is at this stage when the transaction becomes legally binding on both Seller and Buyer – the moving date is set, and the purchase price is fixed, and should either party decide not to proceed after the exchange of contracts has taken place, they will be in breach of contract and in the case of a Buyer being in breach, would result in them losing their 10% deposit. The party who is in breach could also then be sued for breach of contract by the other party.
The next significant stage in the process is the moving date itself which is what is known as “the Completion Date.” It is on this date that the rest of the money transfer will take place between the Solicitors, and the keys will be released by the Seller’s Solicitors upon receipt of the Buyer’s funds, and the Buyer can then move into their new home.”
“I’m having a mortgage valuation and so surely the Valuer will be checking that the property is all ok and I won’t need my own survey, will I?” N. – Warwick
“A Valuation Report is carried out on behalf of a mortgage lender when they are assessing whether a property is suitable for them to lend the mortgage against. This type of survey is usually very basic and often consists of just one or two pages of confirmed information about the property, such as the type of property, number of bedrooms, and insurance rebuild figure. It is designed to be purely an assessment of value and condition from a lending perspective.
A Home Buyer’s survey is the most common middle of the road type of survey and is designed for properties that are generally no more than 150 years old, which are of conventional construction and in reasonable condition. The report focuses on significant and urgent matters, such as:
Property’s general condition
The value of the property on the open market
Comments on matters such as whether there has been treatments such as damp proofing, insulation, timber treatment etc. carried out previously at the property
Testing of walls for signs dampness
Highlighting any apparent defects in the property, which may affect value
Urgent matters that need assessing prior to the exchange of contracts.
If a property is an older or more unusual property (e.g. a listed building for example) then an even more in-depth full building survey may be recommended by your surveyor.
As a mortgage valuation report is carried out purely on behalf of a Mortgage Lender, it cannot be relied upon by a Purchaser. Therefore, if you proceed with a purchase on the basis of having had a Valuation Report only, and a defect in the property is later discovered after you have exchanged or completed your purchase, you will have no recourse against the Seller and/or the Mortgage Valuer.
If however, you have had your own personal survey carried out against the property, should defect(s) be discovered then it will enable you to obtain quotations for the cost of any repairs, and will give you the opportunity to re-negotiate the purchase price should you wish to do so. It is therefore, important that you have the result of the survey before you instruct the exchange of contracts to take place, as this is the point at which you are legally committed to continue with your purchase.
Should any issues have been missed from the survey, you would have recourse to potentially take action against your surveyor.”
This concludes the FAQ for this week. Visit next week for more answers to your questions. If there are any conveyancing issues you’d like Band Hatton Button’s assistance with please get in touch.
We’ve also recently added a new section to the Residential Property section of our site, about the different types of survey you can choose to have carried out. Please click here to find out more.