First time buyer’s guide: what do law firms do?

This is a guide explaining what role law firms perform when buying property – known as the conveyancing process. Understanding what it involves will help ensure there are fewer surprises along the way.

What is conveyancing, and who does it?

Conveyancing involves legally transferring home ownership from the seller to the buyer. It starts when your offer on a house is accepted and finishes when you receive the keys. Though it is possible to perform conveyancing yourself (albeit difficult), it’s highly advisible to find the right solicitor or conveyancer and “instruct them” to do it for you.

Do a little bit of research before using the estate agent’s recommended conveyancer as it could be a commission based recommendation and cost you more. As with everything, shop around for the best deal, and look for reviews.

Once you’ve chosen your appointed conveyancer, they will then draw up a draft contract or terms of engagement with you, setting out their charges and deposits required. Your solicitor will write to your seller’s solicitor to confirm they are instructed and request a copy of the draft contract and any other details, such as the property’s title and the standard forms.

Legal Work

Your solicitor will examine the draft contract and supporting documents and raise enquiries with the seller’s solicitor. You will be expected to go through the forms the seller has completed and let the solicitor know if you have any queries or concerns.

Property searches – there are things you may not know about the property just from viewing it with estate agents or even getting a survey. The conveyancer will do a set of legal searches to ensure there are no other factors you should be aware of.

Local authority searches – are there plans for a motorway in your new garden? How about radioactive gas? This costs between £70 and £400 depending on the Local Authority and usually takes 1-2 weeks, but can take up to 6 weeks

Checking the ‘title register’ and ‘title plan’ at the Land Registry – these are the legal documents proving the seller’s ownership. The title register check costs £3 and the title plan check costs £3. Both checks are legally required in order to sell

Checking flood risk – this can also done at the Land Registry. If you are already getting an environmental search (see below), you might not buy this one separately as the search will contain much more thorough flood information and maps

Water authority searches – find out how you get your water and if any public drains on the property might affect extensions or building works. The water authority search will cost between £50 and £75

Chancel repair search – to ensure there are no potential leftover medieval liabilities on the property to help pay for church repairs. This is a necessity and costs £18. However, you may decide to take out Chancel repair insurance instead for £20 or so. The laws around Chancel repair changed in October 2013 so now the onus is on the Church to establish and lodge liability with the Land Registry

Environmental Search – this report is used on the vast majority of transactions and is provided by either Landmark or Groundsure.  Depending which product your solicitor usually uses, the report will give information about contaminated land at or around the property, landfill sites, former and current industry, detailed flooding predictions, radon gas hazard, ground stability issues, and some other related information.  The cost should be around £50 to £60 including VAT.

Signing Contracts

Since receiving the draft contract from the seller’s solicitor, your solicitor will have been in correspondence with you about what is covered. Before signing the contract, your solicitor will need to ensure:

• That all enquiries have been returned and are satisfactory
• That fixtures and fittings included in the purchase are what you expected
• A completion date has been agreed between the two parties, which is usually 1-4 weeks after exchange of contracts, though this can vary widely
• That you have made arrangements to transfer the deposit into your solicitors account so that it is cleared in time for an exchange.

You can negotiate on the size of the deposit, which is normally 10% of the value of the property. However even if you agree to pay less than 10% you are still liable for 10% of the value of the property if you later pull out of the agreement. This means if you pay a 5% deposit and pull out of buying the property you will not only lose your deposit but also legally owe an additional 5% of the value of the property.

Exchanging contracts

You and the seller will agree on a date and time to exchange contracts at any time on any given day

Your solicitor will exchange contracts for you. This is usually done by both solicitors/conveyancers reading out the contracts over the phone (which is recorded) to make sure the contracts are identical, and then immediately sending them to one another in the post.

If you are in a chain your solicitor/conveyancer will do the same thing but will only release it if the other people in the chain are all happy to go ahead. This means if one person pulls out or delays, then everyone in the chain gets held up.

Once you have exchanged contracts you will be in a legally binding contract to buy the property with a fixed date for moving. This means that:

• If you do not complete the purchase, you will lose your deposit and owe the seller more if the deposit was less than 10%.
• the seller must sell, or you can sue them.
• the seller can no longer accept another offer.

Between exchange and completion

Your solicitor will lodge an interest in the property which will mean that the deeds to the property are frozen for 30 working days to allow you to pay the seller and lodge your application to the Land Registry to transfer the deeds into your name.

The solicitor will send you a statement showing the final figure to pay, which will need to be cleared into your solicitor’s bank account at least one day before completion.

On completion day

Completion is normally set around midday on the specified date although in practice takes place when the seller’s solicitor confirms that they have received all the money that is due. Once this happens the seller should drop the keys at the estate agents for your collection. You can then move in.

After completion

Your solicitor will tie up some loose ends:

• Pay Stamp Duty Land Tax on your behalf.
• You will receive your legal documents about 20 days after completion after your solicitor has sent them to the Land Registry.
• Send a copy of the title deeds to your mortgage lender, who will hold them until you pay your loan off.
• Notify the freeholder if the property is leasehold.
• Give you a bill for their payment.

Finally, you will want to collect together all your paperwork from the purchase of your new home, including the estate agent’s brochure, to file and keep safe for when you move again.