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Guides to Conveyancing: Buying a Property (page 3)

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7. Signing the Contract and other documentation

You will be asked to sign the contract, the mortgage deed and the stamp duty land transaction return. Once this paperwork has been completed and your deposit has been received (see below), we can exchange contracts with the seller's solicitor, making the purchase legally binding. Once contracts are exchanged, we can begin preparing the final account and contact your lender to request the mortgage advance.

 

8. The Deposit

A deposit payment is payable at the exchange of contracts, even if you are borrowing most or even 100% of the payment from a mortgage lender. The procedure varies depending on whether you are only buying or buying and selling at the same time.

 

Buying only
If you are only buying, you should consider this at an early stage as your mortgage funds will not be released by your lender until completion. Usually, you would be expected to pay a deposit of !0% of the purchase price, although this is sometimes reduced if you have a 95% or 100% mortgage.

 

Buying and Selling at the same time
Effectively, you will not be asked to pay an extra deposit at exchange of contracts, as we would generally pass the sale deposit on to your seller's solicitors, even if this is not equal to 10% of the purchase price. You would only need to pay the whole 10% in the event that you withdraw from the deal and were therefore in breach of contract as this would be compensation for the seller.

 

9. Buildings Insurance

You should arrange buildings insurance from the time of exchange of contracts, as sellers are within their rights to cancel their insurance policy on the property from this point. You may have arranged for buildings insurance to be provided by your mortgage lender - if so, your lender will take care of this for you. If you are buying brand new home, the builder will insure the property until the time of completion, so you need not start an insurance policy before the completion date.

 

10. Completion

The completion date is the date that you can pick up the keys to your new home and move in. Whilst you will probably be anxious to move toward this date, it is important that to avoid disappointment you do not make any commitments, such as booking a removal service, until the completion date has been fixed. We will advise you as soon as we are at a stage where the completion date can be arranged.

 

On the completion date, we will transfer the balance of the purchase price and the seller's solicitor will forward the title deeds in return.

 

Stamp duty is then paid, if applicable. Then, we will arrange to register the transfer of title with the Land Registry and, once the title is registered, arrange for the original document to be sent to your mortgage lender. This is the end of the conveyancing process.

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