Conveyancing is an essential part of the house buying process and, as such, it makes sense for brokers to try to link up with industry partners who can provide their clients with this service.
Brokers may often find themselves in the hot seat when their clients start to ask questions about the conveyancing process. The following guide on the role of the solicitor should act as a handy reference tool.
Start at the very beginning
The first point buyers must understand is that there are many different types of solicitor, so it is important to choose one that is a specialist in conveyancing. Most solicitors do offer conveyancing services but buyers should preferably choose a specialist with a modern approach and sufficient resources for good case management and staffing. Direct conveyancers, who work mainly with brokers, carry out residential conveyancing in volume, do not require the client to visit them and are the most likely to be open seven days a week.
Buyers would generally need to appoint a solicitor at the point where they have received their mortgage offer; once appointed, their solicitor should also receive a copy. The lender will require the solicitor to check certain things and ensure that any conditions they require have been satisfied. For those arranging life or building cover, this is the time to make sure it is set up for when it is required to go ‘live’ and that any other of the lender’s requirements are satisfied.
In a nutshell
In order for a house purchase to proceed, the buyer’s solicitors need to:
- receive a contract from the seller’s solicitors;
- see the mortgage offer;
- conduct various searches.
- The seller’s solicitors then prepare and send the contract, which sets out the terms of the agreement, including:
- the price;
- the names of the parties;
- what happens if something goes wrong.
Searches
One of the key roles of the solicitor is local authority searches. A document is sent to the local council that covers the area where the property is located. Questions include whether the roads are adopted (i.e. maintained) by the council and whether there have been any planning applications or decisions on the property. Although solicitors call it a ‘local search’, it is not a search of the locality and will therefore not show any matters or planning applications or decisions outside the boundaries of the property.
If the buyer knows of something likely to happen in the vicinity affecting this, then they should let their solicitors know as soon as possible, and certainly before exchange of contracts, so that they can advise on how to address any issues affecting the purchase of the property. There may also be additional searches that the solicitors need to carry out on the property depending on where it is, the most common of which is a mining search. If the buyer is purchasing a property in an area where high levels of radon gas are present or where there may be environmental issues, then a radon gas report would be obtained as part of an environmental report.
Exchange of contracts
When the solicitors have all the information that they require, they report to the buyer on the contract and other matters either in person or by post. This is the time that the buyer should ask the solicitor about anything they are unsure about as, after this point, it is much more difficult to rectify problems.
The solicitor will point out at this stage that one of the most important things to consider is the completion date (the date when the buyer hopes to move in). Very often buyers will have discussed a suitable date to move with the sellers. The solicitor will usually advise to leave at least seven to 10 days between exchange and completion to ensure certainty of when the move will take place and to avoid any last-minute hitches in the process.
Although it is technically possible to have a simultaneous exchange and completion it is not good for anyone’s stress levels (including the solicitor’s) not to know until the last morning if the buyer is moving or not. The completion date cannot be agreed until the buyer’s solicitor has all the documents needed.
Completion date
On the completion date, the buyer’s solicitor will arrange to send the purchase money to the seller’s solicitors and, when this has been received by them, the keys will be released and the clients can move in. As this money is sent through the banking system, it quite often does not arrive until late morning or early afternoon. The clients therefore should not arrive at the new house at 9am on the day of completion, as they will probably not be allowed in.
Selling
If acting for the seller, the solicitor will firstly need to prepare a seller’s pack – as from June 2007, Home Information Packs (HIPs) will be introduced – obtain the deeds and prepare the contract to send to the buyer’s solicitors. They will also send the seller forms to complete and send back.
Once they have the deeds and forms, they will issue the contract and answer any questions that the buyer’s solicitors raise. They will also send the seller their part of the contract to sign.
When the completion date has been agreed, the solicitor will request a redemption figure from the present lender (if they already have a mortgage) and will send the seller a reconciliation statement, showing the amount required to pay off the existing mortgage.
The seller will also need to sign a transfer of their property, which is prepared by the buyer’s solicitors. As soon as the buyer’s solicitors say they are ready to exchange, a completion date should be agreed and exchange can then take place.
Remortgaging
In remortgage cases, the new lender treats the application for a mortgage in exactly the same way as if the buyer were purchasing the property for the first time, i.e. they will issue the instructions to the solicitors when they make a mortgage offer.
The solicitor then investigates the ownership of the property, meaning there is almost as much legal work involved as when they purchased the house initially. As well as investigating the title of the property, ensuring that the client is registered as the owner, the solicitor asks the lender to provide a redemption figure and will also undertake certain searches, including a bankruptcy search, on the client.
When the solicitors have received the deeds from the present lender and the offer from the new lender (together with full details of the insurance policies if it is an insurance-backed mortgage), they will apply for the monies to be issued in time for the completion date.
When the monies are received from the lender and all outstanding costs have been paid off, a completion statement is sent to the client, setting out in detail what has been paid on the client’s behalf. The solicitor will then apply to register the new mortgage with the Land Registry.
Although the paper trail can be lengthy, if it is a straightforward case the remortgage process can take as little as 10 working days.
Beyond the norm
It’s clear that the conveyancing process does involve a number of parties and a number of often complicated requirements and processes. The expertise of the solicitor really comes to the fore when there are problems but the majority of transactions proceed smoothly. Brokers can make their own jobs easier in this area by building long-term relationships with reputable conveyancing firms upon whom they can rely for high quality service.
Eddie Goldsmith is senior partner at Goldsmith Williams
