Now the waiting game is coming to an end very soon and there are only 2 more steps until you can finally call it your house! Before exchange of contracts can take place your lender will require you to get Buildings Insurance for your new home. You are responsible for the property as soon as contracts have been exchanged so it is in your interests to do so. If you get a combined Buildings and Contents Insurance it will always work out a little bit cheaper then both of those separately.
Then its onto Signing the contract! Since receiving the draft contract from the sellers solicitor, your solicitor will have 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. The deposit is normally 10% of the value of the property.
And lastly, 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 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!
The seller has to sell or you can sue them.
The seller can no longer accept another offer (you no longer need to worry about being gazumped) 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 solicitors bank account at least one day before completion.
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.
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.
And then its all about the big move! All those boxes stacked up in every room of your current residence are finally getting moved and you don’t have to live out of boxes anymore! My next and last post in my ‘Buying a House’ Series will feature my Top Tips for Moving.