Top Tips For First Time Buyers: The Legal Process Explained
Buying your first home is an exciting milestone, but it can also be a complex process with various legal requirements.
Our lawyers at Bennett Griffin will guide you through the journey.
In this blog, we will share our knowledge (without all of the legal jargon) to help you navigate the process smoothly, from instructing us to completing the purchase.
Let’s dive in!
The Conveyancing Process Explained For First-Time Buyers
Conveyancing is the legal process of transferring property ownership.
So, in your case, as first-time buyers, we will transfer the property from the seller’s name into your name.
When you find a property you want to buy, your estate agent will provide the details of the seller’s lawyer, initiating the legal process.
Draft Contract Pack
The seller’s lawyer will send us a pack of documentation, which will include:
- Draft Contract – this will be the initial draft version of the sale agreement between you and the seller including the purchase price; seller name & address and your name & address. A more detailed explanation will be given within our report (see later on).
- Title deeds – these are the official property documents showing the legal ownership of the property, any restrictions on use of and rights of way over the property.
- Property Information Form – this is a form completed by the seller answering set questions about the property, i.e. when the boiler was installed, what works that have been done etc.
- Fittings & Contents Form—The seller completes this form to confirm what items in the property will be left or taken.
- Energy Performance Certificate (EPC) – this is a certificate detailing the energy efficiency of the property.
- Other documentation that the seller might provide includes planning permissions, building regulations approval, and installation certificates for windows, boiler or electrical works.
Searches
We will ask our search provider to carry out searches on the property.
The standard searches are:
- Local Authority Search – this will show past and current planning or building applications affecting the property; public rights of way; whether the road is publicly or privately owned.
- Water & Drainage Search – this shows details about surface water and sewerage drains; the location of any water meter, and a map of the drains.
- Environmental Search – this will show the likeliness of flooding, including flooding history; subsidence issues (if any) and; renewable energy projects nearby. It also shows planning applications local to the property.
Based on the results of these searches, we may recommend that further searches be carried out (such as Coal Mining or Planning searches), but we will discuss this with you at the time.
You may wish to obtain a Homebuyers Survey on the house at this stage to check the condition of the property. This will highlight things that the searches and contract pack documents won’t, such as: repair issues and the building’s condition including walls, ceilings, roof, windows and doors.
Additional Enquiries
As your lawyers, we will thoroughly review all of this documentation (the contract pack and the searches results) to make sure there are no legal issues with the property that may impact your decision to continue purchasing this particular property.
Some things we will be looking out for are:
- that building works have the necessary permissions;
- making sure there are sufficient rights of access to the property.
Additional enquiries are questions that we will ask the seller’s lawyer about the property.
Common enquiries are:
- asking that the seller has complied with any restrictions on the use of the property;
- asking for compliance certificates for any work done to the property (e.g. replacing windows, extensions etc.)
Reports
It’s important for us to explain as much about the property as we can so that you know what you are investing your money in and we do this by putting together a detailed and comprehensive report.
Here at Bennett Griffin, to keep things simple, we try to split up our reports and send them out at various stages so that you’re not overwhelmed with everything in one go.
Search Report: once we received the results of your searches, we will review them and provide you with a report to explain them and point out the bits that affect the property and may be on interest to you.
Title Report: we will report on the title deeds (referred to above) to you, detailing the different sections and explaining what they mean. This will also advise of any rights over the property and any restrictions on its use.
Mortgage Report: your mortgage lender will send us a copy of your mortgage offer. Although we don’t advise on the offer (as your mortgage broker will do this), we will draw out the main points and point you to any key obligations you have in respect of the mortgage.
Property Report: this will cover anything not previously reported on, and is often the ‘final’ report. We will only send this to you once we’ve raised all our enquiries and received satisfactory replies from the seller’s lawyer. With this, we will send you any documentation that we need you to sign. We will usually ask you to send us the 10% deposit at this stage, in readiness for exchanging contracts (see below).
It’s important that you read all of your reports fully before signing any documents.
If you do have any questions for us after reading the reports, please ask us – that’s what we’re here for. We’d much rather you ask about anything you don’t understand.
Exchange of Contracts
When you’ve read your reports and are happy to proceed, you’ll need to sign the documents sent with them. We will usually ask you for your deposit at this stage, too.
Even though we’re ready, we need to wait for everyone else to be. For example, if your sellers are also buying onwards (known as a chain), their purchase may not be ready at the same time as us, so be prepared for any delays at this point.
When the chain is ready, and everyone has found a completion date that suits them, we move on to exchanging contracts.
This is the day that we will legally fix the completion (moving) date.
Once contracts are exchanged, you can’t withdraw from the purchase without legal implications. Because of this, we make sure to obtain your authority on the day.
There is usually at least one week between the exchange of contracts and the date that you complete (move) to allow us to request the funds from your mortgage lender and to prepare everything on our end.
From the date that contracts are exchanged, we will ask you to put building insurance in place for the house.
Completion
On the completion day, we will send the purchase price to the seller’s lawyer on your behalf. Once the seller’s lawyer confirms receipt of the purchase price, they will ask the estate agents to release the keys for you to collect.
The completion day is the day that the property legally becomes yours and you can officially move in!
Post-Completion
After the completion day, we will deal with several post-completion steps.
Let’s break them down:
Stamp Duty Land Tax (SDLT)
On the completion day, we will make the payment to HMRC for your SDLT and submit the SDLT return.
We will have previously discussed and confirmed with you the amount payable prior to exchange of contracts.
Land Registry Formalities and Official Copies
Following completion, we will send the application to HM Land Registry to register your ownership of the property. HM Land Registry typically take at least a few months to process and complete these applications, so don’t be too worried if you don’t receive this straight away.
Once the registration process is complete, the Land Registry will issue a final deed, also known as the “official copy” or “title deed,” to your conveyancer. We will forward this deed to you, ensuring you receive the official copies showing your name as the registered owner.
Once your property is registered with Land Registry, it’s a good idea to keep this safe, for your records, although you don’t need the deeds to confirm your ownership. If you ever lose them, you can also obtain further electronic copies via Land Registry.
Summary
As a first-time buyer, understanding the conveyancing process and following these top tips will make your home-buying journey smoother and less stressful.
Saving for a deposit, finding a suitable mortgage, and working closely with a trusted conveyancer are key elements for success.
At Bennett Griffin, our experienced lawyers are dedicated to providing expert advice and guidance at every step.
With thorough planning and the support of professionals, you’ll soon be unlocking the door to your dream home.
Remember, the conveyancing process typically takes 12-16 weeks, but as there are many third parties involved, do be prepared that this can vary.
FAQs: Our Property Lawyers Answer The Most Frequently Asked Questions From First Time Buyers
What’s the difference between leasehold and freehold property?
A Freehold property means you own both the building and the land it’s on (usually a house purchase).
A Leasehold property means you have a long lease (usually 125 years) from the Freeholder or Landlord for a period of time for the property only (most common when purchasing a flat).
What is a “conveyancer”?
A conveyancer is a broad term for someone (whether a Solicitor, Licenced Conveyancer or Legal Executive) who deals with the legal process of transferring a property.
What does a conveyancer do for property purchases?
A conveyancer is the person who actually deals with the transfer of the Property of the seller to the buyer.
A conveyancer will arrange the searches, review the contract papers and property deeds, arrange exchange and completion with the seller, deal with the transfer of funds and register the purchase with the land registry.
What is Stamp Duty Land Tax (SDLT)?
SDLT is a government tax on all property/land purchases. The rate varies depending on the price of the property or land you are purchasing. First-time buyers have a reduced rate. Visit the government’s website for the latest information and rates on SDLT.
I’m buying with a partner. What’s the difference between Joint Tenants and Tenants in Common?
Owning a property as joint tenants means that you will both own the whole property jointly. In legal terms, you are viewed as a single entity, and if you decide to sell the property, both of you must agree. As joint tenants, the property is also automatically left to the other owners should the worst happen and you pass away.
Owning a property as tenants in common means each party owns a separate share of the property, which can be any variation from 50/50 to 99/1. Your share in the property will not automatically pass to the survivor if one of you should pass, but will pass in accordance with your Will (or under intestacy rules if you have not made a Will).
What money will I need before I buy a property?
It is recommended that you have deposit of 10% or more of the purchase price ready to buy a property, however, usually at least 5% is sufficient.
How do I find a mortgage?
More often than not, as a first-time buyer, you will need to take out a mortgage from a bank or building society. You can do this yourself by applying directly to a mortgage lender, or you can use a mortgage broker who can find a variety of offers as well as give you advice about the current market. We will be happy to recommend a mortgage broker if you need assistance.
How much do you charge for conveyancing?
Buying a property involves not only the purchase price of the property but also our fees for dealing with the legal work for you. You can contact us via email or by phone – our Property Team will be able to provide you with a conveyancing estimate. For a quick idea of our costs, you can visit our conveyancing fees page for our fee brackets.