The Legal Process When Buying a Home
Buying a home is an exciting process, especially if you are a first-time buyer. However, the legal process can be complicated and may seem to take forever. So if your fingers are itching to get hold of your new house keys, this guide will answer all the questions you have about the legal process of buying a home.
What happens after my offer on a house has been accepted?
Once you have had an offer on a house accepted by the seller, the seller’s solicitor draws up a sale and purchase contract. This will stipulate the price the property will be sold for, any fixtures or fittings that will remain with the property and the date the contract will be complete, (known as the completion date).
Your solicitor will then check over the contract and the property itself by examining the title, building reports and survey, and local council and other relevant authorities’ reports. This process is known as preforming due diligence.
Once this process is complete and you and the seller will sign and exchange the contracts.
How long does it take to exchange contracts?
It can take anywhere from a few weeks to many months to move from having an offer accepted to exchanging contracts, depending on how many people are in the sale and purchase ‘chain’.
During this period both the buyer and seller can walk away from the deal with no legal consequences.
Can someone else purchase the property I have made an offer on while I am waiting for exchange to take place?
Unfortunately, yes. Up until the contracts are exchanged, the sale and purchase of the property is not legally binding on either party. Therefore, a seller is within his or her rights to accept an offer on their property that is higher than the one you made. This is known as being ‘gazumped’.
Gazumping is legal in England and Wales but not in Scotland.
The way to avoid being gazumped is to enter into a separate contract with the seller where he or she agrees not to accept any other offers on the property during a set period. If they do subsequently accept a higher offer, then you can sue them for breach of contract.
What happens when the contracts are ‘exchanged’?
Once the contracts have been exchanged then the agreement becomes legally binding. If either party decides not to go through with the deal, they will have to pay the other compensation.
You will usually be required to pay a deposit of around 10% of the purchase price at this point.
How long is the period between exchange and completion?
The period between exchange and completion is usually between seven and twenty-eight days. Exchange and completion can happen on the same day; however, this can be very stressful and relies on the funds been transferred very quickly.
What happens on completion day?
On the day of completion, your solicitor will transfer the purchase price of the property to the seller. They will also pay any outstanding stamp duty on the property and take their fee.
Once all the monies have been transferred, you will be able to pick up your keys and move in.
By using an experienced conveyancing solicitor, you will avoid any delays and/or disasters when purchasing your home. With so much financially and emotionally at stake, it is worth investing in sound, solid legal advice, so you can move into your new property with confidence and peace of mind.
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