This is the most common question of all and one that is almost impossible to answer. Many years of experience has told us that you can never predict what is likely to happen. There are many things our outside our control – too many to list – that the most helpful tip that we can offer is to wait and see how things pan out. You should avoid the natural temptation to set a completion date and arrange removals before you know that everyone in the chain is ready to exchange.
On the completion day we will send you a cheque, or if you prefer we can credit your bank account direct, though this may involve a small bank charge. The money you receive is the sale proceeds, less any outstanding mortgages, and less selling costs.
You need to pay us the deposit before exchange of contracts. The deposit is 10% of the purchase price. If you are borrowing money from a mortgage lender we will arrange to draw down the advance prior to completion. Any remaining balance due from you must be paid prior to completion. We prefer to receive funds electronically by bank transfer as cheques and bank drafts must be cleared and this process can take up to 7 working days.
If someone other than a mortgage lender is contributing to the purchase price (i.e. you are receiving a gift from a family member), you must inform us about this at the outset of your transaction (by completing the details in the Questionnaire enclosed with our initial letter to you). If you are buying with a mortgage, you must also check with your bank/lender to make sure they are aware of the gift/loan because this may affect the terms of your mortgage offer. If you do not inform your lender, you could be committing mortgage fraud which is a criminal offence.
Whilst it may not be your intention for the person making a gift/loan to be a legal owner of the property with you on completion, there are legal principles which mean that they could still have an interest in the property. In such circumstances, we may need to write to the person making the gift or loan before exchange of contracts to obtain their identity documents and make sure they sign an authority to confirm that they are making a true gift and are prepared to waive any interest in the property. If we are not informed about a gift or loan until funds are transmitted to us shortly before exchange of contracts, this is likely to delay exchange and completion.
The fastest and most secure method of transferring funds is by bank transfer. We send you our bank details to you by post at the start of the transaction. In your welcome pack there is various information to return to us by post including your bank details.
IMPORTANT NOTICE: There is an ever present Risk of fraud by third parties.
Sending funds to us: You cannot rely on bank details sent to you by email, even if they appear to come from this firm. Please check with us that you are using the correct bank details for any payments to be made to us and never rely on an email. Requesting that we send funds to you: We cannot rely on bank details sent to us by email, even if they appear to come from you. Please do not send your bank details by email.
We will not change our bank details during the course of this matter. If, during the course of this matter, you receive an email or phone call purporting to be from us informing you that our bank details have changed , IT is likely to WILL BE AN ATTEMPTED. If this happens, please report it immediately to our cashiers team on 01482 300200 who will verify our bank details and, if necessary, report the matter to the police.
Some banks limit the amount their customers are permitted to transfer via internet banking in one day. You should consider checking this with them before funds are required.
(Please note that in view of the high standards imposed on our profession by the regulations designed to prevent money laundering, we must insist that all clients make electronic payments or by payments by cheque from a bank account in their name(s).)
If you have arranged your finances so that there will be a surplus left over on completion of the sale and purchase, then we will account to you for the balance on completion.
If you intend to put some extra money into the new property, then we will need the balance from you prior to completion.
When contracts have been exchanged there is a legally binding agreement to complete the sale and purchase on the agreed date. There has to be a penalty that would discourage either of the parties from defaulting and the penalty is a financial one involving the payment of interest. So, for example, a buyer who fails to hand over the money on time to complete his purchase will have to pay interest at the rate mentioned in the contract – usually 4% over base rate on the unpaid price.
A restrictive covenant is a condition imposed on the use of land. Examples could be that the land should not be used for business purposes; or that buildings cannot be erected or altered without the consent of the former land owner.
This is a phrase that is often heard during the course of a conveyancing transaction. Put simply it is insurance that will pay out if the event that you are covering yourself against should happen. Popular policies cover such things as:
- breach of restrictive covenant
- absence of evidence of a formal right of way
- lack of planning permission
- lack of Building Regulations Approval.
Title deeds were effectively abolished by the Land Registration Act 2002 in respect of registered land. Evidence of your ownership of land is contained on the Land Registry’s computer and an office copy of that entry is sufficient to establish your ownership of the land. About 90% of residential property has been registered at the Land Registry, but for those properties that have not been registered yet – known, unsurprisingly as unregistered property – title deeds are still important for it is the deeds that prove your ownership of your land. If you have a mortgage, your mortgage lender will hold these deeds. If you do not have a mortgage you may hold the deeds personally, or they may be held in safekeeping with your bank or solicitor. We need the deeds to enable us to prepare the contract for the sale of unregistered land.
It is often tempting for a buyer to try to save Stamp Duty Land Tax by paying for fixtures and fittings separately as money paid for these items does not attract Stamp Duty Land Tax. This is rarely legal and can carry severe penalties including imprisonment for tax evasion. For this reason, we insist that clients provide us with an independent valuation of the fixtures and fittings carried out by a reputable valuer and in the absence of this we cannot agree to this type of deal and the full amount of Stamp Duty Land Tax will have to be paid.
Anyone in the chain can pull out before contracts have been exchanged without even having to give a reason. Usually however people will pull out because they have had a bad survey result or there has been a change in their financial circumstances. If this happens no compensation is payable to anyone else in the chain.
After exchange of contracts there are potentially very serious financial penalties for withdrawing. At the very least the buyer will lose his deposit if he seeks to pull out; the seller will face an action for damages for breach of contract.
The deposit is paid by the buyer’s solicitor to the seller’s solicitor on exchange of contracts. It is a part payment of the price and credit for the deposit is given on completion when the remaining balance is paid over. The contract calls for a deposit of 10% of the price. If the buyer fails to complete, then subject to following certain procedures, the seller can keep the deposit.
Often, a buyer will not be able to pay a 10% deposit. It might be argued that a seller who accepts less than 10% deposit will be prejudiced if the buyer fails to complete. The seller might require the buyer to come up with a higher deposit. However, buyers fail to complete on time only very rarely – and we take the view that from a seller’s point of view it is better to exchange contracts as soon as possible with a low deposit to secure the sale rather than wait for a higher deposit to become available. The greater the delay in exchange of contracts the more chance there is that someone in the chain may back out – and this happens far more frequently than buyers failing to complete once contracts have been exchanged. For this reason, on your behalf we will accept whatever deposit is available at the time of exchange of contracts unless you instruct us to the contrary.