Last month I examined the conveyancing process up to the point where we are ready to sign contracts. Now I would like to explain how we get from there to moving in.
All the searches and enquiries have been done and the buyer is happy with the results. They know what they are buying and the contract correctly reflects the deal they have reached. They have a firm mortgage commitment. They sign the contract. But then what?
Firstly, contracts need to be exchanged. Each party to each sale and purchase in the chain needs to exchange their signed contract for the other parties, simultaneously with all the others, with the agreed completion date for all parties and with the deposits being paid to each seller.
There is a lawyers’ protocol to enable this to occur. Basically, all the contracts are sent to the other parties’ lawyers with the deposit cheques, but on the basis that exchange of contracts will only take place when the lawyers agree by telephone that it has taken place. This enables near-simultaneous exchange of contracts and avoids anyone having a contract to sell their house without having a contract to purchase the new house in place.
The next stage is for final pre-completion searches and enquiries to be made (called ‘requisitions’), principally to check that nothing has changed since the buyer first looked at the house. All the meters will be read and any rental payments apportioned so that, at the agreed date, the buyer takes responsibility and the seller loses liability for the outgoings. Removal firms will have to be booked and arrangements will be made for the buyer/seller to receive/hand over the keys.
It is at this stage that a mortgage cheque is required. The purchaser’s lawyer will carry out official searches at the Land Registry (most cases nowadays are registered land) to protect their client’s interests as purchaser and the lender’s interests as mortgagee (and will obtain priority periods during which no one else can register any interest ahead of them). The lawyer will also send the lender a ‘report on title’, which confirms that the lender will get a valid mortgage over a property that will provide good security for the loan.
If the lender is happy, the funds will arrive, the seller and the buyer will sign a transfer deed, passing legal title to the property to the buyer on completion, which then takes place. This is often done by post, with all documents being handed over in advance, subject to payment of the funds by bank transfer on the great day. On that day, the funds will be transferred, the deal will be completed and the seller can move out and the buyer can move in.
All is not quite done. The seller’s mortgage will be paid off out of the sale proceeds and within a few days the mortgage will be released and the stamp duty has to be paid. The buyer’s lawyer can then register the change of title and the mortgage at the Land Registry within the priority period referred to above.
When the final bills are paid, the house purchase process is complete.