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Buying and Selling Homes - The Jargon
Buying or selling a house can be a stressful process, and perhaps what doesn’t help is all the legal jargon that comes with it.
The name often given to the process of buying or selling a house by solicitors is conveyancing. What we have tried to do is set out below some of the basic phrases used in the conveyancing process which you may come across to help you understand them:
Home Information Pack (HIPs): The seller of a property must provide a HIP when they put the property on the market. The HIP contains essential legal documents which provide information about the property, including who the owner is and where the boundaries are to the property. Bradshaw Hollingsworth can provide your HIP to you and your estate agents, so talk to us first before putting the property on the market or ordering your Home Information Pack.
Searches: When you buy a property, it is necessary to check what may affect the property. This ranges from planning issues to flooding, mining to contaminated land. All solicitors should carry out a range of searches on the property, and these involve fees being paid (often described by solicitors as disbursements). These charges will be broadly the same whichever solicitor you use, but do make sure you ask if the quotation you are given includes these additional charges, and if the quotation does not include them, ask for a written quotation with the charges included. At Bradshaw Hollingsworth, we provide quotations over the telephone and then send them to you in writing, with a full breakdown.
Exchange of Contracts: This is the point in time when you commit to buying or selling the property. After your solicitor has explained to you about the property and given a report to you about it, you will be asked to sign a contract agreeing to the transaction in readiness for exchange of contracts. The solicitors then agree to the exchange of contracts, at which point, the transaction is binding i.e. you are committed to buying or selling the property, and if you wanted to change your mind, there is likely to be serious financial consequences. The buyer will usually pay the seller a deposit on the exchange of contracts, often 10% of the price. The actual transaction may not take place that day. There is often a delay of a week or two to allow the parties to prepare for the move in date, especially when there are a number of parties involved in a chain.
“Conveyancing is the name given by solicitors to buying and selling homes.”
The Chain: This is an expression that you may hear from Estate Agents and Solicitors during the sale or purchase of your home. Since people often buy and sell at the same time, there is often a series of transactions involving the buying and selling of properties amongst a number of different home owners. For example, A may buy from B, B will buy from C, and C will buy from D. A will be the bottom of the chain, and D at the top. Of course, it can run into a lot of different parties, and not just four in this example. Solicitors and Estate Agents manage this chain for you, but it does mean that you will need to have a degree of flexibility on the day your property is bought or sold since a date will have to be agreed between all the different parties involved in the chain.
Mortgages: Most people fund their purchase by a mortgage. During the conveyancing process, your solicitor will usually also act for the Mortgage Company, checking the title to the property for them too. Solicitors have certain obligations to the Mortgage Company, and the solicitor will need to ensure that you are advised about the terms of the mortgage - this is the role of the solicitor. Finding the right mortgage is not usually the role of the solicitor, but Bradshaw Hollingsworth can provide you with contact details of an Independent Mortgage Broker who can advise you on finding a mortgage. Please contact us on mail@bhlaw.co.uk if you would like a list of Independent Mortgage Brokers that can help you.
Completion: This is the final stage of the process, and is usually the day that you move into your new property. On the day of completion, the remaining balance of the purchase price is paid by the buyer to the seller. It will also be necessary for the buyer to pay a fee to the Land Registry to register the purchase of the property and to record the new ownership of that property. It may also be necessary to pay Stamp Duty.
Stamp Duty: Stamp Duty is a tax imposed by H M Revenue and Customs. The threshold for Stamp Duty starts at £125,000 (although there is a temporary threshold of £175,000 applicable until 2 September 2009 which has been an attempt to stimulate the property market during 2008). The amount of Stamp Duty is based on a percentage of the purchase price, and varies from 1% to 4%. The current rates are as follows:
£0 - £175,000: 0% (applicable until 2 September 2009)
Over £175,000 to £250,000: 1%
Over £250,000 to £500,000: 3%
Over £500,000: 4%
Please note, these rates vary depending on the type of land and whether the land falls within what HMRC describe as disadvantaged areas, and whether the land is residential or non-residential land.
We can provide you with a free Law Society guide called “Your guide to buying a home”. Please contact us if you would like a copy.
"Our approach is to take you through the process efficiently in a friendly and helpful way."
If you would like a quotation for buying or selling a house, or a re-mortgage, the purchase of a buy to let property or require a Home Information Pack for your property, please contact us on 0116 204 2500 or by email on conveyancing@bhlaw.co.uk
Bradshaw Hollingsworth provide specialist legal advice in the areas of Employment Law, Litigation, Commercial, Insolvency, Debt Recovery, Wills & Probate and Property, including residential conveyancing, house sales, house purchases and re-mortgages. For more information about our services please contact Greg Hollingsworth of Bradshaw Hollingsworth Solicitors, 19 New Walk, Leicester on 0116 204 2500 or by email at greg.hollingsworth@bhlaw.co.uk.
Partners: Robin Bradshaw and Greg Hollingsworth - Bradshaw Hollingsworth is regulated by the Solicitors Regulation Authority.
