Our team: Claudia Carter
Buying or selling a property can be one of life’s most difficult challenges. Whether or not you are a first time buyer or seasoned pro, the process can be stressful and throw up surprises that you did not expect. It is one of life’s adventures and challenges, where it pays to invest a little more time in considering who you take along that journey with you, and how you can equip yourself with the best tools for the job. As the old adage holds true, forewarned really is forearmed.
1. Think about the money
Moving is an expensive process. You should ensure that you research your financing options well and consider using a whole of market broker who may be able to source finance options you have not considered. Remember to factor in Stamp Duty Land Tax due on the purchase, or any Capital Gains Tax that may be applicable on a sale. You may need to consider taking tax advice on structuring if either the property or your personal circumstances dictate it.
2. Choose the right estate agent
This choice is a personal one. When you are purchasing a property you will not be in control of who the agent is and will need to get along with agent chosen by the seller. After all, they will be the one putting forward your offer to the seller so you will need to present yourself in the best light – this will usually mean: the ability to act flexibly, quickly, and with the funds to enable both these things. Where you are the selling party, you would have chosen your estate agent either based on the right fit for your property, for example, there may be one agent that has particular knowledge of a block of flats, or perhaps one that you “clicked with” more than others. If you are the seller, the estate agent is acting as your agent in the sale, and it is important that you feel a connection with them (or at least feel confident that you have chosen the right man or woman for the job).
3. Do you need a buying agent?
This is a point that often gets overlooked. As mentioned above, the estate agent is the agent for the seller. So no matter how chummy they are with you (as the buyer) they do not need to act in your best interest, especially if those interests conflict with the seller’s best interests. A buying agent will not only help you find the right property (if you need assistance with this), they will negotiate your offer, and continue to act on your behalf throughout the process. A buying agent will mean that as a buyer, you can step back a bit from the details and leave any stressful points of negotiation to someone else.
4. Do you need a planning expert – what is your end goal?
Depending on the type of property you are purchasing you may wish to consider obtaining specialist legal planning advice on the existing planning position of the property. They will then be able to offer advice on planning going forward to ensure you keep abreast of any planning changes which would affect the development work you wish to carry out. If the contract is to be conditional upon planning permission it would be highly advisable to obtain this specialist advice. A planning solicitor would generally work alongside a planning consultant to ensure your visions for the property and your legal duties are aligned.
5. Legal process – what’s involved?
This is where we get down to the detail of the process:
6. Managing expectations
Quite often it is easy to get sucked into the detail of the pre-contract enquiries without coming up for air to a) look at the bigger picture or b) communicate any intentions you have to the estate agent or other party, or even to your solicitor, to ensure that expectations are managed. Most transactions that come to an early end do so because expectations were not managed and people were not clear about their intentions at the beginning. It is important to keep lines of communication open so you can all work towards a common goal.
7. Exchange – how to prepare
Your solicitor emails you with the magic words “We are ready to exchange”. It is easy to get caught up in the celebration of being able to see the finish line, but it is important to stay focused. The transaction is not legally binding until you have exchanged contracts.
If you are the seller, you need to ensure that your solicitor is holding a signed contract and that you are ready to complete and move out on the day of or before completion. You will also need to make sure that your solicitor has a redemption statement for any charge that is on the property so that this can be fully redeemed on completion.
If you are the buyer, you need to ensure that your solicitor is holding a signed contract and the deposit (usually 10% of the purchase price). You also need to ensure that you are ready to move the balance of funds for completion (including any Stamp Duty Land tax due) to your solicitor’s client account, usually by the working day before completion. You are contracting to purchase the property on a particular date. If you miss the date of completion because you do not have the funds in place (or for any other reason), then you may be charged interest on the balance of the purchase price under the terms of the contract. You are also at risk of losing your deposit.
For both parties, this is the time to take one final check over whether you want to sell or buy the property as this is the point of no return. As a buyer you may need to consider (if you have not done so before, preferably at stage 1 above, whether you need tax structuring advice)
The actual exchange of contracts is a telephone call that take place between the solicitors where a series of undertakings are given to dictate how the deposit funds are to be held and where. The deposit is usually held by the seller’s solicitor as stakeholder for both parties pending completion.
There are many options out there for removal companies ranging from a man with a van to a full team of specialists who will help you pack and unpack your belongings under your strict guidance. Personal recommendations are advised and people are generally quite willing to give a recommendation (or warning as the case may be).
9. Day of Completion
You have finally made it to completion. If you are the seller, hopefully the property is clear by the morning of completion at the latest. You will need to drop the keys off with the estate agent so they are ready for the buyer to collect once they have completed. Completion usually occurs around 2pm on the day of completion but the solicitors are at the mercy of the banking process and it will all depend on how fast the money moves.
If you are the buyer, you would have hopefully followed the advice above and your funds will be in your solicitor’s client account the working day before completion along with any mortgage funds needed (which will go straight from the lender to your solicitor’s client account), and be ready for the solicitor to send to the seller’s solicitor the morning of completion.
10 …. and breathe
You made it through one of life’s most stressful periods.
The Fladgate residential, private client and tax teams are highly experienced in giving bespoke, personal, discrete and tailored advice in the context of residential transactions, whether it be dealing with high value properties, multi-let / buy to let portfolios or multi-disciplinary off shore structures or even probate or auction deals.
Do not hesitate to contact the team for advice.