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Here are some frequently asked questions which sellers raise with our Property Lawyers when using Countrywide Home Conveyancing.
What must be disclosed about the property?
Your estate agent will prepare sale particulars on your property, which you will be asked to approve.
Your lawyer will ask you to complete a Property Information Form that asks questions about things you will know from living in the property.
All information given must be accurate, as a buyer can take you to court to claim compensation if the information given is false. For instance, if there has been a neighbourly dispute in the past, this must be disclosed.
It is also your responsibility to tell your estate agent and your lawyer if any of the information changes.
Your lawyer will ask you to complete a Fixtures, Fittings and Contents Form, to identify what is included, what is excluded, or for sale separately. This needs to be completed carefully, room by room, and you should retain a copy, to remind yourself later on as to what you have agreed.
This list will form part of the Contract, to make it legally binding upon you. You must tell your lawyer if the details change after you have completed the list.
How long will it all take?
Unfortunately, no one can give a cast iron guarantee, until exchange of contracts has taken place. Please see the next question below, to find out more about exchange of contracts.
If you are just selling and not buying another property; there is no chain of properties involved; and your buyer has no mortgage, then it is possible for the sale to be completed quickly once the legal paperwork has been signed.
However, delays can happen for a variety of reasons, many of which are outside of your control. There may be a chain of properties involved, another party involved may be slow in engaging a lawyer or applying for a mortgage, or parties may not be able to agree on a completion date. Unfortunately, people can say one thing and then do something else, or just change their minds.
Countrywide Home Conveyancing will work with you, your estate agent and the other lawyers involved to try and achieve an early exchange as possible, to give you peace of mind.
The Seller and the Buyer will each sign an identical contract, for the sale of the property. When the Buyer and the Seller are ready to proceed, with a date for moving agreed in principle, and their lawyers have completed all the tasks required for them, then the lawyers will speak to each other on the phone, and agree to “exchange the contracts”. The contracts will then be dated and swapped over, in the post.
From the moment that the exchange of contracts has been agreed on the telephone between the lawyers, you have sold the property and the agreement becomes legally enforceable. Neither you nor the buyer can then change your mind about selling or buying the property, or change the date for completion of the sale, as recorded in the contract, without having to pay compensation.
Countrywide Home Conveyancing will contact its customers once contracts have been exchanged. Now is the time to confirm the completion day with your removal company; arrange final bills for household services and council tax, and organise utilities and other services for the property you are moving to.
No – most lawyers will recommend that you continue your current buildings insurance cover until the completion date, as you are obliged to hand the property over in the same condition as it is now.
What happens with my existing mortgage or loans?
Your existing mortgage will need to be removed from your property on the completion day, so your buyer can take on your property free of debt. Even if you are planning to stay with the same lender, you will normally need to make a new mortgage application, to create the mortgage on the property that you intend to buy. Your Mortgage Consultant can explain this further for you.
All debts secured on a property (such as a business overdraft facility, personal loan, Legal Aid charge, or another type of financial charge) will need to be removed from your property on the completion day so that your buyer can take on your property free of debt.
In certain circumstances, you may be able to transfer this secured debt to your new property, but this often takes a lot of time to organise, and if you want to do this, you should discuss this with your Mortgage Consultant as quickly as possible. If the holder of the debt gives their approval to transfer the debt, they will need to send written instructions to your lawyer. This additional legal work will normally incur additional legal fees.
This will be dealt with by your lawyer on the completion date, out of the sale proceeds.
Countrywide Home Conveyancing will send you a copy of the statement from your lender, showing the amount required to pay off your mortgage. The amount showing on the lender’s statement can sometimes be higher than expected – this might be because it does not show the last payment made, or it might include a penalty for early repayment of a fixed-rate mortgage. Please check your statement carefully, and contact your lender if you have any queries or concerns.
This is not recommended. You must continue to make payments on your mortgage and any other loans until the completion day, otherwise you could breach the terms of these agreements, and incur financial penalties. Any overpayment will be refunded by your mortgage lender or Loan Company.
If your mortgage debt and the costs of selling your property are more than the sale price, then this is known as “negative equity”. You will need to have sufficient money to cover the difference, ready to pay to your lawyer.
What documents do I sign to sell my property?
The contract describes what is being sold, by whom, at what price, on what date and to whom. It also contains terms and conditions that will govern what will happen if the sale is not completed on the agreed date, or if there is a dispute between the buyer and the seller after contracts have been exchanged.
You will be asked to sign the contract, in readiness for the exchange of contracts. Once you have signed it, this does not mean that you have sold the property, until an exchange of contracts has taken place. For your peace of mind, Countrywide Home Conveyancing will contact you as soon as exchange of contracts has been achieved.
The transfer is used to record the change of ownership at HM Land Registry. It contains all the details that were agreed in the contract, including the price. This document has to be signed in the presence of a witness.
You will be asked to sign the transfer in readiness for completion. Once you have signed it, this does not mean that you have legally transferred the property. This document only becomes effective once your lawyer has dated it, on the completion day. It is very important that this document is returned to your lawyer as quickly as possible, as your lawyer will be unable to complete the sale of your property unless it is in his or her possession.
What happens on completion?
On the completion date, your lawyer will receive the money from the buyer’s lawyer, and will then date the Deed of Transfer to formally transfer your ownership of the property to the buyer. You must move out of the property on that day so that the buyer can move in.
If you fail to move out of your property on the completion date, you will be liable to pay substantial compensation to the buyer. You must bear this in mind when the completion date is being negotiated so that you are able to move out of the property on that day.
Do not try and agree to alternative arrangements with your buyer that differ from those recorded in the contract, as any private arrangement reached could subsequently get ignored by the buyer. Your buyer is entitled to a vacant property on the completion date and might refuse to complete the deal if you are not moving out on the day.
Completion must take place on a normal working day, between Monday and Friday. Although Countrywide Home Conveyancing is open seven days a week, most lenders and banks will not transfer money at the weekends, at the moment.
This is possible but is not recommended as it gives no certainty to the buyer or seller that it will all take place on the date intended. And if there is an unexpected delay, you will not be entitled to any compensation.
You are recommended to pick a completion day that gives at least one week between an exchange of contracts and completion - so you can book your removals, and arrange final bills for utilities, household services and council tax, safe in the knowledge that the completion date is now legally binding.
You should aim to have moved out of your property by midday on the completion date, and the property left clean and tidy, ready for your buyers to move in. All rubbish, including items in the attic, should be removed, and those items (as recorded on the Fixtures, Fittings and Contents Form) left in the property, as agreed.
It is sensible to contact the buyers directly, to agree on how the keys will be dealt with on the completion date. You can leave them with your estate agent, or you can hand them over directly to the buyers. Keys should only be released once your lawyer has received all the purchase money from the buyer’s lawyers. Countrywide Home Conveyancing will notify you as soon as the purchase money has been received, so this can take place.
If completion is delayed or does not happen at all and this is the buyer’s fault, then you will be entitled to claim compensation from the buyer. However, if you fail to vacate the property, or if it is your fault that completion is being delayed, then the buyer will be entitled to claim compensation from you.
If contracts have not been exchanged, then neither buyer or seller are entitled to compensation if a simultaneous exchange and completion fail to take place as planned.