Valentine & CoProperty Lawyers

The Sale Process

Explained

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Important

¢ Any information you give about the property and its contents must be accurate. Your buyer could claim compensation for any inaccurate information and you could also be guilty of a criminal offence

¢ Anything you have agreed to include in the sale must be left in the property on the day of completion. Anything else, including rubbish, must be removed from the property, including the garage and garden

¢ You must continue to make your mortgage payments and any other loans until the day of completion

¢ Any mortgages and loans secured against the property will have to be paid off on the day of completion

¢ You must not confirm a completion day with your removal company until contracts have been exchanged

¢ You must not to treat any suggested completion date as fixed, regardless of whether all parties have agreed to it, until exchange has taken place

¢ Once contracts have been exchanged you cannot change your mind as the completion date is then legally fixed

¢ On the day of completion day you must move out. You must leave the property in the same condition as when you agreed the sale, and repair any damage caused by moving out

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Anti-Money LaunderingUK Government Regulations mean all new clients must prove who they are before we can deal with your matter which means we will have to carry out an identification check on every client. The identify checks remain valid for six months.

We offer you two options:

¢ you provide original documents

¢ we carry out an electronic identity check

Full details of these options will be sent to you with your initial pack of paperwork.

In some cases, for example, where a client lives overseas, this check may be little more complex, as the online identity check only works for UK addresses, but if that is necessary we will let you know and give you the options available.

Valentine & CoProperty Lawyers TimescalesIn all honesty, no one can say for sure at the outset how long a sale will take. If the buyer doesn't need a mortgage, doesn't have anything to sell, and you are not buying another property, then we would consider it reasonable for completion to be relatively quick. However, unforeseen issues with your properties legal title, for example, can cause delays.

Delays can occur for a number of reasons, such as incomplete information, a lengthy mortgage process, complications in the legal title of a property, long chains of sellers and buyers, disagreement between parties in a chain on completion dates etc.

Due to the regulations we have to comply with, we cannot speak directly to the other parties in a chain, only to the Conveyancer representing the parties on either side of your transaction. However, Estate Agents are not bound by the same restrictions and they are often much better placed to keep you informed as to what is happening up and down the chain. It is important that if you are made aware of any time scales, issues or delays in the process, from the Estate Agent or your buyer, that you pass that information on to us promptly. Please don’t assume that we will automatically be advised.

Whilst we will always do everything we can to achieve desired dates, you must be aware that until all the legal issues have been resolved, and everyone in the chain has officially confirmed they are ready, no dates should be taken as agreed (regardless of what anyone might say to you) and you should not make any firm arrangements as that will likely lead to wasted time and money. For example, by all means make provisional arrangements with a removal company, but do not confirm anything with them until we have confirmed to you that you have exchanged contracts.

Once dates have been agreed, we will need to speak to you on the day of exchange to confirm that you are still happy to proceed. Even if you have previously given your authority, we have to have spoken to you on the day to ensure your circumstances haven't changed, so it is important that you ensure we have a valid and working contact number for you as not being able to get hold of you will prevent us from exchanging.

Valentine & CoProperty LawyersAbout the Property

Energy Performance Certificate (EPC)

You will have to arrange an EPC before your property is marketed and you must make this available to your buyer before exchange of contracts. You should speak to your estate agent to ensure that one has been made available to the buyer. If you are not using an estate agent, then it is your responsibility to ensure that an EPC is provided to your buyer prior to exchange of contracts.

Property Information

You will be asked to fill in a form in which you will be required to detail things you know about the property. Regardless of who actually competes it, it is your responsibility to ensure that any information given about the property is accurate. A buyer can take you to court to claim compensation if it is discovered that any of the information given is inaccurate. You may also be guilty of a criminal offence under the Fraud Act 2006. It is your responsibility to let us know if any of the information changes. During the process you may be asked additional questions by the buyers Conveyancer. The same applies to the answers you give to those.

Contents of the property

You will be asked to fill in a form which details what is included in the sale, what is excluded from the sale (what you are taking with you), or what you are willing to offer for sale separately to the buyer. Again, It is your responsibility to let us know if any of the information changes. The form will become part of the contract.

Property Insurance Cover

You must ensure that your current buildings insurance cover stays in place and is paid until the day of completion.

Tenanted Properties

You will not be able to exchange contracts until the tenants have vacated the property, unless the sale is on the basis of the tenancy being taken over by the buyer.

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Forms

Terms of Engagement

When you sign the Terms of Engagement you are agreeing to our terms and conditions. You will be giving us authority to make certain binding promises to other parties in the chain, which are necessary to make the conveyancing process work. Those promises, once made, cannot be broken. You are also agreeing to us disclosing information to third parties within the Council for Licensed Conveyancers Rules and under the Data Protection Act 1998.

Adult Occupiers

Any non-owner adult occupiers will have to sign the contract to confirm that they have agreed to vacate the property on or before the day of completion. Signing the form does not mean that an occupier has any interest in the property.

The Contract

The contract, also known as the agreement, details what is being sold by you, the price, and the buyer. You must tell us if any of the details in the contract are incorrect when you receive it. You will be sent the contract ahead of exchange of contracts, to sign in readiness. Until contracts have been exchanged the contract is not binding and is not a guarantee that exchange will take place, it is just a step in the preparations. You must not date the contract.

The Transfer

The transfer confirms what is detailed in the contract. It describes what you are selling and the price. It is the document which will transfer ownership of the property on the day of completion. We will not be able to complete without the correctly signed transfer regardless of whether we have exchanged contracts. You are the transferor and the buyer is the transferee. You need to sign the transfer in front of an adult witness. The witness should not be a member of your family or involved in the transaction, for example, a neighbour or work colleague. After you have signed the transfer, your witness should then sign, and also write in their name and address. You must not date the transfer.

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Leasehold Properties

If you are selling a leasehold property (a flat, for example), you should be aware that these cases do take longer than a freehold sale. The buyers conveyancer will require you to supply what is often referred to as a management pack, which will include such things as any planned expenditure, last three years accounts and any outstanding bills. This is supplied by the management company or freeholder. It is usual for them to charge for this and you will be responsible for the cost, which can vary greatly depending on the company. Unfortunately, the buyers conveyancer will not accept information provided by you instead of this pack. Time scales to receive the pack also vary greatly.

On completion, it may be necessary to apportion ground rent and service charges up to the completion day, and any payment due from you to cover that period will usually be deducted from the sale proceeds. In some cases we may have to agree to an amount being retained in lieu of the final accounts being produced. Once the final accounts are produced (which can be a long time after completion) the figures are calculated and agreed and you will receive any of the money held back which is not needed.

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Funds

Completion Funds

Where you are both selling and buying, we may need money from you to complete the sale of your property. Near to completion we will send you details of the money we require from you, and usually include a draft statement to show you how the figure has been calculated. You must check the statement carefully and notify us if there are any errors or omissions. You will need to send the money to us as cleared funds in time for the completion day. The best method of sending cleared money to us is by a direct bank transfer to arrive on the day before completion to avoid any potential delays in the money arriving through the banking system. Your bank may charge you for sending the money to us.

Paying off your existing mortgage

We will obtain a statement from your lender showing the amount to pay off your mortgage and provide you with a copy. It is important that you check the statement for errors and any penalties for early repayment. Tell your lender and ourselves if you think the statement is wrong. If you have any questions about it it is usually best to contact the lender as they will be able to advise how they calculated it.

You must continue to make payments to your mortgage, and other relevant loans, until the day of completion. If there is an overpayment, the lender will usually refund it back to the account from which you make the payment. This can take up to a week to arrive.

It is not possible to transfer a mortgage to another property, you would have to apply for a new mortgage even if the details are the same. In some cases you can transfer or port a product from an existing mortgage to a new mortgage with the same lender, and your mortgage advisor or lender can usually advise you in this respect.

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Exchange

Exchange of Contracts

Once contracts have been exchanged, you have legally sold the property. Exchange of contracts is carried out on the telephone by us and is binding on you once it has taken place. Should either the buyer or yourselves decide to withdraw from the transaction after exchange, there will be substantial financial penalties and costs payable by the party who withdraws. Therefore, we cannot exchange contracts until you have confirmed that you consent to this. We must speak to you on the day of exchange to obtain your agreement, regardless of whether you have previously given consent. If you are selling with another person we will obtain this consent from only one of you unless we believe it would be in your best interests to speak to all parties or you have given us your specific instructions to speak to all parties. On exchange of contracts the completion day is fixed. We will let you know once contracts have been exchanged, after which you can then confirm the completion day with your removal company, and arrange final bills for household services and council tax.

Estate Agents Fees

We will ensure that the Estate Agents invoice (if you are using one) is paid on completion, unless you give us your specific instructions not to. You should let us know right away if there are any errors in their figures.

Balance of Money

If there is any money due back to you once all fees and expenses have been paid, you will be given the option of how you wish us to send those funds to you. However, we will only pay it to the sellers own UK bank account, by bank transfer. We no longer issue cheques for these funds. We will not make payments to third parties on your behalf.

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Completion

Completion dates

Completion must take place Monday to Friday. You cannot complete at the weekend, or on a bank holiday as the banks will not transfer money on these days. You should try to pick a completion day giving at least one week between exchange of contracts and completion to give you more time to finalise your arrangements. It also ensure that we have sufficient time to get everything in place ready for completion.

Exchange and complete on the same day

Referred to as simultaneous exchange and completion. Whilst it is possible to do this we have to make you aware of the risks before you instruct us to do this. As there is no legal commitment until exchange of contracts there is no certainty that completion will take place, either on that day or, in the worst case, at all. You may have made arrangements for time off work, for the delivery of furniture, booked removals, packed your belongings, but there is a risk that despite everyone

Completion

Completion occurs when we receive the sale proceeds from your buyers conveyancer. You must then move out of the property and allow your buyer to move in. As a guide, you should aim to be out of the property by 12 noon. You must leave the property clean and tidy, and free of any rubbish. Any damage cause by moving out, or removing items from the property that aren't included in the sale must be repaired by you. Anything you have agreed to leave or sell to the buyer must be left in the property.

Your keys

You should not hand your keys over to anyone until we have confirmed to you that completion has taken place.

Valentine & CoProperty LawyersTh

e S

ale

Pro

ce

ssSeller instructs a Conveyancer to act

Seller receives initial paperworkCompletes the paperwork and send it backPay funds on account

Conveyancer sends replies

All funds received

Enquiries dealt with by Conveyancerwhere possibleEnquiries sent to seller to reply to wherenecessary

Conveyancer reports to seller with thecontract for signature

Completion date arrivesFunds received from buyers ConveyancerCompletion takes place

Completion date agreed by all partiesin the chain

All parties in the chain ready to exchangecontractsContracts exchangedCompletion date is now legally binding

Redemption figure received from existinglender

Seller returns replies

No further enquiries raised

Existing mortgage is redeemedEstate Agents fees paid

Additional enquiries received

Enquiries received

Contract pack prepared and sent tobuyers Conveyancer