Before Exchange of Contracts
This stage begins once the seller has accepted an offer. The property is then normally described as “sold subject to contract”. At this point, neither the buyer nor the seller is legally committed to proceed, and either party may withdraw or seek to renegotiate until contracts are exchanged.
Appointing the conveyancers
The estate agent sends a memorandum of sale to the buyer, the seller and their respective solicitors or licensed conveyancers. This records the agreed price, the parties’ contact details and other important information about the proposed sale.
Both conveyancers will carry out identity and anti-money-laundering checks. The buyer’s conveyancer will also need evidence showing where the purchase money and deposit are coming from.
Preparing the contract papers
The seller’s conveyancer obtains the title information from HM Land Registry and prepares a draft contract for the buyer’s conveyancer.
The seller will usually be asked to complete:
- a TA6 Property Information Form, covering matters such as boundaries, disputes, alterations, guarantees, insurance claims, services and environmental issues;
- a TA10 Fittings and Contents Form, recording what will be left at or removed from the property; and
- for a leasehold property, a TA7 Leasehold Information Form.
It is important that these forms are completed carefully, honestly and as fully as possible. The seller may also need to provide planning permissions, building-regulation approvals, guarantees, certificates and other supporting documents.
For a leasehold property, the seller’s conveyancer will normally obtain a management information pack from the freeholder, managing agent or management company. This may contain details of service charges, buildings insurance, planned major works, ground rent and the requirements that must be met when the property changes hands. Obtaining this information can take time, so it should be requested as early as possible.
The buyer’s investigations
The buyer’s conveyancer reviews the draft contract, title documents and property forms. They will check matters including:
- whether the seller has the legal right to sell;
- the property’s boundaries;
- rights of way and rights over neighbouring land;
- restrictive covenants;
- planning and building-regulation matters;
- arrangements for roads, drains and services;
- any mortgages, restrictions or other entries on the title; and
- additional leasehold obligations, where relevant.
The buyer’s conveyancer will also order the searches appropriate to the property and its location. These commonly include local-authority, drainage and water, and environmental searches. Other searches may be recommended where there are particular risks, such as flooding, contaminated land, mining or nearby infrastructure.
Enquiries
After reviewing the papers and search results, the buyer’s conveyancer raises enquiries with the seller’s conveyancer. Some can be answered from the documents already supplied, while others will require information or evidence from the seller, freeholder or managing agent.
Enquiries are intended to clarify legal matters affecting the property. They are not a substitute for a survey or for the buyer making their own enquiries about the physical condition of the property and the surrounding area.
Mortgage and survey
If the buyer requires a mortgage, the lender will arrange a valuation and, once satisfied, issue a formal mortgage offer. A mortgage valuation is carried out for the lender’s benefit and is not the same as an independent survey.
The buyer should consider commissioning an appropriate survey from a qualified surveyor. If the survey identifies significant defects, the buyer may seek specialist advice, ask the seller for further information or attempt to renegotiate the price before exchange.
Preparing to exchange
Before contracts can be exchanged, the buyer will normally need to be satisfied with:
- the contract and title;
- the replies to enquiries;
- the search results;
- the survey;
- the formal mortgage offer, if applicable;
- the fixtures and fittings arrangements;
- the source of the deposit and purchase funds; and
- the proposed completion date.
The seller and buyer must agree a completion date, including every linked transaction in a property chain. Both parties will sign their respective copies of the contract, but signing alone does not make the transaction legally binding. That happens only when the conveyancers formally exchange contracts.
Buyers should take particular care when transferring money. Criminals sometimes impersonate solicitors and send false bank details. Bank details should always be checked using a trusted telephone number before any payment is made.
