These notes have been prepared to give you information on the procedures involved in buying a residential property and general advice on specific aspects of the transaction. In practice, the actual processes may vary slightly. If you have any queries, please do not hesitate to ask for further information.

A summary of what's involved

• We receive details of your proposed purchase from the Estate Agents
• You instruct your Surveyor to carry out a Survey of the property; and/or
• You arrange your mortgage
• We receive a Contract and detailed information about the property from the Seller's solicitors
• We make a search at the Local Council (the Local Search) and any other relevant searches
• We receive a copy of your Mortgage Offer from your lender
• We raise any necessary further enquiries with the Seller's solicitors
• We report to you on all aspects of your proposed purchase and you raise any additional queries
• You sign your part of the Contract and agree a Completion Date for your purchase
• You ensure all your financial, removal and all other arrangements are in place
• You pay a Deposit and we "Exchange Contracts" with the Seller's solicitors

AT THIS STAGE, THE CONTRACT IS LEGALLY BINDING ON BOTH PARTIES

• We report to your lender and request the mortgage advance for completion
• We provide you with a Statement showing the amount required to complete your purchase including all costs
• You provide us with any money required to complete the purchase
• On the Completion Date, we electronically transfer the money to the Seller's Solicitors through the banking system. As soon as they have received this you can take possession of the property. This will usually be around lunchtime.
• Following completion, we send the completed ‘Land Transaction Return' to H M Revenue & Customs together with payment of any Stamp Duty Land Tax due. When receipt of this payment is confirmed we then send the Transfer, signed by the Seller, to HM Land Registry who register your ownership of the property. The Land Registry issues a "Title Information Document", and we send you a copy of this.
• In most cases we then send the Title Information Document and any other relevant documents to your Lender. Where your Lender does not require these documents they are passed on to you.

Important points to note

Local Search

It should be emphasised that the Search at the Local Council will only reveal matters relating to the property being bought and nothing relating to any adjoining or other properties in the neighbourhood. If you require more detailed information about the surrounding area, you should contact the Local Authority direct.

The fee in respect of the Local Search is not refundable if you do not proceed with your purchase. We will normally put this in hand as soon as we receive details from the Seller's solicitors, but if you wish to delay this until you have a firm mortgage offer, please let us know immediately.

Survey

Unless you are buying a new property, we strongly advise you to instruct your own Surveyor to carry out a full inspection of the property and to provide you with a full Report, before exchange of Contracts when you are committed to buy the property. We advise this for the following reasons:

• There may be physical defects which are not readily apparent, or repair work required in the foreseeable future, which may affect your decision to buy the property.
• The Surveyor will also give an opinion as to whether the agreed purchase price is close to the market value of the property
• Although your lender will instruct their own surveyor to provide them with a Valuation Report there may be defects in the property which are not revealed by the inspection carried out by their Valuer, or omissions or inaccuracies in the Report which, whilst not relevant for the purposes of the lender, may be of great importance to you as a buyer. You should not rely on the Valuation Report in deciding whether to proceed with your purchase.
• The purpose of the Lender's Valuation Report is to provide the Lender with confirmation that they will recover the money they are lending you in the event that they have to exercise their power of sale. Their interest in the matter is therefore different to yours.

Apart from the Valuation Report prepared for your Lender, there are generally two other types of survey:

• Home Buyer's Valuation and Survey Report - This may provide sufficient information if you are buying an ordinary suburban property built within the last 75 years. However, this is not a full structural survey and is not an absolute guarantee of the state and condition of the property.
• Full Structural Survey - This is a more detailed (and therefore costly) survey and should reveal the true state and condition of the entire property, provided the Surveyor is instructed to investigate all aspects of it.

If the property is not connected to the main drainage system you should consider requesting a separate drainage survey. Similarly, if the electrical wiring has not been inspected and reported on in the last 5 years, you should consider a separate electrical survey.

We may need to see a copy of the Valuation Report prepared for your lender, and if so we will ask you for one.

It may be particularly important to consider a full structural survey where you are buying a Listed Building where the cost of repair or improvement works could be high due to the need to comply with local planning authority requirements.

Insurance

Unless you have arranged for the property to be insured by your lender, or it is insured by your landlord, you will be responsible for insuring the property from the date of exchange of contracts and you should put these arrangements in place as soon as possible.

We will need to see details of the insurance cover, including sum assured, risks covered and amount of any excess. The policy should be index linked and it is often a condition of any mortgage offer that the insurance is in the joint names of the lender and the borrower. You are also required by your lender to have public liability insurance.

Once the policy is ready to go on risk, you should notify the insurance company or broker as soon as contracts have been exchanged.

Boundaries, etc.

We do not usually visit the property unless there is a specific requirement. It is extremely important therefore that you advise us of any apparent lodgers or tenants in the property.

Please also make a thorough inspection of the garden and boundaries and let us know immediately if there is any uncertainty, or whether there appear to be any rights of way across the property. We will send you a copy of the Land Registry title plan and you should check this carefully to ensure that it accords with your understanding of the extent of the property you are buying.

Deposit

The Contract provides for payment of a 10% deposit on exchange of Contracts, although it is sometimes possible to agree a figure of 5%. However, please be aware that if you pay less than 10% and then fail to complete your purchase, the balance becomes immediately payable and your Seller may pursue you to recover this debt. If you expect any difficulty in providing at least a 5% deposit, or if you are required to give notice to secure the release of funds, then please make us aware of this in good time.

Representations made by Seller

Please let us know if you enter into any separate negotiations or financial arrangements with the Seller, so that these may be recorded formally in writing. If you do not do this, these may not be enforceable. You may only rely on representations made by the Seller in writing through his solicitor. Thus if the Seller has made any oral representations to you on which you are relying in respect of your purchase, please let us know so that we may ask for written confirmation.

Co-ownership

If you are buying a property jointly, or with the help of a loan (other than a mortgage) or a gift of money from another party, it is important that you provide us with specific instructions in this respect, so that we can properly advise you on all the implications.

Ownership of adjoining land

Please let us know if you or the seller are the owner of any land adjoining the property you are buying, and over which you require access or the provision of services to the property.

Evidence of Identity

As required by the regulations governing money laundering, we will need to obtain evidence of your identity and confirmation of your address, before carrying out any work for you.

Balance of purchase monies

As part of our standard instructions from your lender, we are required to check that you are providing the balance of the purchase monies from your own funds, without recourse to further borrowing. You will also need to confirm that you have no intention of giving a second charge over the property and that you are aware that you must obtain consent from your lender prior to any letting of the property. If you cannot confirm these points, then we are under a duty to report the fact to your lender, although we will not do so without your express authority.

Other occupiers

Please let us know the names of any other person who is aged 17 or over who will be living at the property with you. As such occupiers may acquire formal legal rights over the property it will be necessary for them to sign a Consent to the mortgage and to receive independent legal advice about this.

Mortgage Indemnity insurance

If you are borrowing a high percentage of the value of the property (usually over 75% of the purchase price), then you may be required to pay for mortgage indemnity insurance, sometimes known as a "High Loan to Value Fee". It must be emphasised that the benefit of this policy belongs to your lender only and in the event of a claim, the insurance company has the right to pursue you to recover any monies paid to the lender under the policy.

Life Assurance

You should be aware that in the event of your death before the mortgage on your property has been repaid your lender would probably seek early repayment of the mortgage. This could cause major difficulties for anyone else who had been living with you in the property. It is therefore a sensible precaution to arrange life assurance sufficient to cover the balance of the outstanding mortgage at any time. Your lender may well have discussed this with you and be arranging suitable life assurance.

Your responsibilities and liabilities under your mortgage

Please be aware that if you do not keep up the monthly repayments due under the terms of your mortgage, then your lender has the right to take possession of your property and to sell it to recover the amount of your loan. In this event, further costs and interest charges will be added to the total and if there is a deficit after the sale of the property, the lender may pursue you through the courts for this debt.

You should also understand that if your mortgage is in joint names, your liability is "joint and several" and your lender may pursue either party for the whole debt, even if one party is no longer living at the property.

You will be provided with a copy of the current conditions relating to your mortgage and it is extremely important that you read and understand these. If you have any further queries about the nature or implications please do not hesitate to ask.

Taxation

As in the case of any financial transaction, there may be taxation consequences of your property purchase. These include Income Tax, Capital Gains Tax (CGT) and Inheritance Tax. Without a thorough appraisal of your financial position it is not possible to advise you fully on all the tax implications of the proposed purchase. However, if the property is not going to be your only or main residence for CGT purposes or you will not have exclusive occupation for the whole of the period that you will own it, CGT is likely to be a consideration and you should discuss this with us. If you would like separate detailed advice on the overall taxation implications of the purchase we would be pleased to provide it at an additional fee which we can discuss with you.

For further advice contact our team direct or talk to your usual contact in the firm.