Different Roles in the House Buying Process
The transfer of legal title in property is known as conveyancing. This can be done by solicitors or by licensed conveyancers. Title to land and property in England and Wales is either registered or unregistered which affects the exact procedures involved in conveyancing. The aim of transferring the title is to pass the freehold or leasehold right of ownership from a seller to a buyer.
Registered and Unregistered Title
The transaction of title to land being disposed of is recorded at one of the 14 Land Registry offices. This registration guarantees the title of the registered proprietor. There are some titles to land and property which are not registered at the Land Registry. When they are next sold, they must have their title registered.
Legal Advisers
Usually both the seller and the buyer have their own acting solicitor. It normally takes around six to eight weeks to reach exchange of contracts, although the process may be quicker or slower. Following exchange is a two to four week period before completion takes place, although this too may be shorter or longer. The seller’s solicitor prepares a contract from the deeds and Land Registry documents to the property which contains all the documents relating to the legal title of the property. A copy of the final contract is held by each solicitor.
Mortgages
Most people go to a lender, usually a bank or a building society, to borrow money to buy a property. The mortgage is usually created by a charge against the property title by deed (legal document) i.e. the property is given as security for the money borrowed. The mortgage deed sets out the rights of the lender and the borrower.
The main right of the borrower is to redeem the mortgage by repaying the loan and any outstanding interest. The main right of the lender is to have the loan repaid by the agreed date and to have interest paid on any outstanding debt. If a borrower gets into difficulty, the lender may re-possess the property and sell it to recover the debt.
Surveyors and Valuers
A survey or valuer will inspect the property to identify any defects and report on its condition. They will make recommendations about repairs and give an opinion of value. A valuation is usually undertaken on behalf of the lender and reports are brief. Where the amount borrowed is less than half the value of the property, a lender may not require a report.
A buyer may request an independent survey which is more comprehensive. A budget survey, known as a condition report and Homebuyer Report, can be carried out. It is more detailed than the mortgage valuation but less so than an independent building survey. These reports are important to the success of the sale and may result in the surveyor or valuer asking for further reports to be obtained. The outcome of which may be used for further negotiation.
EPCs and Possible Future Reforms
An EPC (energy performance certificate) must be made available when a property is being sold and be shown on any promotional material.
Various issues in the house buying process have been identified e.g. gazumping, gazundering, and a high fall through rate between offer and exchange. A considerable number of ideas continue to be debated to improve the process.
