We are pleased to introduce a guest blog article from the expert legal advisor Bolt Burden. This blog will set out the 9 simple steps you need to be aware of when going through the legal process to buy your first home.
Firstly, you will need to enter into a reservation agreement with the developer and pay a reservation fee.
Secondly, you will need to instruct a solicitor who will draft a contract and will order searches on your behalf regarding the property. Alongside this they will raise any legal enquiries and approve the contract and terms of the lease.
Whilst this is happening you would have simultaneously applied
for your mortgage and have an offer formally issued.
Thirdly, when all terms have been agreed and the mortgage offer received, you are then ready to exchange contracts.
Finally, you will complete on the property and the keys will be released to you ready to move in!
For a further in depth step-by-step process please see below:
THE LEGAL PROCESS: A STEP-BY-STEP GUIDE TO GET YOU THE KEYS TO YOUR FIRST HOME
RESERVATION
To secure your new home, you will enter into a reservation agreement with the developer and pay a reservation fee to take the property off the market.
The terms of the agreed sale are detailed here, and you will be given a reservation period to progress the sale and reach ‘Exchange of Contracts’.
INSTRUCT A SOLICITOR
CONTRACTS ARE ISSUED
The draft contract will be prepared by the developer’s solicitor and will be sent to your solicitor together with a comprehensive legal pack on the development. This is to provide you and your solicitor with as much information about the property as possible including on matters such as planning consents and who the new home warranty provider will be.
SEARCHES ARE ORDERED
Your solicitor will take your instructions here to order your searches.
A search is carried out with the local authority for the area in which the property is situated, ‘the Local Search’. It reveals details of such matters as planning permissions and planning agreements on the property; Community Infrastructure Levy (CILs) which may have to be repaid; road schemes in the immediate vicinity and such matters as compulsory purchase orders and notices under the Public Heath Act.
In most cases, your solicitor may need to carry out some additional searches prior to exchange of contracts. Normal searches that are carried out are drainage, environmental and chancel tax liability searches.
APPROVAL OF THE DRAFT CONTRACT / LEASE
This is the task of your solicitor. They will check the draft contract and lease and will request any changes which are considered to be necessary and then returns this to the developer’s solicitors to agree the amendments.
LEGAL ENQUIRIES
Your solicitor will also raise legal enquiries with the developer’s solicitors based on the legal pack provided. This process may take a few weeks to finalise depending on the nature of the enquiries and how quickly and easily they can be responded to by the Developer’s solicitor.
YOUR MORTGAGE OFFER
Whilst your solicitor is progressing the legal process, you will simultaneously have applied for your mortgage offer and your solicitor will need for this to be issued formally before you can reach the next stage.
The mortgage offer will contain some special conditions and your solicitor must ensure prior to exchange of contracts that these can all be complied with.
EXCHANGE OF CONTRACTS
When all the terms have been agreed; additional enquiries answered satisfactorily; a mortgage offer received and satisfactory search have been obtained, you are at last ready to exchange contracts!
Your solicitor will send you the contract for signature together with the legal report about the property you are buying. At this stage you should raise any final queries you may have about the property before returning the signed contract and deposit to your solicitor in readiness for exchange. The deposit is usually 10% of the purchase price.
Exchange of contracts takes place over the telephone. The solicitors for the buyer and the developer complete the necessary details in their respective parts of the contract including the completion date and they are “exchanged”
COMPLETION
At this stage the contract which has been exchanged is formally “completed”. Your solicitor sends the balance required to complete to the developer solicitor by electronic bank transfer. Once this is received by the developer’s solicitors the keys to the property are released to the you.
All you now have to do is move in!
For any further advise or help with home-buying legal matters please contact Amie Mackay at AmieMackay@boltburdon.co.uk
