1. Consider Your Budget
Initially before you consider buying a property you should first consider your budget. If you are a homeowner, this involves evaluating the value of your equity in your current home. In addition you should calculate the funds at your disposal either on deposit or cash. Subsequently you will contact your bank or building society and establish the level of loan for which you will qualify.
2. Contact Your Solicitor
Then, you should contact your solicitor and get a quote of the costs involved in purchasing. The information sheet should then be completed to instruct your solicitor to act. They will open a file and commence the transaction.
3. Loan Initiation
Once you have decided to proceed with the purchase of the house, you should look for loan approval, at least in principle.
4. Deposit Payment
The next step is to pay a booking deposit to the estate agent. This deposit is refundable and is usually up to 2% of the purchase price. When the estate agent receives the booking deposit, they issue a sale details document to all parties.
5. Sale Details
The estate agent will then prepare the sale details document and this will be issued to you, your solicitor and the builder’s solicitor. The sale details will outline the price, condition of sale, an estimation of the closing date and the names and address of all parties.
6. Issuing the Contracts
Once the builder’s solicitors receive the sales details from the estate agent, they will issue the contracts. The contracts are then sent to your solicitor. They are sent in duplicate with a copy of the building agreement and title deeds.
7. Formal Approval of Your Loan
At this point you will need to obtain formal approval of your loan in writing. This will be issued on the basis of the price of the house and the information provided by you. Normally a letter of offer setting out the main details of the loan is issued to you, and the loan pack comprising mortgage documentation, acceptance of letter of offer and assignment etc., is issued to your solicitor.
8. Signing the Contracts
After your solicitor has checked over the contracts, you will be required to sign the contracts in duplicate.
9. Paying Your Deposit or Stage Payment
The contract deposit is 10% of the purchase price minus the booking deposit already paid. In some cases, you may not have to pay a full 10% but instead you make a stage payment, which is a reduced payment. The estate agent will have specified the amount of this stage payment at the outset.
10. Sign Loan Pack
Your solicitor checks the loan pack and discusses the key terms with you. Various documents are then signed and completed to enable the bank/building society to proceed.
11. Exchanging Contracts
Your solicitor examines the title to the property to ensure it is correct. Then your solicitor will return the contracts and building agreements in duplicate, signed by you together with the contract deposit/stage payment to the builder’s solicitor. The builder’s solicitor returns one copy of the contract and building agreement. This creates a binding agreement between all parties, subject to the terms and conditions contained in the contract. After the contracts have been exchanged, your solicitor returns the loan acceptance and ancillary documents to your bank/building society.
12. Completion Notice
The builder will send you and your solicitor a “completion notice” when the house is finished. This is an important document and sets out the time period within which you must finalise completion. When the completion notice is received, you must then complete your “snag list” for the house. This derived from a formal inspection of the property by you or your agent to establish any unfinished works in the house. One copy of the snag list is retained by you and the other is sent to the site foreman. After a few days you should contact the site foreman to check if all the items of the “snag list” have been completed. This process of contacting the site foreman should be repeated until all issues in the snag list have been completed. Once you have verified the completion of the snag list, you should inform your solicitor.
13. Closing Statement
At this point, a statement setting out the balance of purchase and costs will be prepared by your solicitor. This takes into account any extras or allowances agreed by you and the builder.
14. Loan Cheque
This is received in advance of the completion date.
15. Balance of Funds
These are delivered by you, by bank draft made payable to your solicitor in advance of the completion date. Normally the loan cheque and balance of funds are received the day before the completion date.
16. Completion & Keys
“Completion” refers to the formal completion of the purchase. This takes place at the builder’s solicitors office. You do not need to attend as your solicitor will represent you. Your solicitor checks the vendor’s title. When they receive good title, along with with fully signed documents, they hand over the balance of the purchase price. Keys are not handed over to your solicitor at that stage. Instead the site foreman is contacted by telephone following completion of the transaction and instructed to release the keys to you. Usually, you collect the keys from the site foreman
17. Sign Deed
After the sale is completed you must sign the purchase deed. This document is only handed over to your solicitor at the closing, and is not available for signature by you prior thereto. You must sign immediately following the closing as there are strict time limits for stamp duty.
18. Stamping/ Registration
After you have signed the purchase deed, your solicitor will proceed to stamp the purchase deed and mortgages and then register same in the Land Registry/Registry of Deeds. Registration can take months, if not years, depending on the county and type of property involved.
19. Registration Complete
At this stage you are registered as owner of the house in either the Land Registry or Registry of Deeds. Legal ownership to the property passes to you on completion of the purchase but registration may take a minimum of months or longer. This delay does not in any way undermine the fact that you are the legal and beneficial owner of the property. Indeed you can sell a property even though registration has not been finalised in the Land Registry or Registry of Deeds
20. Title Returned
On completion of registration, your solicitor returns your title deeds, to your bank/building society together with a certificate confirming that you have acquired a good marketable title. Usually, you will be notified that registration has completed and the title deeds have been returned. At this stage your solicitor closes off your file.
