Why do I have to sign a fixed term sole contract?
The short answer is you don’t if we act for you. Traditionally estate agents have operated on the basis that they ask for a sole agency period of 12 or 16 weeks. This is clearly in the interest of the agent, not you. It is in your interest to be able to end a contract instantly if you are unhappy with the service you are receiving. We believe in the service we provide but feel you should always have the freedom to change your mind.
What are land searches and how long do they take?
A search is designed to protect the prospective buyer by providing information which may affect the property such as plans to build new roads, whether the highway fronting the property is public or privately owned, any planning permissions, enforcement notices, tree preservation notices or housing grants that have been claimed. Each search involves four departments at the council – housing and environmental health, town planning, statutory orders, and highways – and so takes some time to compile. Councils usually undertake to get the searches back within 2 to 3 weeks but we will be able to advise you if there is an expected delay.
How long will the legal process take?
If the vendor has already vacated the property and you don't require a mortgage, exchange of contracts and completion may only take a few days. If, however, you need a mortgage and the vendor is still in the property, exchange of contracts normally takes 4-6 weeks, then completion takes another 2-4 weeks -- so you're looking at around 6-10 weeks in total to complete the legal process.
What is Stamp Duty and will I have to pay it?
Stamp duty is a tax levied on the sale of property and is payable by the buyer at the point of completion. You, as the vendor, do not have to pay stamp duty on the sale of a property.
Can I sell my property with a tenant in situ?
Yes you can. If there is a tenancy agreement in place this can be transferred to the new owner as part of the sale with no disruption to the tenant. We have a register of prospective buyers who are particularly interested in buying property with tenants already in place.
Will you accompany all viewings?
We believe strongly that this constitutes an important part of the service that we provide and so we will, wherever possible, accompany all viewings. If you do not wish to be present for the viewing that is not a problem as long as we have a key for access.
When do I need to arrange building insurance?
You should arrange for building insurance to take effect on exchange of contracts, since you bear the risk of loss if the property is damaged after this date -- even if the vendor remains in the property. (If you need a mortgage, your lender may take care of this for you -- but always check well in advance of the date contracts are exchanged.) The insurance policy should cover the estimated cost of re-building the property if it is completely destroyed (e.g., in a fire), not the current market value.
What is an indemnity policy and do I need one?
An indemnity policy is a type of insurance taken out to deal with a defect in the title of the property being sold for example, a restrictive covenant or a missing document of title. As a way to complete the transaction, but also ensures you're protected, your solicitor may suggest the vendor take out an indemnity policy, which will pay out if the defect becomes a problem. All such policies require that their existence not be disclosed to third parties.
What happens at exchange of contracts?
At this stage, the purchase and sale become legally binding. Once you have authorised your solicitor to exchange contracts, they will conduct a short telephone conversation with the other party's solicitor, agree a completion date and pay your deposit. If you withdraw from the purchase after exchange, you will lose your deposit and probably incur other financial penalties. Note also that the risk of loss in the property passes to you after exchange -- thus, you should arrange building insurance well beforehand to cover against this risk.
Can I access the property before completion?
Sometimes if the vendor has already vacated the property you may be allowed access before completion. Usually this is permitted where work or repairs need to be carried out.
Is there anything I can do to decrease my liability for stamp duty?
Possibly. If the purchase price is just above a stamp duty threshold (i.e., £125,000, £250,000, £500,000, or £1million from 6 April 2011), and includes fixtures and fittings such as carpets, curtains, a cooker, a fridge, or a freezer, you may legitimately apportion part of the purchase price towards these items. If this takes the purchase price for the building and land below the stamp duty threshold you'll decrease (or eliminate) your liability for stamp duty. Be warned, however: HM Revenue & Customs regularly checks these transactions and will challenge any that arouse suspicion.
Does the vendor have to give me a Home Information Pack?
No. On 21 May 2010, the coalition government scrapped Home Information Packs. The only obligation that the vendor has is to provide an Energy Performance Certificate (this is required by EU law and rates a home's energy efficiency)
Do I need a survey?
If you need a mortgage, your lender will ask you to pay for a mortgage valuation report (MVR) to confirm that the property is worth the amount that you have asked to borrow. You cannot rely on this report, however, because it involves only a limited inspection of the property and it will only identify obvious defects that materially affect the value of the property. The cost of a basic mortgage valuation costs about £100-300, depending on the size and cost of the property.
For added protection, most buyers pay for a more comprehensive survey to be done -- either a homebuyer's report or a full structural survey. A home buyer's report costs about £300 to £600, depending on the price of the house. It's less comprehensive than a full structural survey, but usually adequate for a conventional property (i.e., constructed using standard materials and with few alterations or extensions) under 75 years old. For properties older than this, a full structural survey is widely recommended. It is a lot more detailed, however, and can cost twice as much as the home buyer's report.
Most buyers ask their mortgage lender to arrange for the surveyor who does the MVR to do the homebuyer's report or full structural survey at the same time. This is generally the easiest and cheapest way to commission a report.