BUYING A PROPERTY
What is the process of buying?
This document contains a useful diagram of the buying and selling process.
Do I need searches?
If you are buying a house with the aid of a mortgage, then the mortgage company will always insist that searches are made as you will be using their funds to buy.
If you are a cash buyer you can choose whether to have searches carried out but we always recommend that searches are undertaken to avoid any future problems when you come to sell.
More information on Searches
What is an Energy Performance Certificate (EPC)?
This is a certified assessment of how energy efficient the property is. The assessment must be carried out by a qualified Domestic Energy Assessor (DEA) or Home Inspector (HI). The report will rate for energy efficiency different aspects of the property, such as the walls, insulation, windows, heating and lighting on an energy rating scale from A to G, similar to the system used on fridges and electrical appliances. The DEA or HI will then issue the EPC.
The energy rating is a guide only and not necessarily accurate for the specific property. This is because the assessor has to make certain assumptions when entering data onto the software, eg age of house, year of any extension, whether the windows are of average size for the period of house etc.
The assessment contains a recommendation report on how to improve the energy efficiency of the property, for example by adding further insulation.
An EPC is valid for 10 years from the date it is issued however if you carry out any improvements to your property which may improve its energy efficiency, eg. replace the boiler or windows or add loft insulation to it, then you may want to consider obtaining a new EPC to demonstrate the improved energy rating.
An Energy Performance Certificate must be provided whenever a residential property is sold or let in England & Wales (including private sales and lettings where no estate agents are involved). In the case of a sale, the EPC must be provided to the buyer prior to exchange of contracts. When a property is let the tenant must be provided with a copy of the EPC prior to the tenancy agreement commencing.
If an estate agent is to market your property for sale then the energy rating information must also be included on the sale particulars.
Estate agents will usually arrange the EPC when they are instructed to market your property. If you are not appointing agents or would prefer to arrange the EPC for the property yourself then please let us know and we can provide details of local DEAs who will be able to arrange carry out the necessary inspection and produce the report for you.
For more information, go to http://epc.direct.gov.uk/index.html
How much deposit will I have to pay?
At exchange of contracts 10% of the purchase price becomes due to the seller but this can be varied by agreement. Should completion not take place, however, the full 10% remains due at all times. If you are buying and selling it is usual to use the deposit received from the sale as the deposit for the purchase.
When do I pay the deposit?
We ask for the money at the time we send to you our report about your purchase together with all the documents to sign. This is usually near the middle of the transaction once we have received all of the information we require about the property.
As this stage we will ask you for the full balance that we require for your purchase, including the deposit. This way we have all funds in hand and will be able to exchange contracts and complete as soon as possible.
What do I need to do on completion?
On the day of completion you do not need to come to our office. We will arrange to send the purchase monies to the seller's solicitors and once they have received this you will then be able to pick up the keys from the estate agent or the sellers themselves. This usually happens in early or mid afternoon. Please note that Fridays are particularly busy and you may not be able to pick up the keys until late in the afternoon if you complete on this day.
More information on Completion
What happens after completion?
After completion we will pay the Stamp Duty Land Tax (where applicable) to the Inland Revenue and then deal with the registration of your title at the Land Registry. This process takes about two months to finalise and we will let you know when it has taken place.
When do I start paying my mortgage payments?
Details of when to start paying your mortgage are included in your mortgage offer but if you are unsure, please contact your lender directly to arrange your payments. We are not informed of these arrangements by your lender.
What is Stamp Duty Land Tax?
This is a tax payable to HM Revenue & Customs which is based on a percentage of the purchase price paid for the property.
How much Stamp Duty Land Tax will I have to pay?
The Government announced on the 2 September 2008 that from the 3 September 2008 a buyer will not have to pay Stamp Duty Land Tax if the purchase price of the property does not exceed £175,000.00. The Government have said that this will only be for a period of one year from the 3 September 2008. The current rates are set out below: -
| Up to £175,000.00 | No tax payable |
| From £175,0001.00 to £250,000.00 - Unless first time buyer exemtpion applies - see below for further details | 1% |
| From £250,001.00 to £500,000.00 | 3% |
| Over £500,000.00 | 4% |
Until 24 March 2012 there is an exemption for the payment of SDLT for purchases made by first time buyers where the purchase price is up to £250,000.00. For qualifying purchases this means no SDLT will be paid on the transaction.
Those who qualify for the exemption must fall within HM Revenue & Customs’ definition of a first time buyer – this is that the purchaser must not have owned a residential property or a share of a residential property in England or Wales or anywhere else in the world
If more than one person is purchasing a property then to qualify for the exemption none of the buyers involved in the purchase can have owned a property or part of one in the previously.
First time buyers purchasing a property for £250,001.00 or more have to pay SDLT at the usual rates.
When does Stamp Duty Land Tax have to be paid?
This has to be paid within 30 days of completion taking place. If payment is not made within this timescale penalties will be charged. Charges start from an instant £100.00 penalty and then interest will be charged daily on top of that.
If you are having a mortgage we are under an obligation to your lender to make sure we have enough money to pay the Stamp Duty Land Tax on completion. For this reason we will always need to receive the funds to cover this payment before we exchange contracts.
What is the Land Registry and what do they do?
This is a government body which registers ownership of land in England and Wales. It keeps records of title documents to all registered land. The Land Registry is open to the public (click here to find out more about the Land Registry services).
Will there be a fee for registering the transfer of ownership and mortgage?
There is a fee payable to the Land Registry, the current rates can be found on the Land Registry website. We will inform you of the amount payable when we provide you with an estimate.
What happens to the title documents and EPC after the title has been registered?
When registration is complete we will send any documents that may be required by your mortgage lender to them. If your lender does not require the documents these can be sent to you or we can provide safe and secure storage for a small charge.
When do I need to hand in my notice to my landlord on the house I am renting?
It is entirely up to you when you hand your notice in but please bear in mind that there is no guarantee that completion will take place on a certain date until contracts have been exchanged and the completion date set down in the contract. We would therefore recommend that you do not hand in your notice until after exchange of contracts as you will then have a guaranteed date for completion. Should you decide to hand your notice in before this date you should ensure that you have alternative accommodation in case the completion date you want cannot be achieved.
