Whether you are buying or selling a property it is safe to say that the jargon used and the events in the process can be mindboggling. When you take into consideration that the average buyer or seller only moves once every 7-8 years its no wonder this can be one of the most stressful things you do in your lifetime.

We hope this guide on what happens once a sale is agreed will help you along this journey.

You’ve accepted an offer, now what?

So, a buyer has made an offer on a property, the seller agrees to accept that offer and a sale is agreed. Your estate agent will now say that the property is “under offer” and will tell you that they will instruct your solicitor by sending out the memorandum of sale.  All sounds good!  But what does this actually mean, and what happens next?

Once an estate agent receives an offer on a property which their homeowner has decided to accept, the first steps should be to qualify that buyer.  This means that we will now look at the offer and qualify it.

If it is a pure cash (in the bank) offer, we will ask the buyer to show us proof of funds.  There are two reasons for this, one is to show us that the buyer can literally put his money where his mouth is and show us they have the money in a bank or savings account for example, to buy the property.  The second reason we need to see proof of funds is to satisfy the Anti Money Laundering rules and regulations.  These are the due diligence rules that all estate agents are bound by law to carry out.

If the buyer is a mortgage buyer (usually part cash part mortgage) we will again ask to see proof of the cash element, but we will also need to see a “mortgage agreement in principal” document (also known as an API or MAIP) which can be obtained by your lender or mortgage broker.  This shows to us that the buyer can borrow the amount they need to purchase the property.  It is always a very good idea to have an API in place before you offer on a property.  We can help with this if you do not already have a mortgage arranged, please talk to us about this.

If the offer is cash from the sale of a property, or subject to the sale of a property, we will speak to the estate agent selling that house and gather all the chain details, we will speak to all the estate agents in the chain and ensure that the chain is a complete chain and that all parties are able to move forward to buy. 

We also, as part of the AML rules need to see proof of ID for all buyers and conduct our due diligence to ensure all parties buying are who they say they are.  (This is already done on our sellers before the property is put on the market with us).

Once all the paperwork is in from the buyer and we are satisfied that they can proceed with the purchase and afford the property, we will then send out a memorandum of sale, or notification of sale letter to all parties (that is the buyer, seller and both parties’ solicitors) and that will start the sales process.

Solicitor’s process

Once your solicitors receive this letter, they will then be in touch with you to confirm your instructions to act on your behalf with the sale/purchase. (If you are able to instruct a solicitor when you first put your property on the market, rather than waiting until you have found a buyer, this could save you weeks on the sales process.) They will send you out some forms to fill in and will carry out their own due diligence on your proof of funds, proof of ID, etc.  Every single party in this process is responsible for carrying this out themselves, we can not rely on others to do this for us.  So, while this may seem tedious, it is a requirement by law of all of us, so please bear with your solicitor on this.

Once all solicitors receive their forms back, the sellers’ solicitors will start the “conveyancing” process and prepare the contract pack and send out the “Draft Contract” to the buyer’s solicitor.

The buyer’s solicitor will ask for the buyer to pay money to their account so that they are able to request the “searches” on the property you are buying as soon as they receive the draft contract in from the seller’s solicitor.

They may also advise the buyer to instruct a surveyor to do a survey on the property so that they know all is well with the house they are proposing to buy.  It is up to buyers if they wish to have a survey done or not.  Sometimes people don’t do this as they may be a builder or know a good builder who will go with them to have a look over the property.  Sometimes they will have a survey done as part of their mortgage application.  Please talk to us about this as we can help you with access to a local surveyor who will be happy to discuss your needs and advise on the best course of action.

Searches, what are these and what are they for. 

Searches are what all buyers’ solicitors will do on a property to ensure that all is well with the property and surrounding areas.  They are normally, but not always the following:

Local authority searches

The Local Authority Searches are the most important searches your solicitor will make, they look at all the info the local authority holds involving the property you are buying.  This includes prospective planning permission or restrictions and will also show who is responsible for maintaining roads and paths adjoining the property.  They will advise you of the cost of this.

Land Registry searches

Solicitors will need to prove that the seller of the property you are buying is the legal owner of that property.  They check the title register and title plan at Land Registry to do this.  Again, they will discuss the costs of this with you and they are legally required for the sale to go ahead.

Environmental searches

The Environmental search is really important and used to establish whether a property is built on or near any contaminated land or water, or an old landfill site.  If you need a mortgage your lender may insist that this search is carried out before they will issue you with a mortgage.  The reason this type of search is so important to have is to safeguard you against issues in the future when you are selling, if the property had been built on or near an old industrial site, there could be a risk of toxic substances remaining in the ground.  If this is not uncovered before you take over ownership of the property there could well be issues in selling on, or you could have a health hazard on your hands.  This search should also show you if the property is at risk of flooding.

Water authority searches

This is another essential search and will establish where your water comes from and if there are any public drains on the property.  It is important to know this, especially if you plan on doing any development or extension work on the property once you own it.

Location specific searches

These can include a mining search, depending on the area you are buying in, the solicitors may advise on doing one of these.  They will discuss this with you and advise you on what they think is the best thing to do.  These can show up underground mines for example which could run the risk of the ground being unstable and at risk of subsidence.  For this reason it is advisable, although not essential, to use solicitors local to the area you are buying in.

Chancel repair search

This is one that crops up from time to time in this area.  This search will establish whether a property has a liability attached to it for the cost of repairs to a parish church.  In the Middle Ages, property owners, rather than the monasteries became responsible for repairing church chancels.  There was a law change in October 2013 which means that the church must now establish and lodge liability with the Land Registry.  However, in some cases the church can still insist a property owner is liable for repairs, even if the liability has not been registered.  A chancel repair search does not cost that much and can save you thousands!  If it is found that a property has this liability against it your solicitor will advise you take out an indemnity or Chancel repair insurance policy to protect you.

All the searches will take around 2 to 3 weeks to come back, depending on the local authority and staffing levels (especially through the pandemic).  Once the searches are back, these may prompt the solicitors to raise enquiries with the sellers’ solicitors based on their findings from the results.  There are ways to fast track searches if speed is of the essence and your solicitors can advise you about this and the extra costs involved.

What happens in the background?

While the searches are underway, the buyers’ solicitors will be looking through the contract pack and asking questions (also known as “raising enquiries”) with the sellers solicitors. 

It is important that the sellers make sure that they reply to all questions that the buyers solicitors send over as fast as possible, and that these are turned around and sent back to your solicitors asap.  There may be a lot of questions asked, and these can seem annoying and frustrating, and in some cases seem pointless or irrelevant but, it is still very important to answer them all as any missed questions will cause unnecessary delays in what is a lengthy process already.  All solicitors are there to protect their clients so, while some questions seem irrelevant the solicitors are only safeguarding their clients best interests and it’s important to keep that in mind.

Surveys and Mortgage Valuations

If you need a mortgage, the mortgage valuer will call us to gain access to the property and book an appointment to visit the property to carry this out. If you want or need a survey, it is up to you to arrange this with a surveyor and ask them to call us to arrange access and book the appointment.

They will then write up their report and send this back to their client (for a mortgage valuer this will go back to the lender who will then report to the buyer, or mortgage broker). When you get the results of a survey and have read through the report, you may want to speak to us again to run through the results.  We read many survey reports each month and can help you understand them. 

If a mortgage is needed and the mortgage valuer has sent his report back to the mortgage company, and providing there are no issues, it is at this point the mortgage company will issue the buyer with a mortgage (up until this point it has all just been in principal, meaning that in principal you can afford the repayments on the amount you want to borrow and in principal they are happy to lend on a property. It is only when they have had the valuer’s findings that they will be ready to lend) and send the “mortgage offer” to the buyers solicitor. 

Are we nearly there yet?

At this point all the searches should be back and the solicitors should have asked the queries they want to satisfy them that the property being bought is as it should be.  They will now be ready to “report to their client”.  This means they will send the buyer all the paperwork and their findings and ask the buyer to confirm that they are happy with all this and happy to proceed forward to exchange of contracts.

Booking removals

You can also now start to look at removal companies and provisionally book one, you may do this sooner if you live somewhere where removal companies are in high demand or short supply, but it is advisable not to fully confirm or pay any deposits until exchange of contracts has taken place, or you have been advised it is safe to do so by your solicitor, as anything can happen and dates can change, especially given we are still living with a pandemic. It is worth remembering that it is your solicitor who will be able to give you the most accurate timescales as it is they who are doing the hard work at this point, so please ensure you keep in touch with them and ask them the question before you arrange your removals.

Signing the contracts

At this point both parties will receive a copy of the contract and the transfer form to sign and send back to their solicitors – again it is important this is done as soon as they are received and sent back promptly.

Once solicitors on both sides have received the contract paperwork back all signed they will then discuss with their clients dates for exchange and completion.

Exchange of Contracts

What this means is the property will exchange first and the completion date will be set.  “Exchange of contracts” means the contracts have been signed and the completion date has been set and the 10% non-refundable deposit is paid by the buyer on the house they are buying, this 10% is 10% of the agreed purchase price.  It is only at this point that this transaction becomes a legally binding agreement whereby the buyer agrees to buy, and the seller agrees to sell to each other.  Up until this point there is nothing stopping anyone pulling out of the purchase and there is also nothing stopping a seller from accepting another offer from someone else (known as gazumping).  It is usually at the point of exchange that you confirm your booking with your removal company and pay them a deposit.

Also think about money tied up in investments, if you need to give notice to release these funds make sure you do so with ample times, otherwise this can cause a nightmare on completion day!

Keys

Typically, properties seem to exchange on a Friday one week, and complete the following Friday.  The “completion day” is the date you actually all move home.  It is the date that the final money for the purchase is paid, this is done via the solicitors, and they ask you deposit the money into their account the night before, so it is there safe and ready to prevent delays on completion day.  If you need a mortgage, your solicitor will have requested the lender draws down the money and this typically takes 5 working days to do.

On completion day the solicitors will need to speak to you to confirm you are happy to complete, so make sure you are available to take that call otherwise it will delay things!  They will then talk to each other to transfer the money over and complete the purchase transaction.  Once the money has been safely received by the seller’s solicitor, they will then call their client to update them, and they will also call us the estate agent and advise us that we can now “release the keys” on the property – we can not do this until we have had this call.

Then we can arrange to meet with the new homeowner to deliver the keys to their new home.

So how long does it all take?

All in all, this whole process can take anything from 8 to 18 weeks. UK wide this is currently taking on average 19 weeks, however we are managing to get our sales through in an average of 12 weeks. We have had some go through in 4 weeks.  This is down to the good working relationship we have with the solicitors we work with and that we work with Prime Progression who help with the sales progression and talk to other agents in the chain to keep things moving forward.  It can not be stressed enough the importance of having an estate agent or a dedicated sales progressor, who has good experience in progressing sales forward to help ensure sales move at a realistic timescale.  It is also very important to manage everyone’s expectations which is another thing we are very good at doing.

So, there you have it, an in-depth look at the sales process.  Hopefully, this helps you when you make your next move.