Frequently
Asked Questions
How
long will it take?
Why are legal costs so
high?
Why does it take so long?
How long does it
take to get a mortgage?
Do I really need life insurance?
What is an endowment
life policy?
Can I do anything
to speed things up?
Can we
exchange and complete on the same day?
Can I do my own conveyancing?
What is a Licensed conveyancer?
Why use a Licensed conveyancer?
Are there
any advantages to using a solicitor?
Do I still
need a solicitor if I use a conveyancer?
Will
I have any problems if I buy or sell without an estate agent?
What fixtures
and fitting can I take?
Do I really
need to arrange a survey?
What is a mortgage
guarantee premium?
Do I really need all
these searches?
Can I do my own search?
How
long will it take?
This
is a bit like how long is a piece of string but government statistics
show that the average time to reach exchange
of contracts where no chain
is involved is 4-6 weeks, but can be a great deal longer if
there is a chain. Even a short chain can add 2-3 weeks
to this time. If there is no chain and no mortgage is
required the whole procedure may be completed in a few days.
Why
are legal costs so high?
Most
of the expenses incurred in moving house are not in fact legal
costs. The biggest expense in buying a property is usually
stamp duty which is a government tax. On the sale of a
property the biggest expense is estate agents fees. The
conveyancer will have to pay these expenses on your behalf but
gets no benefit from this.
As
far as your conveyancer's costs are concerned these are much
less than they used to be. Forty years ago a typical solicitors
fees on the purchase of a property would be one or two per cent
of the purchase price (work that out if you dare!) Competition
has greatly reduced prices and unfortunately standards have
also been reduced. At today's prices conveyancers are
frequently pressurised to cut corners and the standard of service
provided by cut price conveyancers
leaves a lot to be desired.
Why
does it take so long?
If
a buyer does not require a mortgage and is willing to proceed
without a survey, if the title deeds are with the seller's conveyancers
and if the buyer is prepared to pay extra for a personal search,
then the legal formalities can be carried out in a day or two
(provided no problems are encountered), and occasionally this
does happen. However, in practice, most people require
a mortgage, the seller's conveyancers will need to apply to
the lender for the title deeds, and a proper search is normally
considered essential. Each conveyancing transaction involves
a large number of firms and individuals who will all need to
correspond with each other, and if any one of these creates
a delay then inevitably this will have a knock-on effect.
In
approximately 90% of transactions the legal formalities are
completed before the mortgage offer is made. If the chain
is a long one then it will almost certainly be held up until
the last person gets his or her mortgage offer.
How
long does it take to get a mortgage?
Estimates
of time scale by the lender or broker are always optimistic
and should be ignored. You may be told that you will receive
your mortgage offer in 7-10 days. This is unrealistic
since references will normally have to be taken up and a survey
carried out, and in practice these will nearly always take longer
than this. Letters requesting references may go astray
or the person who needs to reply is on holiday, etc. Surveys
frequently discover faults which require a specialist report
and this delays matters further.
Do
I really need life insurance?
Some
lenders or brokers will insist that you take out life insurance
to the value of the mortgage. If there are two of you
this is a good idea, but if you are single then it is a waste
of money and should be avoided. If it is a condition of
the mortgage then go elsewhere, as the majority of lenders will
not insist that you take out life insurance. Large amounts
of commission are paid out when a new policy is taken out and
this is a huge incentive for bad advice. Be especially
wary if you are sold an endowment policy with even larger commissions.
Very few reputable lenders or brokers are now recommending endowment
policies.
What
is an endowment life policy?
An
endowment policy is a life insurance policy with a savings element
and hence is much more expensive than a straight life policy.
Now largely discredited since they do not guarantee to pay out
the sum insured at the end of the term.
Can
I do anything to speed things up?
In
most cases there is little point in trying to speed things up
since you will still be waiting for someone else in the chain.
However, if you are a first time buyer buying a repossessed
property for example, then you may be in a position to move
more quickly than usual. If you regularly chase your lender
to ensure that they are not waiting for references etc., you
may get your mortgage offer through more quickly. Some
lenders are much quicker than others.
We
can arrange a personal search which would be carried out by
a specialist agency, but this is expensive and some lenders
will not accept this kind of search or will insist on the usual
search being carried out as well. Most local authorities
only take one to two weeks and it is rare to have to wait
for a search before exchange of contracts can take place.
With
regard to the time between exchange and completion this can
safely be reduced to ten days if necessary, provided there are
no complications such as the need for a further inspection by
the lender after certain work has been carried out.
Can
we exchange and complete on the same day?
Yes,
but it is not usually a good idea as any party in the chain
can withdraw from the transaction at any time and for any reason,
even on the anticipated completion day, and if you have made
all your moving arrangements this can be fairly disastrous!
However it may be advantageous if there is no chain and a last
minute change in moving date is not too serious, e.g.. if the
property is empty and you do not need to book removals.
Can
I do my own conveyancing?
Yes,
but the lender will still appoint a conveyancer to represent
them and the saving is not worth the aggravation. It should
never be contemplated if you are buying a leasehold property.
You will also find problems in dealing with the other lawyers
who cannot accept your undertakings to send money or title deeds.
What
is a Licensed conveyancer?
In
1985 the Government passed a law to end solicitors' monopoly
in conveyancing. The profession of Licensed Conveyancers
was created and rules drawn up to ensure that all members of
this profession conform to the highest standards of care and
efficiency. A statutory body, The Council for Licensed
Conveyancers, was created and rules laid down to protect the
public. All Licensed Conveyancers must have indemnity
insurance to protect the public against any errors or omissions
and they must contribute to a compensation fund to ensure that
funds are available in the event of any default.
A Licensed Conveyancer will have many years of experience in
conveyancing and will have passed examinations at or above law
degree standard.
Why
use a Licensed Conveyancer?
A
solicitor will usually practise in many areas of law such as
divorce, bankruptcy, criminal or company law, and may in fact
carry out very little conveyancing. A Licensed Conveyancer
is an expert in property law, specialising in conveyancing,
who will always be up-to-date with the latest changes in the
law.
Another
advantage is that your conveyancer will nearly always be available
if you need to contact him or her, and may therefore be
able to expedite the overall process of conveyancing.
They will not be "in court" at a vital time, just when
your buyer or seller has issued an ultimatum to exchange
contracts by the end of the working day.
Are
there any advantages to using a solicitor?
Not
unless you like to talk about "your solicitor" in a loud voice
in the pub. If so please do not use us!
Do
I still need a solicitor if I use a conveyancer?
Does
a brain surgeon need a general practitioner?
Will
I have any problems if I buy or sell without an estate agent?
The
agents main function is to introduce buyer to seller and they
will normally make little useful contribution after this.
Buyers and sellers may be prevented from talking to each other
which can give rise to problems, but in some situations the
agent can mediate and avoid a nasty confrontation!
What
fixtures and fitting can I take?
You
can take anything you like provided you tell your buyer before
exchange of contracts.
However, your buyer will not be very pleased if you have agreed
a price and you then inform him that you intend to take the
central heating with you! As a general rule you can take
items which are not fitted or fixed to the property (chattels)
but since it can be difficult to decide which items are chattels
(e.g.. carpets) the seller will usually complete a fixtures
and fittings list.
Do
I really need to arrange a survey?
We
regard a survey as essential. You cannot rely upon the
lender's valuation, which is not a survey, just a guide to the
market price. A home buyer's report is the absolute minimum
you should consider, but a full structural survey is much better.
What
is a mortgage guarantee premium?
If
you are getting a high percentage mortgage (usually over 75%)
the lender will take out an insurance policy which covers them
against the possibility of repossessing the property and being
unable to recover their entire loan. They will claim the
shortfall from the insurance company. However the insurance
company will then be given the authority to recover this from
you! The icing on the cake is that you have to pay for
this insurance policy which can be over a thousand pounds!
Not surprisingly this is not very popular and some lenders are
now paying for this themselves. If you have been asked
to pay this then shop around!
Also
known as high loan to value fee, and various other names.
Do
I really need all these searches?
If
you are getting a mortgage the lender will insist on most searches
being carried out, but if you are a cash buyer you can avoid
nearly all of them, but in most situations this is likely to
be a false economy. The cost of a search is very small
compared to the possible consequences of an adverse search entry.
Can
I do my own search?
If
you are a cash buyer, yes, but not advisable. Even if
you are experienced in examining council records it is still
not a good idea, as the council will not be responsible for
any mistakes. You can pay for a personal search by an
experienced agent who will have indemnity insurance, but this
may cost more than a normal search. This may be essential
if time is crucial, but not all lenders will accept an agency
search. It is rare for a search to delay exchange of contracts.
If
you have any further questions on any aspect of moving house
or would like a quotation please send us an email.
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