Buying a House in England
How to Buy Real Estate in England
Conveyancing
Conveyancing is the legal process of transferring ownership from seller to buyer. It is conducted by a lawyer (solicitor) or licensed conveyancer.
Most High Street solicitors should be able to carry out this work, but quality of service can vary enormously. Get quotes from several, including details of what they will do fro their fee. As always, personal recommendation is a useful guide.
Many conveyancers work on a fixed fee plus costs of the various "searches" they undertake.
Searches will invariably include a local authority search, which will reveal if any building works are planned that might affect the property concerned. Other searches may be requested as necessary according to the type of property and location.
At some point in the conveyancing process you will receive a report from your lawyer, been completed by the seller, which details all fixtures and fittings that are being included in the purchase (and those which are not) as well as other important information about the property. This form will eventually form part of the contract of sale, so check it carefully.
It helps to choose a local conveyancer so you can call into their office frequently in the event things do not move as quickly as you would like. One disadvantage of the fixed fee system is that lawyers may be inclined to do the bare minimum (since they get paid no more for extras). Keep hassling them until completion is reached.
Once the inspection, searches etc have been completed satisfactorily a draft contract will be issued to buyer and seller formally stating details of the sale. Buyer and seller both sigh identical copies of the same document and return these to their respective lawyers. The lawyers then agree to “exchange contracts”. A deposit (usually 10%) is also payable. It is only at this stage that the completion date will be fixed! It is also only at exchange of contracts that buyer and seller pass the point of no return, or at least leave themselves liable to legal action should they attempt to back out of the deal.
Buying at Auction
Buying at auction can be a means of achieving a quick purchase, and also getting a bargain to boot.
A successful bid at auction constitutes a contract to purchase with no going back by either side, so it is essential to carry out any inspections / legal searches etc ahead of the auction itself. This means of course that unsuccessful bidders will probably have spent significant time and money for no purpose.
Take time to peruse the list of properties coming up for auction, these are published by auctioneers and estate agents or see the Web sites listed below. Make arrangements to view those that seem most likely, then proceed to get an inspection and legal checks done on those you want to bid for.
Tip: visit a few auctions beforehand for a dry run before bidding for a property just to see how things work.
It’s possible that the seller may just want a quick sale, but beware that it’s most often problem properties that end up at auction. These may include re-possessions that have been trashed by evicted former owners, properties in very poor states of repair etc. Be sure to do your homework, and if you intend to bid on a property set a maximum figure to which you will go – and stick to it!
See http://www.propertyauctions.com/,
http://www.auctionpropertyforsale.co.uk/,
http://www.ukauctionlist.com/.
Costs of Purchase
The costs of purchase include the following:
- Stamp Duty (tax):
for properties up to £125,000, stamp duty = 0%;
for properties over £125,000 and up to to £250,000, stamp duty = 1%;
for properties over £250,000 to £500,000, stamp duty = 3%;
for properties over £500,000; stamp duty = 4%.
Bizarrely the rate quoted is payable on the ENTIRE purchase price, eg a house priced £251,000 is liable for £7,530 stamp duty, whereas one at £250,000 is liable only for £2,500. It follows that it is very well worth negotiating a reduction to take a property just below a stamp duty threshold. - legal fees - generally consisting of lawyer's fee plus those of any searches carried out
- land registry fees
- valuation/inspection fees
- mortgage "arrangement" fees (essentially points, an up-front payment in return for better rates)