Residential Property: FAQ's for First Time Buyers

Our Residential Property Team is fully aware that buying a home is one of the most exciting and important, yet potentially one of the most stressful, events in your life. We therefore work hard to make sure that every transaction is as stress free and efficient as possible. To help answer some of your initial questions about the process, we've put together some of our most frequently asked questions along with answers from our Residential Property Team.

When should I instruct a solicitor when buying?

Once the Estate Agent confirms your offer has been accepted or you have accepted an offer on your property.

What will you need from me once I instruct you?

Once you instruct us, we will need your full names, current address, purchase address and the Property sale price. You will then need to complete our onboarding process and provide your ID and proof/source of funding docs and pay your search monies.

What is the first stage of the conveyancing process?

We will receive paperwork about the Property, review such and raise questions, known as enquiries, with your seller’s solicitor. We also submit requests for the searches (Drainage & Water, Environmental, Local Authority). Once we receive replies to our enquiries we will then review.

How involved will I need to be in the process?

Once we have your initial details and identification, there may be a period where we don’t require much from you. During this time, we will be making enquiries and waiting for responses from the seller's solicitors. We will request searches and advise you on the results of these. We will also be waiting to receive your mortgage offer – once received, we will report to you on the terms of your mortgage offer if you have a lender for the purchase. Once we are happy all enquiries have been satisfied, we will write up what is called a Property Report explaining the individual elements of the Property you are purchasing and flag to you anything you need to be aware of, this will be sent to you with the contract and transfer for the Property. Once you are happy with everything, you will sign the contract and transfer for the Property, as well as our Property Report and confirm you are happy to proceed with the purchase.

What is exchange / completion?

Before you exchange

• We will ask you for your buildings insurance and 10% deposit monies and signed documents in order to proceed to exchange.
• On exchange, we agree a contractual date for completion which is legally binding on both you and the seller.

After exchange

• We will confirm to you that we have exchanged contracts on your behalf and provide you with a completion statement which confirms the balance outstanding to complete the purchase. This will show the total of our fees, stamp duty (if applicable), and purchase monies due after payment of the deposit.

On completion day

• On the day of completion, we receive your mortgage advance from your lender, send your purchase monies to your seller’s solicitor, and once they confirm receipt of the monies, they will confirm to us that completion has taken place and they will release the keys with the Estate Agent.
• At this point, we will confirm completion has taken place and you can collect the keys.
• We will pay any stamp duty due on the day of completion and submit an application for registration of you as the new owner of the Property.

How much Stamp Duty do I have to pay?

If you are a first time buyer, you will not have to pay stamp duty on the purchase of your first home up to the value of £425,000. After this 5% will apply to the £425,001 to £625,000 purchase price bracket.

When will I know when I will be able to move into the Property?

When we exchange on the contracts, this is when you and the seller become legally bound to the sale and the completion date is confirmed. Therefore, once we have exchanged, this is when you will know when you can move into the Property.

What is the difference between the actual deposit and the amount you are putting into the Property?

You will have an amount you are paying towards the Property, which bridges the mortgage amount you are receiving and the purchase price. This could be 10% of the Property’s value, or 50%, for example. While you may consider this your deposit, for conveyancing purposes, the deposit is the 10% of the purchase price which we require in our bank account to be able to exchange.

When do I need to secure my mortgage?

It is helpful to have a mortgage agreement in principle set up when you first are considering purchasing a Property. While you are going through the search process you will be able to confidently put an offer on a Property knowing you will be able to get the lending for this. Once you have had an offer accepted, you need to inform your Broker of this, and that you have instructed Leathes Prior as the firm of Solicitors to act on your behalf, in order that the lender can issue a formal mortgage offer.

I have a gifted deposit, what do I need to provide for this / when does it need to be gifted?

• We will need the contact details of the person(s) you are receiving the gifted deposit from.
• We will contact them to obtain their verification of ID, their source of wealth and funding to check the monies are coming from a safe source and they have the funds to send to you. We will also send them a gifted deposit declaration for them to confirm that by gifting you the money they will not have an interest in your Property.

How do I show proof of funding?

We require to see proof of funding for the money you are paying towards the house, this can be provided in the following ways:

• If this is by way of salary savings, we require 6 months’ worth of bank statements to show accumulation of the funds.
• If it is by way of a previous sale, we require a copy of the completion statement showing the value of your sale proceeds.
• If it is inheritance, we need a copy of the completion statement for the estate proceeds to verify the money’s source, etc.

How long does it take from having my offer accepted to completion?

It is important to be realistic with time frames when purchasing a Property. The average timeframe from start to finish for a Property purchase is 6-18 weeks. Therefore, while you may be very excited to move into your home, it is important to remember that it could be a long process given the volume of elements within a purchase transaction.

What is a chain? How does a chain affect me?

A chain is where there are multiple properties buying and selling from each other. For example, you are selling your Property to someone, and buying from someone, and they both have properties they are selling and buying with their respective parties also having related transactions. This is what constitutes a chain of transactions. Usually a first time buyer is at the bottom of the chain and a new build purchase or probate sale is at the top of the chain. This can often mean five or six people are involved in one chain, meaning all these people have to agree on the same date to complete and all their transactions have to coincide with each other for timings. A chain can affect you as if a purchaser pulls out within your chain, it can mean progress has to go on hold.

To get in touch with the Leathes Prior Residential Property Team for a quote, email us via info@leathesprior.co.uk or call the Team on 01603 610911.