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  • The Process of Buying a House - Which Professionals do I Legally Need?

    3rd September 2018

    The Process of Buying a House – Which Professionals do I Legally Need?

     

    None. You don’t legally need to use any property professionals in the process of buying a house or selling a house. I guess we could finish the article there. But let’s ask a couple of different questions – What does each property professional do, why should I use them if I don’t need them and what does each person do in the process?

     

    The Professionals we will look at below:

    Do I need a Conveyancer or Solicitor to Buy a House?

    Do I need an Independent Surveyor to Buy a House?

    Do I need an Estate Agent to Buy a House?

    Do I need a Mortgage Lender to Buy a House?

     

     

    Do I need a Conveyancer or Solicitor to Buy a House?

    Before we answer this question let’s cover what they do. The conveyancing process is the legal work that is required to transfer ownership of a property from the seller to the buyer and ensures contracts are correct, dates are set and all checks required are in place. So, do you need a conveyancer? You already know the answer from above – no, you don’t. You are perfectly within your rights to do all the legal paperwork and checks yourself.

     

    contract in envelope white background

    The biggest reason you may want to do this part yourself is the cost, often the most expensive service when buying a house. Fees increase with the complexity of the transaction (complicated leaseholds increase the price for example) with fees averaging between £850 – £1,500. Two ways to reduce the fee are doing all the checks yourself or to use the cheapest conveyancer. Like with most services, you often get what you pay for regarding service levels. The cheapest fee often isn’t the best value for money and if you are going to pay someone to do this work for you, you may as well spend that little bit more for it to be done well and very thoroughly.

     

    Are there situations where I do need to use a conveyancer?

    You can be required to use a conveyancing solicitor if:

    1. You are borrowing funds from a mortgage lender – lenders often require this to reduce the risk of lending by ensuring their are no clauses or factors missed that could reduce the value of the property and prevent them recovering their loan.
    2. You are buying a leasehold property. The freeholder may insist, but not always.
    3. You have an outstanding mortgage. When selling, if you have an outstanding mortgage your buyers conveyancers are unlikely to accept an ‘undertaking’ from you (a promise that the outstanding mortgage will be paid off using the sale proceeds).

     

    What are the benefits of using a conveyancer?

    contract with magnifying glass yellow backgroundThe most obvious benefit and the reason for using many services is reduced stress. You will have much less work to do by using a conveyancer and remove the need to learn what to do on top of doing the actual legwork.

    Beyond this, you should remember you are probably not insured against any mistakes or oversights you make. Any mistakes made or covenants missed could affect your use of the property and even open up the risk of being sued. This is not a cheap process and could cost you far more money in legal and court fees than just using a conveyancer in the first place.

    Leasehold transactions are usually more complex than freehold purchases due to the extra factors in contracts from restrictions on your use of the property and service charges that must be paid.

     

    What are my conveyancing options?

    Beyond doing it yourself, you can select a licensed conveyancer or solicitor. The differences are:

    • A licensed conveyancer can act on both sides (i.e. for both the buyer and seller) of a property transaction.
    • A licensed conveyancer doesn’t have to disclose any referral fees they receive from referring you to other providers; solicitors are required to disclose this information.
    • Unlike solicitors, licensed conveyancers will tend not to work in multi-discipline firm. Conveyancers specialise in property matters and can not advise in such detail about tax planning, family law etc.

    Conveyancers tend to be slightly cheaper but there isn’t a huge difference.

    DIY – we don’t recommend this route but you can if you wish. The tasks you will need to cover:

    • Check the seller is who is listed on the title deeds
    • Receive and check a contract for sale
    • Request a settlement figure for your mortgage (if you have an outstanding mortgage)
    • Liaise with the parties acting on behalf of the seller to negotiate an exchange and completion date
    • Conduct all searches – local authority, environmental, water and drainage as well as specialist ones such as chancel repair among others in unique cases
    • Ensure the bank details for your deposit are legitimate and make payment (there are cases of fraud)
    • Check the final accounts and prepare a final settlement.
    • Check the deed of transfer.
    • Ensure lenders funds are available for completion
    • Receive the property deeds.

     

    Should I use a local or national conveyancing solicitor?

    National / online firm – often have longer opening hours and can be cost effective as you can speak to a case handler rather than the conveyancer each time saving money. Dropping off documents last minute can be difficult, however and some larger firms have been accused of being conveyancing farms focused on volume not quality

    Local firm – usually offer good local knowledge and provide one point of contact. Easy to resolve issues by going to the office to drop off documents

     

     

    Do I need an Independent Surveyor to Buy a House?

    No, you can check the property yourself. But… as everybody will tell you… do not rely on your mortgage valuation as this is not a survey. A mortgage valuation is produced by a surveyor for your lender, not for you. This is important because there is a very different purpose for the report than if you had commissioned the valuation. A valuation is a quick (sometimeseven a drive-by or desktop valuation) check that ensures there are no obvious visible structural issues that could affect the property value and, as a result, affect the chance of the lender recovering their loan if you default.

    property search - yellow magnifying glass over house blue background

    An independent survey such as a Homebuyer Report or Building Survey is produced for you so you can check the condition of the property and understand what the total costs might be to rectify any maintenance or structural issues (for both visible or suspected hidden defects). It helps ensure that there are no nasty surprises once you have moved in that could cost you a lot of money to rectify.

     

    Are there situations where I do need to use a surveyor?

    The shortest of all our answers. No, there aren’t any situations where you are required to use a surveyor. You just need to remember the house is effectively sold as seen. Anything you miss before you purchase is your cost to rectify down the line.

     

    What are the benefits of using a surveyor?

    Similar to using a conveyancer, the main reason to use a surveyor is for peace of mind. The report you receive from your surveyor will provide you with 3 options. Firstly to go ahead with your purchase, confident there is nothing to worry about. Secondly, allow you to renegotiate having highlighted issues that you weren’t aware were present and will need time and money to rectify. Finally, if you find something major that you don’t want to rectify yourself or that costs more than you can renegotiate from the property price you can walk away content knowing you saved yourself a financial headache.

    The second reason to use a surveyor is their knowledge and expertise. We can all see a large crack in a wall or a missing roof. What a surveyor can do is advise where you don’t need to worry about a problem and when hidden issues are present. Not only can they highlight issues but they can identify their causes and what is needed to put it right so you know how much work is needed.

    Your surveyor will spend up to several hours looking at the property to thoroughly inspect all areas. This ranges from the drainage hatches to the roof space and everything in between. They check all areas that you will and will not have checked (or maybe not have known what to look for) when on your viewings which take only 8-10 minutes on average.

    Finally, it provides some insurance. If your surveyor misses a significant issue they are insured for any oversights, similar to a conveyancer.

     

    What are my surveying options? 

    DIY – you will need to arrange time to go round the property taking tools such as damp meters, binoculars, ladders etc to conduct a full check of different parts of the property as well as doing some research into which small issues could be symptoms of.

    RICS Surveyor – a RICS surveyor is an accredited member of the Royal Institution of Chartered Surveyors. Following gaining accreditation they must keep up minimum training hours each year and ensure professional indemnity insurance is in place. We only work with Local RICS Surveyors trained to inspect houses on a daily basis.

    Other Surveyor – there are other surveying bodies such as SAVA who also have accreditation schemes, however, we only work with local RICS Surveyors.

     

    Should I use a national or local surveyor?

    The size of the company is not so much of an issue. The bigger focus is ensuring that your surveyor has local knowledge so that they have awareness of local issues that other surveyors may not be aware of. Benefits to smaller firms is that they may be more flexible with how much time they spend on the phone with you explaining the report and next steps, whereas larger firms can offer a greater pool of knowledge to help diagnose an unusual issue that has been found. There are 9 checks you should make before getting a surveyor.

     

     

    My mortgage lender offered me a Homebuyer Report or Building Survey

    We advise that you don’t use your mortgage lenders surveyor. They can be cheaper because they are bolting on the survey to the valuation they are doing. However, consider how many valuation jobs and other surveys they have to fit in each day compared to an independent surveyor as well as the fact that any issues found in the more in-depth report could affect the level of mortgage offer you receive. The small saving on the survey price could cost you thousands in available mortgage funds.

     

    Get help deciding which survey you need or get survey quotes now.

     

     

    Do I need an Estate Agent to Buy or Sell a House?

    magnifying glass on ipad yellow backgroundSurprise… you don’t! The key thing to remember as a buyer is that the estate agent selling the property is not working for you. The seller has instructed them and they work to get them the best price. There is nothing wrong with that – it is their job to market the property and achieve their client the best possible value.

    You don’t need an agent to buy or sell a house. You can list a property for sale yourself and you can approach someone who has privately listed their house to buy it. The reason many people use an agent is so that they can get mass exposure to all the right potential buyers. At their core, estate agencies are marketing and negotiation firms. By getting the right people through the door, and as many as possible of them, the seller can get their property sold quicker at the best price. Individuals don’t have access as easily to property portals such as Rightmove and Zoopla making it harder to create awareness of their property being sold and not everyone feels comfortable conducting their own viewings or negotiating a price.

     

    When do I have to use an estate agent?

    If you found the property you want to buy via an agent, you will need to use them as they are the ones that have introduced you and made the sale possible. If you have found the property for sale directly from the vendor (or another source who knows the vendor) you may be able to deal directly with the vendor and negotiate a lower price due to the fee savings. However, some sellers will still insist you use their agent and some agents will require it goes through them.

     

     

    Do I need a Mortgage Lender to Buy a House?

    bank with increasing rates graph blue background

    If you have enough cash either yourself or through teaming up with others then you can purchase as a cash buyer. This speeds up the process as you won’t need a mortgage valuation and you can often negotiate on price as you are considered to be less risky in the sale process – your funds are guaranteed and the sale is much more likely to go ahead. If you need a mortgage to buy the house then you will need a mortgage lender and mortgage valuation. There is no way round it!

     

     

    Read more to see how you can save money by spending money on these services.

    For more information on the process of buying a house, see our infographics article.