Five steps to a good move
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Our five-point plan helps you get through the commercial mortgage maze.
The buying process can be broken down into five key steps:
The seller (or their representative ie solicitor or licensed conveyancer):
· Will usually prepare a draft contract, stating the terms on which they are selling the property.
· Needs to produce evidence that the land is legally theirs, giving the exact description of what they own.
The buyer (or your representative):
· Needs to check all the information provided by the seller carefully. It is your responsibility to ensure that there are no problems with the property.
· Pre-contract searches are usually made, either by public bodies or the local authority, and are designed to reveal further information about the property.
· Ensure you have sufficient funds to purchase the property. Often a mortgage will be involved.
· Once all the information has been gathered and the contract agreed between yourself and the seller, a final contract will be prepared for your signatures.
· The next step is the exchange of contracts between the parties. This means a binding agreement is formed.
· Prior to this exchange, either party can withdraw from the transaction without penalty, but once the contracts have been exchanged, either party is liable for damages.
· You will usually have to pay a deposit at this point, often 10 per cent of the purchase price.
The buyer:
· You will usually send the seller a list of questions (or 'requisitions') asking, for example, for confirmation of the exact amount of money still owed, and where the completion will take place.
· You will usually need to send a draft purchase deed to the seller. Although a contract will already have been drawn up, this deed will put what was agreed in that contract into practice.
· Preparations for your mortgage must be made at this stage by the lender. For example, checks must be made to assess the ownership of the property and credit checks must be made against the buyer.
The seller:
· Will need to respond to the requisitions made by the buyer, as well as (if necessary) checking and approving the deed. The seller must then sign a copy of the deed.
· Preparations also need to be made concerning any mortgage that the seller has on the property, as this will need to be paid off or transferred.
· Just before completion, final searches and checks will need to be made on the property to verify that there has been no change in the situation.
· At completion the buyer will hand over the money in return for the deeds to the property. This is usually done by post.
· The transfer of money can be done with a bank transfer. Once this has been confirmed the keys will be released to the buyer and the deeds sent to the buyer's solicitor.
· The clients will be instructed as soon as it has taken place, and you, the new buyer, can take ownership of the property.
· There will still be some loose ends to tie up after completion.
· The seller will usually have to confirm the discharge of any mortgage over the property. Once this has been done the receipt will need to be transferred to the buyer to be sent to HM Land Registry to prove that it has been discharged.
· The buyer's solicitor will deal with the stamping of documents if stamp duty applies. They will also need to register the sale with HM Land Registry.
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