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Below are a number of terms you are likely to come across when
buying, selling or re-mortgaging your property
This is the date that ownership of the property passes from the
seller to the buyer.
The seller and buyer should agree a suitable date between them and
notify their solicitors. You should always bear in mind unforeseen
delays i.e searches not returned on time. Only when contracts are
exchanged and completion date is fixed can you virtually guarantee a
completion date will be met. Therefore we advise that firm commitments
to things like time off work or arranging removals should not be made
until you have a fixed date.
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This is the legally bidding agreement between the buying and selling
parties. It sets out the main terms of what has been agreed such as
property, price and names in the party. Two copies of the contract are
drawn up and each party signs their own copy, meaning both parties do
not have to meet up to sign one contract. When both parties are ready to
commit the contracts will be exchanged and become legally biding
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There is often confusion around the deposit with most people assuming
it is the part of the price the buyer is putting down themselves (the
difference between the mortgage amount and purchase price). Rather it is
the amount of money handed over to the sellers’ solicitor upon exchange
of contract.
This can be anything up to 10% of the selling price and should be
negotiated in advance. You should be aware that if you pay a reduced
deposit and fail to complete through no fault of the seller, you will be
liable to make the deposit up to the full 10%. You could also be liable
to pay further compensation to the seller through your failure to
complete.
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Disbursements are all the payments that solicitors make to other
people on your behalf. These are standard costs and include local
authority searches, official searches and stamp duty.
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This is probably one of the most important moments in the house
buying process. The entire matter becomes legally binding, the seller
must sell, and the buyer must buy, at the price stated on the contract.
Before contracts are exchanged nothing is legally binding and either
party can walk away at any time.
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This is the list of what in the property is included in the sale. The
form is completed by the seller and sent to all legal parties and a copy
sent to the buyer so everyone knows exactly what is included in the
sale.
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Means you own both the property and the land the property stands on
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It is a central body that retains records of who
owns land and under what conditions.
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Identifies a property that is of temporary ownership and stands on
rented land. When the lease expires ownership of the property returns to
the freeholder.
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This is a list of questions about the property, which are sent to the
local authority. It answers questions like, whether the council
maintains the road serving the property, and what planning applications
have there been against the property.
However it does not cover any planning applications made or in
progress against nearby properties.
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This is the formal offer, in writing, from the lender
to lend you the money you need to buy the property. It will set out any
conditions that the lender is applying to the offer e.g. that your
existing mortgage is repaid before your new one starts.
Contracts should not be exchanged until the
solicitors have received written confirmation of the mortgage from the
lender.
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The legal document the mortgage lender uses to secure their interest
in the property until the loan is repaid.
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This is a questionnaire about the property completed by the sellers.
It covers such items as guaranties, neighbours disputes and boundaries.
As a buyer, if you have any specific queries about the property you
should ask them now.
As a seller if there is a question you do not want to answer you must
discuss it with your legal representative. Failure to disclose
information could give the buyer grounds for legal action against you.
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This is the final payment of a mortgage loan
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This is the document sent by your existing mortgage lender that sets
out the amount required to pay off their mortgage. This will include any
Early Repayment charges or other fees that are due to them
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This is a tax paid by the buyer of a property valued at over £120,000.
If the property you are buying is £120,001 - £250,000 stamp duty is
charged at 1% of the purchase price. £250,001 - £500,000 at 3%, and
above £500,000 at 4%.
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These documents act as proof that the person selling the property
owns it to sell. Secondly it sets out any rights or obligations that
affect the property.
If selling time can be saved by obtaining your deeds as early as
possible. Most people’s deeds are held by the bank or building society
and they may charge you to release the deeds.
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This is the documentation required to show ownership of the property
has changed from the seller to the buyer.
It is dated with the completion date and will be forwarded to the
Land Registry after completion. The Land Registry require this to
demonstrate that there is a new owner of the property.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
You can choose how we are paid: pay a fee, usually 0.5% of the loan amount; or we can accept commission from the lender.
The FSA do not
regulate some forms of mortgage.
The FSA do not
regulate Legal Services.
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