Property purchase – what to look out for and the process

Date Published 26 August 2021


What should you do before your offer is accepted?

  • Ensure you get an agreement in principle (AIP) before you search for a property. An agreement in principle is a document from your preferred lender/broker who sets out how much you can borrow based on initial discussions around your finances. This not only gives you a more accurate indication of what you can afford to buy, but also shows estate agents and sellers that you're well prepared. This bodes well when making offers and ensures you can get a full mortgage offer quicker as your lender is more familiar with you. Usually, a soft credit check is completed in order to provide an AIP.

  • Speak to and hire your legal adviser before you have an offer accepted. No transfer of funds is required at this stage but choosing your adviser means you can start the process immediately upon an accepted offer. When your offer is accepted, a sales memorandum will be sent to all parties including your solicitor and so you will need their details relatively quickly. Search the solicitors register here to see if your solicitor is regulated.

  • Ensure your finances and deposit monies are in check to set aside when you find a property.

Offer accepted - what to do now and the conveyancing process?

    So you've had an offer accepted, but you're unsure about the process between the offer being accepted and the completion date (when you get keys to the property). This can be quite an intimidating part of the process, especially if this is your first property, as there are various parties working together to complete the transaction. Just to give you an idea - lawyers/conveyancers, lenders, estate agents and even the tax man will be involved.

    For this post, we have assumed that sale is through an estate agent rather than a private sale. We have also assumed that this will be a residential purchase rather than a buy to let.


What should you do after your offer is accepted?

  • Ensure that the property is taken off the market and no more viewings take place once the offer has been accepted. This mitigates the risk of being gazumped (another prospective buyer outbidding your accepted offer, and the seller changing buyer). Additionally, this will give you peace of mind that you have secured the property.

  • Ensure the estate agent sends out the sales memorandum as soon as possible. This is a formal letter sent to all parties (buyers, sellers and legal advisors) to confirm details of one another and basic information for the purchase – such as sales price, representatives and addresses.

  • Fill out your mortgage application form/any other documents as soon as possible. You will be reliant on a number of third parties (e.g. the lender, surveyor) before you get an offer so it is in your best interest to get these items completed quickly. A delay in the mortgage offer or any issues picked up by the lender (such as the property sales price being too high) may require re-negotiation and so it's not always straightforward and stress-free.

  • Do not get put off by small matters that come up – every property has its intricacies and there may be some matters which are brought to your attention during the buying process which can sound stressful but can be mitigated when dealt with correctly. For example, indemnity insurance can help protect against issues that were present before you purchased the property. These indemnities can be purchased for a range of issues - from lack of planning permissions to restrictive covenants on the property.

    You should still seek professional advice on all matters.

  • Keep in regular contact with your legal representatives and the estate agent. Estate agents and even your lawyers are handling multiple cases simultaneously and so they may be a bit delayed with their communication. It is recommended to speak once a week to ensure the sale is progressing as expected and to close out any issues.

  • Consider a more detailed survey as there could be some issues that are missed on a basic bank survey. A more detailed survey such as a homebuyer's survey may give you peace of mind of property condition and could act as leverage to re-negotiate the price. For example, if a homebuyer's survey details damp within the property, the sales price could be renegotiated to account for a damp proof course.

  • Arrange buildings insurance – leasehold properties generally have buildings insurance taken out by the freeholder (the organisation which owns the land below a leasehold property) however all properties need buildings insurance from exchange of contract and so it would be a good idea to start the search early.

  • If you are using a buying scheme such as a Help to Buy ISA, provide the relevant details to your legal advisor/lender well in advance so that you can take advantage of your government bonus without delays.

    It is important to know what each party is responsible for to get an understanding of the expected timeline and process.


Relevant parties in the process and their role up until completion:

    Estate agents – Once the offer has been accepted, a large part of the estate agents' work is completed. However, care is still required to ensure smooth progress of the transaction. Typically speaking, this would include making sure that all parties are working towards exchange and completion, as well as identifying and resolving potential delays and being present for any re-negotiations further down the line. The estate agent will still be in regular contact with you until completion as they are the main point of contact for the buyer and the seller.

    Solicitors/legal conveyancers – You can hire a qualified solicitor or a property conveyancer to handle your transaction. A solicitor has training in different branches of the law and may be qualified to provide legal services in a range of different legal fields (i.e. criminal law, property law and marital law). Solicitors are required to practice as members of ‘The Law Society' in the UK.

    On the other hand, a conveyancer is a specialist in the legal aspect of property sales and purchases so may not have the broader skillset. In fact, conveyancers are generally less expensive!

    Your legal representative will complete searches, draft contracts, examine current deeds, provide advice, and raise queries on your behalf. Any negotiation's that occur part way through the purchase will also be handled via your legal rep.

    Contact us for recommended solicitors/legal conveyancers on 0204 548 3738, we are happy to assist.

    Mortgage lender (if applicable) – The mortgage lender will ideally have provided you with an agreement in principle (AIP) before you started your property search. At the accepted offer stage, the lender will want an application form submitted which will cover your finances in more detail (such as proof of deposit, bank statements and payslips). The lender will want to make sure that they are providing a loan on a property worth the purchase price and so will complete a survey. The bank's survey can be superficial at times and can even consist of a desktop valuation (no-one will visit the property in this case). A more detailed survey should be considered, though, there may be an additional charge to this which will be at your expense.

    Once your application form is submitted and the lender is happy with any follow up queries, you will be issued with a formal mortgage offer. The offer letter is confirmation that the bank will provide a loan to you at the specified rate and agreed terms. This is usually valid for 6 months (though it can be extended if agreed with the bank).

    The earliest we have seen a mortgage offer being issued is 1 day (however, in most cases it is likely to take around 2 weeks, subject to satisfactory checks completed by the lender).

    We have several in-house brokers that we use who could help secure your mortgage at a competitive rate. Contact us on 0204 548 3738 for more details.

    Property surveyor – Your lender will require you to complete a property survey as they would like to confirm whether the property is worth the amount you are buying it for. The lender will be using the property as security in case you cannot pay back the loan amount. There are many types of surveys, some where the surveyor is working on behalf of you and others where they are working on behalf of the lender. We will be completing a blog on the different types of surveys, so keep posted.

    Seller – The seller of the property will be responsible for providing responses in relation to queries, completing various forms in relation to the property and clearing out the property for move-in day. We recommend seeing the property just before exchange to ensure it is in the expected condition.

    Buyer – You as the buyer will be key in the searches and enquiries process as any questions you have will be presented to the sellers' solicitors before exchange of contracts. Upon signing the contract, you will be legally liable to complete (or will face potential penalties and even lose your deposit of 10% when exchanging contracts). You will receive the keys to the property after the sale completes, which is when all the funds are transferred to the seller/sellers solicitor, and the deed has been transferred to your name.

    HMRC – Stamp duty land tax (SDLT) is payable on successful completion of the transaction. The amount you pay will depend on the purchase price of the property and your individual situation (for example, if you already own a property, you will have to pay a 3% surcharge). You can see the amount that will be due on our SDLT calculator here.

    Please note that SDLT is due within 14 days of completion however the funds will be passed over to your solicitor who will be responsible for paying to HMRC.

Key note: under current UK law, any party can withdraw from the transaction before exchange of contracts without any legal ramifications as the purchase becomes binding only when contracts exchange.

Contact Modi's on 0204 548 3738 or info@modisrealestate.co.uk if you would like more information on the sales process or any other matters.