Survey & Valuation When Buying a Property

When contemplating buying a property, the aspect of surveys and valuations requires careful consideration for informed decision-making. Here are essential points to keep in mind:

Private Survey Commission

If you are planning to commission a private survey (which we highly recommend), please share the results with us once you receive them. This step ensures that we have comprehensive information about the property. We are your legal advisors though and cannot give you any advice concerning the survey, as such should be sought from the surveyor. 

Mortgage Application Guidance When Buying a Property

In the case of mortgage applications, providing our details to your lender is crucial. Once you receive your mortgage offer and valuation report, please forward them to us. It is important to note that the valuation report conducted by the Building Society/ Bank is primarily a valuation of the property. It does not serve as a structural survey, which provides a detailed analysis of the property’s condition and identifies hidden faults.

If you know at the time you apply for your mortgage that you would like a structural survey, tell the bank/ building society or the broker arranging your mortgage application.  It may be possible to combine the valuation and a full structural survey report which might in turn save time and expense.

Importance of RICS Home Survey

Considering the benefits for when buying a property, it is prudent to explore the option of obtaining an RICS Home Survey. The right choice of survey is crucial, and you can find detailed information at https://www.rics.org/uk/upholding-professional-standards/sector-standards/building-surveying/home-surveys/  

Financial Implications

Undoubtedly, a survey can be rather expensive when buying a property, but may prove well worth the cost in the long term taking into account how much your home is going to cost you to buy and that it is an investment. Identifying and addressing any defects in the property upfront can save you from potential risks and extra costs  in the future as well as any current problems which may deter you from wanting to buy the property.

Planning Search Overview

The Local Authority Search which will be applied for will relate to the property you are buying a property only.  Therefore, in addition to the searches outlined in our Letter of Engagement, you can also instruct us to apply for a Planning Search which should list Planning Decisions close to the property which could potentially affect your intended use and enjoyment of the property including arrangements for the local area. The fee payable for this search is approximately £40 and if you would like us to apply for this additional search please let us know straight away.  

Pre-Contract – Investigating Title

1. Confirmation of Instruction

To initiate our services, confirm your decision by signing and returning a copy of our letter of engagement and Terms of Business. Electronic copies suffice for this purpose.

2. Payment on Account

Make a payment on account to cover initial costs, facilitating identity checks and preliminary processes.

3. Third-Party Funding

If using funds from a third party towards the purchase, notify us promptly and before the exchange of contracts.

4. Initial Checks and Contract Papers

Once initial checks are satisfactory, payment is received, and draft contract papers from the seller’s solicitors are in our possession, we initiate a meticulous examination.

5. Documentary Checks

We scrutinise documents of title to reveal vital information: 

• legal ownership
• mortgage status
• adverse matters
• property restrictions
• details regarding planning and building regulations.

6. Search Applications:

Subject to your preferences, we proceed with the following searches (mandatory for mortgage applicants):

• Local Authority Search (unveiling property-related aspects such as planning consents, road proposals, building regulation adherence, and potential compulsory purchase orders).
• Drainage and Water Search (providing details about drainage, sewer connections, water mains linkage, water classification, and billing method).
• Environmental Search (offering insights into the property’s surrounding environment, highlighting factors that might impact use, enjoyment, or value).
• If specifically requested, a Planning Search is integrated into the process.

Pre Contract Enquiries and Report on Title

We will:

• raise enquiries if necessary of the Seller’s Solicitors. 
• report to you on your proposed purchase, the result of searches and the mortgage offer (if applicable) once satisfactory replies have been received. 
•  provide you with a copy of the Contract and draft Stamp Duty Land Tax return.   
• let you know the amount you will need to transfer to our account by way of a deposit payable on exchange of contracts taking place (usually 10% of the purchase price).

 If you are still happy to proceed with buying a property, an appointment will be made for you to attend the office to sign the contract, Transfer deed, Stamp Duty Land Tax form and any other documentation (including mortgage deed, if applicable) that is required for the transaction to proceed to exchange of contracts

Any enquiries you may have with buying a property or investigations or surveys you wish to do must be completed to your satisfaction before the exchange of contracts. 

If you are using money from any third party towards the purchase, you must inform us at the outset of your transaction. This way, we can advise you of what additional information/documentation is required of you and any additional work we will need to undertake on your behalf.  We will also provide you with a revised estimate of our fees if appropriate.  

Before Contracts are exchanged, you should ensure that all financial arrangements are in order.  Normally when buying a property, 10% of the purchase price should be available for use as a deposit on exchange of Contracts.  

NB: It is not possible to use mortgage funds to pay the deposit required on exchange. If you are purchasing with the aid of a Mortgage, then you should wait until you have received, approved and accepted the Mortgage Offer, before proceeding to exchange.

Exchange of Contracts

If you are living in rented accommodation: 

•  you should not give notice to your landlord to end your tenancy before contracts are exchanged. If in doubt, you should discuss this with us first.

If you are buying a freehold property:

•  you must arrange for building insurance to be in place once contracts have been exchanged and provide us with evidence of this if we ask for it. 

If the property is leasehold:

• insurance is usually arranged by the landlord. 

We will not exchange contracts on your purchase without your prior authority or agreeing to a completion date.  

Post Exchange of Contracts

Once contracts have been exchanged, if we have not already done so, we will :

• prepare the Transfer Deed and send this to the seller’s Solicitors for approval.
• request mortgage funding from your Lender (if applicable).  

We usually ask for the funds to come in the day before Completion to ensure that they are received in good time. If completion is due to take place on a Monday then we will request funds for the Friday before.  Please note that interest on your Mortgage will start from the day funds are released to us.

We will forward to you our invoice and a Statement of Account showing the amount required from you (and if applicable, your Mortgage Lender) to enable us to complete the transaction on the day of completion.

Any funds required from you must be received by us at least five clear working days before the Completion date but certainly by no later than the day before the agreed Completion date.

Completion 

Here is what you can expect on the Day of Completion: 

• We will send the balance required to complete, including the funds received from your Lender (if applicable), to the Seller’s solicitors. 
• Once the money is received, the Seller’s solicitors will get in touch, usually via phone or email, to confirm the completion.
• The Seller’s solicitors will coordinate with estate agents to authorise the release of keys to you. 
• We will follow up by contacting you, confirming you can arrange to collect the keys from the agent. If there are no estate agents involved, prior arrangements for key handover will have been communicated to you.

Keys are typically handed over around lunchtime on Completion Day. However, in cases involving related sales/purchases, this may occur later in the day.

Completion is the date on which you will be allowed to take possession of the new property, and a completion date will need to be agreed with the seller’s Solicitor before the exchange of Contracts takes place.

Once contracts have been exchanged, your purchase of the property becomes legally binding, and neither the seller nor yourself can renegotiate the price or any other terms and you must complete the purchase on the agreed completion date (i.e. moving day). 

 If you do not do so you will be liable to pay the full 10% deposit (if you have not already done so on exchange) together with interest and damages i.e. the money the seller has lost and expenses they have incurred to the Seller for your failure to complete. 

Important Reminders:

Before leaving your current property, we recommend taking meter readings. Also, at your new property on Completion Day, promptly record meter readings and notify the relevant provider, whose details are available on the Property Information Form provided by the sellers.

Post Completion

We will deal with all post-completion work on your behalf, which includes:

• Obtaining
  • the title deeds and accompanying documents from the seller’s solicitors
  • any agreed indemnity policies

• Making an application at HM Land Registry to update the Register to show you as the registered proprietor. 
• Applying for any Charge in favour of your lender (if applicable) to be entered against the register and for the seller’s mortgage to be removed from the title register.
• Submitting the Stamp Duty Land Transaction Return to HMRC and paying the Stamp Duty Land Tax. 

If you are buying a property we will send a Notice of Transfer (and Charge, if applicable) to the Landlord or Managing Agent as may be required under the terms of the Lease. 

Once the change of ownership has been completed at the HM Land Registry we will:

• inform you and your Lender (if applicable) of this in writing.
• send you any other deeds or original paperwork that has been obtained during the conveyancing process.  

Please note that this can take several weeks/months to receive.

We hope you find this guide useful. If you have any further questions about buying a property, do not hesitate to contact us.
This Guide is intended as a general reference aid only. If you have any questions regarding any stage of the process,  please contact us on 020 8367 3230 or reception@martinshepherd.co.uk.