This note has been prepared as a rough guide to the various stages of the property acquisition/mortgage process. If you should have any queries at any stage during the process, please do not hesitate to contact us.
It is important to note that each sale is different, with its own intricacies. We always aim to close sales within 4-6 weeks, though this is not always possible.
Stage 1 – Offer accepted
Once your offer has been accepted, the auctioneer will issue a Sales Advice Notice to both the vendor and the purchaser’s solicitors, requesting that Contracts and Copy Title be issued to the purchaser’s solicitor as soon as possible.
It is important to note that at this stage there is no binding contract in place. All correspondence will be marked “Subject to Contract/Contract Denied” until such time as Contracts have been signed by both parties. It is therefore imperative that we move to signature of contract stage (see Stage 4 below) as quickly as possible while at the same time ensuring that all pre-contract issues are satisfactorily addressed.
Client action – building survey and mortgage protection insurance
Once the Sales Advice Notice is issued, the purchaser should engage a suitably qualified surveyor/architect/engineer to conduct a thorough survey of the property. This survey should highlight any significant issues with the property. The lending institution may also require a (separate) valuation to be carried out.
The client should also make enquiries about mortgage protection insurance at this stage. This is one item that has a tendency to cause delays in the mortgage process, as some providers may require a full medical report to be carried out.
Stage 2 – Contracts / copy title issued to purchaser’s solicitor
On receipt of contracts/copy title from the vendor’s solicitor, we will prepare a note to the client on what exactly is being offered for sale. We will then raise “pre-contract enquiries” with the vendor’s solicitor – seeking the answers we require so as to be in a position to certify title to the client’s lending institution.
It is in or about this time that the lending institution will issue its “Mortgage Pack” to both the borrower and their solicitor. We will review the pack and report to the client. The Bank’s Letter of Offer will usually include “special conditions” which must be attended to by the borrower as soon as possible.
Stage 3 – Receipt of response to our pre-contract enquiries
We review the responses from the vendor’s solicitor. These will usually give rise to a further round of queries (often the vendor’s solicitor will be awaiting confirmations from third parties).
Once all pre-contract enquiries have been answered to a satisfactory level, we will be in a position to meet to sign the Contracts for Sale and the Mortgage Pack documentation.
Client action – it is at this stage that the client will need to put us “in funds” for the balance of the deposit payable under the Contract for Sale
Stage 4 – Exchange of Contracts for Sale
The signed Contracts for Sale will at this stage be returned to the vendor’s solicitor together with a cheque/bank draft making up the balance of 10% of the purchase price (i.e. 10% of the purchase price less the amount of the booking deposit paid to the auctioneer).
The mortgage documentation are then sent to the lending institution, requesting drawdown of funds in advance of the closing date. Lending institutions generally require 2 weeks from this time to arrange for drawdown of funds.
Stage 5 – Days leading up to closing
In the days leading up to closing we will need to be put “in funds” for:
- the balance of the purchase price (if not covered by the mortgage);
- Stamp Duty;
- Land Registry fees; and
- The apportionment figure for service charges/Local Property Tax.
With the exception of the apportionment figures which will only be ascertainable at a late stage, confirmation of these figures will be set out to you well in advance.
Client action – the purchaser should (i) arrange for home insurance cover (ii) contact the auctioneer to ensure that meter readings will be taken as close as possible to closing.