Conveyancing

Conveyancing is the term used to describe the legal process of transferring ownership of a property from one party to another. But when used in the context of buying or selling a house, it has a wider definition. In this context it refers to all of the legal administration involved in ensuring that the process of buying or selling a house is legally valid. Conveyancing is carried out by solicitors or specialist conveyancers. Both the buyers and the sellers instruct their own conveyancers who liaise directly with each other. As moving house isn’t something we do very often, most of us don’t already know a conveyancer or solicitor. Use our free Conveyancer Comparison service to find the best conveyancer for you. If you have never used a conveyancer before, below are some of the terms you can expect to come across during the process and their meaning; Exchanging Contracts Completion/Completion Date Power of Attorney Contract Deposit Disbursement The exchanging of contracts can only happen once all the necessary paperwork is in place and a deposit (normally 10%) has been paid by the buyer. This is a very important moment as once contracts are exchanged, the agreement becomes binding. From that moment on, the seller must sell and the buyer must buy at the price stated in the contract. At this point only the buyer can pull out. But doing so would mean the lose of their deposit. Until contracts are exchanged nothing is binding – either party can walk away from the transaction with no penalty, other than the surveyors and legal costs they have incurred . Completion/Completion Date This is the date that ownership of the property formally passes from the seller to the buyer. This can only take place once all funds are in place and both parties have agreed to signed and exchanged contracts. The completion date is normally a few days after the exchange date, but they can both happen on the same day if all parties are happy for it to happen. It is not essential for either party to be present on the completion date as solicitors or conveyancers can act on your behalf through a Power of Attorney. Power of Attorney Power of Attorney is a written authorisation to represent or act on another’s behalf in private affairs, business, or some other legal matter. Buyers and sellers give their solicitors or conveyancers a Power of Attorney to represent their interests in the buying or selling of a property. Contract This is the agreement between the buyer and the seller. It sets out the main terms of what has been agreed such as the property, the price and the names of the parties. It also deals with the process if something goes wrong. Rather than making the buyer and the seller meet to sign the same contract, the seller’s solicitor draws up two copies of the same contract, and each party signs their own copy. When both parties are ready to legally commit, the two contracts are exchanged. Deposit In the context of buying a home, deposit can mean two different things. When most people talk about the deposit they mean the portion of the purchase price of the property that the buyer is putting down him/herself (i.e. the difference between the amount of the mortgage and the cost of the property). When Solicitors or Conveyancers talk about the deposit they are talking about the money that is handed over to the seller’s Solicitors when contracts are exchanged. This is normally 10% of the purchase price of the property. If the purchaser is borrowing more than 90% of the value of the property, they often wouldn’t be in a position to deposit 10% for the exchanging of contracts. In such instances the sellers often agree to a reduced deposit. It should be noted though that if after contracts have been exchanged, if the buyer subsequently decide not to go through with completion, they would be legally bound to make up the deposit to the full 10%. Disbursement A disbursement is a fee which Conveyancers or Solicitors pay to someone else on behalf of their client. An example is the fee paid to the Land Registry.