Buying a house can take anywhere from 4 weeks up to 4 months depending on any unexpected discrepancies which may arise during the conveyancing process, as well as issues which may crop up from additional buyers and sellers, if there is a lengthy chain. Though for cash buyers and where there is a short chain, then the process can be very quick. For everyone completing on a house sale, the final stage in buying a house is the window between exchanging contracts and the final stage known as ‘house completion’.
What’s involved in house completion?
Once legally binding contracts have been drafted up by your Conveyancer Solicitor, to exchange contracts, this legal document will be given to both the vendor and buyer to sign, which will include the agreed price (purchase or sale) and any additional property assets. Then the buyer will pay a deposit of normally 10% of the sale price once both parties have signed the exchange contracts.
A date will be agreed by both the vendor and buyer to when they will complete on the purchase or sale of the properties and transfer over legal ownership. This stage is known as ‘house completion’.
Your Legal representative (named as Solicitor or Conveyancer Solicitor) will undertake final checks to include:
- Obtaining a Mortgage Statement from the vendor which will show funds owed: mortgage balance, interest rates if applicable, mortgage outstanding and lender information related to the property to be sold.
- Obtaining a Completion Statement relating to the buyer’s finances, showing monies owed to the vendor on completion of the property and ensuring funds will be ready, including the mortgage if an application has been made.
- Organising a Transfer Document: Once funds has been transferred from the buyer to the seller, this Transfer Document will be passed over to the new owner of the property.
- Your Conveyancer Solicitor will register your ownership of the property with the Land Registry and mortgage against the title of the property, if applicable.
On the day of the house completion, for non-cash buyers, the buyer’s Conveyancer Solicitor will ensure the balance of the sale price is transferred from the mortgage lender to the seller’s Conveyancer’s Solicitor (normally 90%) or alternatively funds provided direct by the buyer will be transferred. Then once monies have been transferred and all paperwork is in place, the keys can be exchanged.
How to be prepared for your house completion?
It’s worth having a checklist for this final stage of house completion as penalties can be incurred for late completion. Financial penalties can be charged at a daily interest rate, payable at the rate agreed in the contract, normally enforceable from either 1pm or 2pm which is deemed to be the next working day. Costs may include any financial losses by the seller relating to the removal van or even temporary accommodation costs.
Other pointers to consider:
- If you are a buyer, ensure your contents and building insurance is in place for the new property to start on the day of completion, when property ownership is transferred.
- If you have applied for a mortgage, ensure your mortgage funds will be available in time.
- If you have applied for a mortgage, check with your Conveyancer Solicitor that there is enough time to transfer mortgage funds from the mortgage provider to your Conveyancer Solicitor, so they can then transfer funds to the buyer’s Conveyancer Solicitor before completion. Best practice tends to be 1 day before. Also worth noting, that the Conveyancer’s banks have a cut off time in the afternoon for transferring funds.
- Ensure all funds are available to include payment of stamp duty (where relevant), land registry and searches, as well as legal fees.
- The dates for moving and transfer of funds tends to be on a week-day due to the availability of the Conveyancer Solicitor, Building Societies and Banks.
- Ensure both the buyer and seller are aware of timings to move out of the property and for moving in to avoid any confusion on the day and delays in your house completion.
- Reconfirm the time for dropping off and collecting the relevant property keys, which is normally from the Estate Agents once funds have been transferred.
- Upon departure of the property, ensure you have taken all meter readings and provided these to your utility companies. It’s also worth taking readings for the property you will be moving into, in case of any discrepancies.