The world of finance is one filled with an abundance of jargon that can be difficult for consumers to navigate, and the mortgage sector is one of the worst offenders. In this article, Rebekah Commane asks the experts to clarify exactly what is meant when the terms ‘conveyancing’ and ‘surveys’ are mentioned as you begin your mortgage journey.
[col type=”three-fourth”] When the topic of conveyancing arises with first-time buyers, it is more often than not greeted with silence or a blank expression, yet it is one of the key elements involved in buying or selling a property.
Many are reluctant to admit that they’re unsure what exactly it means but while you may have been unfamiliar with the word, you are most likely aware of the legalities necessary in buying a house. And basically, conveyancing is another term to describe this legal and administrative element of the purchase, which ensures that the property is legally transferred from the former owner to the new buyer.
We put some key questions to industry expert Dev Malle, director at conveyancing provider, myhomemove.
WM: What exactly is conveyancing and what does it entail?
Dev: Conveyancing is the word used to describe the legal process of buying and selling a property. Traditionally this was a job done by solicitors, but in 1987 an Act of Parliament created a new type of legal professional; the ‘licensed conveyancer’.
A licensed conveyancer has gone through extensive legal training and specialises in the law relating to the buying and selling of property.
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WM: When in the home buying process does conveyancing occur?
Dev: Conveyancing begins when a sale or purchase has been agreed; however, it may be prudent to get someone instructed prior to this in order to speed up the process. ID verification and other background checks can be carried out before a buyer or seller has been found, meaning that once the right buyer or property is found your conveyancer can start work on your move straight away. If you instruct the right conveyancer there is no reason for you to incur significant costs for this preliminary work.
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WM: How does a buyer choose the right law firm for them?
Dev: There are so many firms to choose from and selecting the right one to represent you can be a tough decision.
Looking for conveyancers that work on a no hidden fee basis will help you to plan and budget your costs. There is nothing worse than being billed twice as much as you were expecting, just as you are due to complete. It’s also vital that you ensure that the company you have chosen to work with offers a no move, no fee promise, as approximately one in three property transactions do not reach the completion stage and charges incurred for aborted cases can prove very costly.
However, the most important factor when choosing a conveyancer to instruct is whether they are on the mortgage lender’s panel of trusted conveyancers. If you choose a firm that is not on their panel, then the likelihood is that the mortgage lender will instruct their own conveyancer to carry out the work on their behalf, costing you time and money as you will need to pay two sets of conveyancing fees and there will be two sets of people checking all the paper work, slowing down the process.
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WM: What are the fees?
Dev: Legal fees vary for conveyancing depending on the value of the property concerned and the complexities of the case, including whether the property is leasehold or freehold. However, a good firm will quote for these from the outset so you will know exactly what you can expect to pay on completion.
The client will also need to cover payments to third parties such as the Land Registry and search providers. Land Registry fees vary depending on the value of the property; more expensive properties cost more to register.
Searches are specific to the location of your property, so your mortgage lender may insist that additional searches should be carried out, depending on where the property is situated, for example a mining search may be needed if your property has been built in an area where mining was previously carried out.
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WM: How long does the conveyancing process take?
Dev: This is the most commonly asked question conveyancers face, and with so many external factors affecting the timescale, it’s also the hardest one to answer.
At my myhomemove (incorporating Premier Property Lawyers) we have embraced technology through our eWay service, which means our clients can read, review and access their legal documents online to speed up the conveyancing process.
As a guideline, a freehold sale or purchase should take somewhere around six to eight weeks to complete; however, complications can arise during the process that can change this, for example, if last minute enquiries are raised that require a definite answer.
Leasehold properties will usually take longer due to the extra work and additional parties involved. If there is a mortgage involved, the lender may insist that certain conditions are satisfied prior to legal completion.
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Surveys
Along with questions surrounding conveyancing, home purchasers, particularly first-time buyers, may be confused by property surveys; what exactly they entail, whether or not they are necessary and how to go about getting one.
What Mortgage spoke to Richard Sexton, director of e.surv Chartered Surveyors, to get the information you need to know on property surveys.
WM: At what stage in the home buying process does a survey occur?
Richard: A private survey is usually undertaken once an offer has been accepted by the vendor and before a final decision is made to exchange contracts. At the same time, the lender will usually also obtain a mortgage valuation. This is for the lender’s purposes and is essentially to answer two questions:
- Is the property in a suitable condition to lend a mortgage against?
- How much is it worth?
The answers help the lender determine how much it will lend to a borrower. A mortgage valuation is a very limited form of report and should not be relied on by a purchaser on its own.
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WM: Do all property buyers need to get a survey?
Richard: At present, approximately one in five purchasers choose a private survey- however, given that a purchase is likely to be one of the major financial decisions in life, it is highly recommended.
Most people would ask somebody to look at a second hand car before they bought it and this is no different.
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WM: What are the reasons for/advantages of a survey?
Richard: It has two main purposes:
- To identify any serious issues that may deter you from buying the property
- To help you negotiate further regarding the purchase price in the light of identified necessary repairs.
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WM: Where should a buyer go to find out about surveys?
Richard: The lender can usually suggest that the valuer undertaking the mortgage valuation completes a private survey at the same time. However, there is no obligation to follow this route. The RICS (Royal Institute of Chartered Surveyors) can provide a list of local valuers and it’s also worth asking around for a recommendation or checking out the many online review sites.
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WM: What are the different types of surveys to choose from and how do you know which is right?
Richard: The entry level survey is the ‘condition report’, a high level summary at lowest cost. Then there is the ‘homebuyers report’- the most popular option chosen by 80 per cent of people. The most detailed report is the ‘building survey report’.
The valuer you are discussing appointing will be able to recommend the best option based on property type, age and condition.
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WM: How much will it cost on average?
Richard: Prices vary subject to type and location – it usually pays to shop around but with high levels of demand, it’s also worth checking how long a survey will take to produce before going ahead.
It is always recommended to see a mortgage advisor, who will be able to answer any questions you have, before beginning the homebuying process. [/col]
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