Glossary & FAQ’s
What does the term conveyancing mean?
Conveyancing is the legal process that is carried out when transferring the ownership of a property from the owner to the vendor.
What does the term “contract” mean?
A contract is a document that is entered into by both the vendor and the purchaser which then becomes legally binding upon exchange of contracts.
What does the term “exchange of contracts mean?
Exchange of contracts is the point at which the vendor and purchaser exchange legal binding contracts of the purchase and sale.
What does the term “completion” mean?
When a sale is finalised and all monies have exchanged, the purchaser has all legal rights to the property.
What does the term “freehold” mean?
The vendor has complete ownership of the land on which the property is build.
What does the term “leasehold” mean?
Possession of the land is subject to an annual fee of a ground rent to the owner to the freehold. Typically a leasehold property is normally a flat, although in some areas houses and bungalows of leasehold tenure exist.
What does the term “market appraisal” mean?
This is an evaluation of the property carried out by the selling agent, who will then advise in their estimation, the current market value of the property. Also, known as a valuation.
What does the term “vendor” mean?
The vendor is the owner of the property.
What does the term “Vacant Possession” mean?
The term vacant possession means that the previous occupants must vacate the property before the buyer moves in, including any tenants that may have been staying at the property.
What does the term “applicant” mean?
Your estate agent will referrer to a potential buyer as “applicant”.
What is meant by the term “fixtures & fittings”?
When a property is up for sale, fixtures & fittings are any items that are to be included in the sale. Usually this applies to carpets, curtains and lights.
What is meant by the term “under offer”?
A property will be known as “under offer” when a buyer has made a formal offer to purchase, but it is still waiting for the vendor/owner to accept.
Viewings are still arranged for anyone else who may wish to purchase the property. A property remains on the market until an offer is accepted. Once the offer is accepted the states then changes to sold subject to contract”
What does the term “sold subject to contract” mean?
If a property is “sold subject to Contract” or SSTC, this means that the vendor has accepted an offer from a vendor but the paperwork is not been completed.
What is the cost of selling a house?
Usually there are two separate costs incurred by a sale, the estate agency fee and the legal fees for the conveyance.
At what stage do I instruct a solicitor?
Good professional advice and guidance is invaluable. We would always recommend that a solicitor’s advice is sought at the earliest opportunity.
What is stamp duty and when do I pay it?
Stamp Duty is a government tax which is payable only by the Buyer once the purchase is complete. Your solicitor will deal with this tax on your behalf.
Purchase Price
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Stamp duty payable
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Nil up to £125,000
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Exempt from stamp duty
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£125,001 - £250,000
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1% of the purchase price
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£250,001 - £500,000
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3% of the purchase price
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Over £500,001
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4% of the purchase price
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What is a chain sale?
Normally, a sale relies upon a number of other properties to complete at the same time. Sometimes a delay one completion will result in the whole chain being affected, however here at Roberts Edwards and Worrall will attempt to manage the process to ensure that completion occurs smoothly and efficiently.
When a property is offered for sale without a chain can look appealing to certain buyers as the chance of delay is minimised.
What is land registry?
The land registry is a government department who deal with all details of properties with a registered title are recorded.
What is a Home Information Pack (HIPs)?
The Government has introduced Home Information Packs in England and Wales to improve the process of buying and selling a home. Their aim is to directly address the following:
- Consumer dissatisfaction - nearly nine out of 10 consumers are dissatisfied with the present process;
- Lack of transparency - at present key information about the property only becomes available after terms of the sale have been agreed;
- High transaction failure rate - 28 per cent of property sales fail after terms have been agreed;
- High costs of failed transactions for consumers - over £350m lost a year;
- Slow transaction process - twice the European average;
- Uncertainty – 60 per cent of property sales are in chains. Delay or failure in one has a knock-on effect through the chain.
The following are a selection of the more commonly asked questions
What will be included in the pack?
Required documents must be included in the pack where appropriate but authorised documents will only be included at the seller’s discretion under current legislation.
The required (mandatory) documents are:
- An index (i.e. a list of the contents of the Pack)
- A sale statement (summarising terms of sale)
- Evidence of title
- Standard searches (i.e. local authority enquiries and a drainage and water search)
- An Energy Performance Certificate
- Where appropriate, commonhold information (including a copy of the commonhold community statement)
- Where appropriate, leasehold information (including a copy of the lease, information on service charges and insurance)
- Where appropriate, a New Homes Warranty
- Where appropriate, a report on a home that is not physically complete
The authorised (Optional) documents include:
- A Home Condition Report
- Guarantees and warranties
- Other searches.
Although a Home Condition Report (HCR) will not be mandatory at first, we believe the benefits of including this in the pack will prove valuable to both sellers and buyers. Inclusion in the pack will demonstrate the sellers confidence in the condition of their property, while buyers will have the added reassurance that there will be no surprises in the form of costly remedial works.
How will this effect buyers?
Buying a home can be like trying to find your way through a legal, financial and administrative maze. Currently, buyers have to make a formal offer before seeing important information about a property. The new Home Information Packs, compulsory for anyone marketing a home for sale, will allow this essential information to be made available up front.
How will this effect sellers?
This means that all home owners in England and Wales will need to arrange for a Home Information Pack to be prepared before putting their homes up for sale.
Where can I commission a HIP?
Edwards & Worrall will be able to provide sellers with Home Information Packs via our own Home and Energy Performance Inspectors. Packs will be prepared in a timely and efficient manner, but for your further peace of mind we will belong to an approved redress scheme.
Will all properties require a HIP?
The Pack will be required for every residential property that is offered for sale with vacant possession, subject to a number of exceptions that will be defined in detail in the secondary legislation. In general, these exceptions relate to commercial properties, for example trading farms, or mixed use properties such as shops with a flat above, or properties sold as part of a portfolio of residential investments. Brand new homes will require a HIP, but those constructed under a government approved warranty (i.e. NHBC) will not require a Home Condition Report.
How much will the packs cost?
Details of costings are still to be finalised but it is expected to be driven by market forces. Roberts, Edwards & Worrall aim to ensure that we are competitive in the market place and our pricing approach will reflect this aim.
Where can I find further information?
More information on HIPs can be found at www.homeinformationpacks.gov.uk
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