CONVEYANCING - BASIC PROCESSES
A residential conveyancing transaction will involve the following stages:
A holding deposit does not create any legal rights for either purchaser or vendor. It is simply a sign of good faith. If the purchaser decides not to proceed with the purchase this money is refunded to you. Similarly, the vendor is not obliged to proceed and is entitled to sell the property to another party.
Contract exchange can be effected in either of two ways;
exchange with a nominal deposit under a (normallly
5 to 10 business day) cooling-off period. Under this a purchaser
has a legally binding contract with the vendor which may be rescinded
by the pruchaser within the cooling-off period. While the purchasers
may change their minds about proceeding, the vendors cannot. However,
rescinding a contract involves the forfeiture of 0.25% of the purchase
price, no matter what the reason. Some buyers are prepared to take
this risk to secure the property.
- alternatively, if the purchaser has reviewed the contract with a solicitor, any changes have been negotiated, and all pre-purchase inspections required have been obtained, unconditional loan approvals have been obtained, and a 10% deposit is at hand, unconditional exchnage may proceed. in this instance the contract is legally binding on all parties and failure to complete may result in severe penalties.
Settlement is the final step in the transaction when the balance of the purchase price is paid. This usually occurs 42 days from exchange.
PRIOR TO SALE
As a vendor you should take this opportunity to talk to your lender to obtain an indication of what you owe and what they will charge you to discharge your mortgage. You should also gather any Council approvals for work done on the property such as extensions, patios or pools. You must also ensure that your property complies with the Smoke Detector Regulations.