Archive for the ‘Residential Conveyancing’ Category
Top tips for first time buyers….
Top tips for first time buyers
Part 1: How to choose the right property solicitor
This is the first in a series of blogs aimed at explaining the property purchasing process to first time buyers.
We know, when buying property, being a first time buyer can be an exciting yet daunting experience; a huge financial commitment often follows but on the plus side, if you are renting, you may finally get rid of a difficult landlord.
The Conveyancing Process – The Parties Involved
With so many different parties involved, it can be really confusing to know which one to follow and / or engage with. There’s the buyer, the buyer’s solicitors, the seller, the seller’s solicitors, the estate agent, mortgage lender and sometimes even a mortgage broker. It’s understandable why people often become nervous and sometimes, unclear on what to do.
The golden rule however is to always follow the advice of your property solicitor. Not only are you paying them, but the Solicitors’ Regulatory Authority (SRA) imposes strict rules on solicitors professional conduct. Among these rules is the absolute requirement to act in the best interests of a client.
A reputable conveyancing solicitor is critical to the process.
Conveyancing Quality Scheme (CQS)
Technical jargon, the fear of hidden fees, incompetent advice (…etc) are among common fears and not without reason. Solicitor complaints are ever increasing and the Law Society recognises this. To allay fears, in 2011 a conveyancing quality mark known as the Law Society Conveyancing Quality Scheme, or CQS for short, was introduced.
CQS helps to determine a good conveyancing solicitor from a bad one with members having to undergo annual audits and assessments.
It is advisable to use a property solicitor working for a firm accredited with CQS. This will give you the confidence to know that the conveyancing / property work will be conducted at a high standard, as set by the Law Society.
Lexcel
The Law Society recognises those firms that operate their management and operational systems at the highest possible level through the award known as Lexcel.
Lexcel firms are independently audited annually by Law Society approved bodies to ensure they operate excellent practice management standards.
Both Lexcel and the CQS accreditations are Law Society awards which recognise excellence in customer service and practice management. They are a quick and easy way for clients to decide whether or not to use a solicitor and can give you the confidence that you are making a good choice.
Bespoke service
Once you have found a CQS and Lexcel accredited firm, check if there is a specialist who will be responsible for your matter. Whilst a multi skilled lawyer is good for general work, when it comes to spotting potential conveyancing issues select a specialist who will root out even the teeniest of problems.
Ask how many first time buyers they have dealt with in the last 6 months? A first time buyer solicitor will offer you the service you need.
Your advisor should provide a written report to you before requiring you to sign anything. Signing documents in a hurry without knowing what you are signing, without any proper report or feedback given the huge financial investment you are making is simply not professional and a disservice to you.
Never be afraid to ask your lawyer or licensed conveyance to explain matters where you do not understand them. You are paying for legal representation for a process that can be stressful and complicated. Ask…. ask again… and even ask again! Be sure you understand what you are doing before you sign the property contract.
Buying property is often the largest investment you will ever make
Fees…
Varsha Shah is a senior licensed conveyancer at Saracens Solicitors. Varsha says, “buying property is often the largest investment you will ever make – why would you economise or compromise on the legal process? I have had clients come to me for solutions after having been seriously professionally let down by their conveyancing solicitor. When I ask them why they didn’t choose a CQS or Lexcel accredited firm in the first place, they say they didn’t know about it, and thought all property lawyers did the same work. But the number one reason is that they offered a cheap service”.
With first time buyers, the reasoning understandably is to keep costs down. Whilst we urge clients to be sensible with costs, when it comes to professional service providers, bargain hunting is not the best approach. People often choose a lawyer they know personally or if they don’t know one, choose a specialist that is known to be good.
It’s highly unlikely that you’ll find a conveyancing solicitor that is very cheap and at the same time very good. Usually, if the fees are very low, the service level will be too. Remember the old adage:
“You get what you pay for”.
There are providers out there that offer very cheap conveyancing referred to as conveyor belt / factory / sweat shop, style conveyancing firms. Their business model essentially involves doing volume conveyancing at very low cost. In other words they make very small profit from each file resulting in the process becoming a numbers game on a ‘conveyor belt’.
Cost is the driving factor in these types of firms, not quality. This can mean that someone who is under-qualified, junior, and / or incompetent has the legal responsibility of buying your property for you! To make matters worse, the work is done under extreme pressure with the objective of achieving ‘sales targets’ so the propensity to make mistakes is generally much higher.
Whilst you think you may be bagging a bargain today, the true impact and any mistakes made during the conveyancing process may not be revealed until much later – perhaps not until such time as you yourself want to sell the property, by which time it may be too late for any serious problems to be rectified.
On average, a conveyance can take between 4-8 weeks to complete, with some 10-15 working hours on a file when done properly.
Personality, nominations and a good track record…
Your money and your stress levels will be in the hands of your chosen advisor for the time it takes for the purchase to be completed. Their personality and temperament is key. You must be comfortable to just pick up the phone when needed and express your concerns with confidence.
Test the water with them.
When speaking to them, do they communicate effectively?
Do they put you at ease and explain matters properly?
Are they patient? And do they understand your concerns?
On the subject of mortgages, ask your solicitor if the firm is a panel member for the particular lender you intend to use. A conveyancing solicitor will often be conducting work for both you and your lender. However, the work for the lender can only be done if the firm is a member of that panel. If not, you may find the solicitor will outsource the lenders work to another law firm which may result in you paying higher or two lots of fees.
Some law firms are not even owned by lawyers but by non-legally trained business people i.e. people who do not understand the law. It is therefore worthwhile enquiring about the level of indemnity insurance cover in place and how many years experience the person working on your matter has. Whilst most good property solicitors and conveyancers will act diligently from time to time mistakes do happen. If things go wrong, you will need the benefit of a law firm’s indemnity cover to protect you from any losses caused by the solicitor or the law failing to protect you.
Look at the firm’s website. It may tell you a lot about the firm itself and the quality of work and service it offers. Ensure that you look out for the firm’s testimonials as this will give you a good insight into the service provided as well as the experience of others who have previously gone through the process themselves. You could even conduct a Google search asking for ‘Reviews on XYZ law firm’ to see what results show.
Finally, look out for specific awards the firm has won or any that the firm may have been nominated for in addition to CQS and Lexcel. Most high profile / prestigious awards are only given following an audit process so an award winning firm or even one that has been nominated for an award will usually be a good indicator of the level of service on offer.
Buying a property is one of the most important decisions you will make in your life. However choosing your property solicitor wisely can be the difference between ‘make or break’ so choose wisely.
Safe as Houses? Protect your home against property fraud | Property
Image by elhombredenegro
Whilst the property market is slowly showing signs of improving, property fraud is booming.
Fraudsters are finding new ways to commit identity fraud and home owners need to be more vigilant to any form of property fraud taking place. If you think identity fraud is just about stolen credit cards or bank details then read on – it goes well beyond that.
What is property fraud?
Property fraud occurs when a fraudster obtains fake identification and title deeds belonging to someone else and then poses as the owner to either sell the property or take out a mortgage over it, usually from an institutional lender. If successful, the fraudster will pocket the cash from the sale or abscond with the mortgage monies right under the property owner’s nose, leaving the owner saddled with no property and a huge debt to repay. Often property owners only learn that a property fraud has occurred when they try to sell their property or re-finance it, because up until then there has been no need for them to check the position.
The most common situations where property fraud can take place include:-
- When your property is free of a mortgage
- If a marriage or relationship has broken down
- If you have purchased your property as a “buy to let” investment
- If your property is left empty
- If you, as the owner, do not live in the UK
If you fall within any of the above, then your property may be at risk to property fraud taking place.
Safeguarding your property
The system of land registration operated by Her Majesty’s Land Registry is a record of all registered property ownership in England and Wales. Under the Land Registration Act 2002 which came into force on 13 October 2003, every time a property changes hands, it must be registered at the Land Registry and all records and documents held are open to public inspection and are mostly electronically stored. This means that anyone can see if you own your property. Some may argue that this increases the risk of property fraud, however the Land Registry treats all risk of property fraud seriously and has implemented its own prevention measures.
Register your property
Whilst documents may be open to public view, registering your title at the Land Registry will provide you with a state guarantee that should you be a victim of property fraud, you may be entitled to compensation.
The Land Registration Act 2002 introduced compulsory registration, and also allows for voluntary registration as well. If your property is not registered then give serious consideration to registering it at the Land Registry now as a deterrent and unofficial indemnity to property fraud. You do not have to wait until you sell your property to do this.
By registering your property, you will reduce the risk of property fraud occurring as there will be more security against the loss or theft of title deeds relating to your property.
Keep your information up-to-date
By having a registered title, the Land Registry will know where to contact the registered owner. If a potential property fraud is happening and the Land Registry’s suspicion is aroused, they will immediately contact the registered owner and notify them.
If your details are not up-to-date, not only will you not know of the fraud, it could also reduce the amount of state compensation that you may be entitled to if a fraudulent transaction does take place.
You can provide the Land Registry with up to three addresses as to where you can be contacted. These addresses are not just limited to the property address but also include an email address and an overseas address too.
As well as keeping your address up-to-date, it is also important to ensure that your name appearing on the title register is correct too. If you change your name by marriage or divorce, let the Land Registry know. This can be done by providing the necessary documentation to show the change of name. The Land Registry will then be able to update their records to reflect the correct name of the owner. Again, this minimises the risk of a potential property fraud taking place.
One example where failure to keep the Land Registry updated has had disastrous consequences is where a legal owner, let’s call him Jonathan Smith failed to notify the Land Registry that the title deeds to his property were incorrect. In addition, during his period of ownership, the property had been tenanted from time to time, but had also remained empty for extended periods of time. For the last 20 years, his name had been registered against the property in question incorrectly as ‘Jonathon Smyth’ and he had never attempted to rectify it. The title deeds to his property were subsequently stolen from the property where Mr Smith had unwittingly and perhaps carelessly always kept them. As a result and by design one sneaky minded individual with a penchant for property fraud (likely the burglar himself), made in depth enquiries, obtained fake ID and posed as Mr Jonathon Smyth. Jonathon Smyth then re-financed ‘his’ property to the tune of £500,000 and disappeared into the ether with the proceeds. . Meanwhile, Jonathan Smith’s compensation was massively reduced because of his failure to take proper steps to protect himself.
Place a restriction on your title
The Land Registry have introduced a new restriction that a property owner can apply to have entered on to the title register of their property which restricts the registration of a transfer or mortgage unless a solicitor or conveyancer has certified that the person who signed the transfer or mortgage deed is indeed the registered owner of the property.
The effect of having this restriction is then focused on ensuring that the registered owner’s identity is carefully checked. With title registers open to public inspection, registering such a restriction may deter fraudsters from committing property fraud knowing that thorough identity checks will be carried out against them and increasing the exposure of their activities.
This restriction can be placed when you purchase your property or at any time you feel that your property may be at risk to fraud taking place.
Property fraud is serious and should not be taken lightly. If you believe that you may have been the victim of property fraud or there is a chance that your property may fall in a category where it could be at risk of fraud taking place, take immediate action.
Contact the property team at Saracens on 020 3588 3500 to see how we can help you to avoid being a victim of property fraud.
Varsha Shah
Saracens Property Solicitors
Property purchasing; does it come with a money-back guarantee?
It’s a fact – the recession has hit the housing market hard. The last few years have seen the housing marketing sink. It has been a tough time for everyone. However, there appears to be a glimmer of hope with house prices slightly on the increase, banks and building societies beginning to offer better mortgage deals and the removal of the home information packs which did not really aid anything to either a seller or a buyer.
Careful consideration
Whether the housing market is booming or not, one thing is for sure, buying your home is probably going to be one of the biggest investments in your life. It requires careful consideration of your budget. Making such a huge commitment, you would need to ensure that what you are buying is worth the money you are willing to spend for it.
If you are considering buying a property, give careful consideration to having a survey of the property carried out as well. Most of us buy our homes with the help of a loan from a bank or building society who will usually carry out their own valuation of the property. This valuation, however, is not a survey. It will only confirm that the price the property is being sold at is good for the amount of money the bank is lending to you. The bank’s valuation will not provide details as to the condition of the property.
Survey about surveys
Research carried out by the Royal Institute of Chartered Surveyors has revealed:-
- More than 50% of homebuyers incorrectly thought that their bank’s valuation was a survey and included a report as to the condition and state of the property
- Just over 30% of homebuyers believed that the valuation provided recommendations that their lawyer should investigate for them
- More than 75% of homebuyers agreed that having a more detailed survey report instead of just a valuation carried out by their bank would allow them to negotiate a better purchase price with the seller.
We all live in the real world and we all know that everything is not perfect. With so many television shows on how to do up your home so you can sell it quickly, who can blame a seller wanting to give their home a cosmetic makeover to achieve the best price possible?
Whilst the property may be presented in a tidy state and looks perfect, there could be a number of underlying defects that only a survey carried out by a qualified surveyor would reveal.
Which survey should you go for?
When buying your home, you have the option of two different types of surveys available:-
(a) A homebuyer’s report – the most commonly used one for homebuyers;
(b) A full structural building survey
The homebuyer’s report provides an inspection and report on the actual condition of the property together with a valuation. The report also provides any recommendations that the property could be benefit from.
A full structural survey is more expensive than a homebuyer’s report and is usually only carried out when the property is in a bad state of repair or has been significantly altered or renovated.
The results
The survey report, whether it is a homebuyer’s report or a full structural survey, will provide recommendations as to whether any works are necessary to be carried out to the property. This is very useful for a buyer as it can be used as a negotiating tool with the seller in seeking a reduction of the purchase price. Alternatively, you can ask the seller to carry out the works themselves in time for when you move in to your new home.
The most common issues that are revealed in a survey report include whether or not the property is in need of damp proofing or timber treatment works, whether or not it has been extended or altered in any way, for example if any of the chimney breasts or non-structural walls in the property have been removed, if the central heating system is in good working order and if all the services including water, gas and electricity are properly connected.
Having a survey carried out before committing to purchasing the property will help you to ensure that you are paying the right price for the property and also enable you to negotiate a better deal with the seller if any works are required to be done. The last thing anyone wants is to spend a lot of money in buying a property, only to be stung with nasty surprises down the line, which ends up requiring more money to be spent in putting the defects right.
Summary
Buying a home is not like buying goods during your weekly shopping trip at your local supermarket. If the goods in your trolley are faulty or damaged, you can take them back and ask for a refund or replacement. Unfortunately, it is not that simple when buying your home. Once you have completed your purchase, the property is yours. You will be stuck with any faults or damage that only come to light after you have purchased, together with the cost of putting them right. Buying your home definitely does not come with a money back guarantee.
Having a survey carried out will reduce the risk of this ensuring you are fully aware as to the condition of the property before committing yourself to buying it. Spending a few hundred pounds at the beginning of your purchase may help you to save thousands in the future and negotiate a better deal for your home.
If you are thinking of buying or selling your home or would like further information on surveys or general property advice, please contact Saracens Solicitors on 0207 725 7115.
By Varsha Shah
Residential Conveyancing
Saracens Solicitors
Photo Credit:Images_of_Money
Buying a property at auction | Residential Conveyancing
Looking for a new home? Not enough cash? It’s not all doom and gloom…
With the UK market still suffering from the after affects of the financial meltdown, buying a property at auction is becoming increasingly popular. And why not? The hefty prices charged by estate agents are ever increasing, whereas the auction route can be considerably cheaper – and if you know what you’re doing, you could bag your dream home at a bargain!
Although expense is a prime concern for most, it is the time efficient factor which often attracts home seekers to the auction room. The ‘traditional’ route may take up to 12 weeks to complete and one runs the risk of losing the property at the eleventh hour. The fear of being ‘gazumped’ and more recently ‘gazundered’ after having your heart set on a property can become an issue. Then there are the delays caused by agents, the other side solicitors, third parties in the chain, mortgage companies etc. Not only is this distressing for some, but also very time consuming. However, when buying a property at auction, upon the fall of the hammer, the property is contractually yours. In other words the ‘exchange of contracts’ takes place when the hammer hits the gavel, legally binding all parties, in a second.
But it’s not all good news – the potential pitfalls of buying a property at auction are plenty. Professional bidders consider it a cardinal sin to enter an auction without ascertaining, in advance what their maximum budget is. It is an even bigger sin to exceed that budget, amidst all the hype and excitement of the auction room.
Survey the Property in advance
Prior to the auction date, review the auction catalogue thoroughly. If any particular property attracts the eye, visiting and inspecting that property beforehand should be an obligation – preferably with an architect or a builder. Carry out a structural survey on the property and ascertain its actual value. The cost of a full structural survey can vary between £300 to £1000 but this is money well spent. The survey report will show any defects in the property which are not always visible to the naked eye; potentially saving you thousands of pounds.
Reviewing the legal pack
And it doesn’t end there. If the interest subsists, further enquiries should be made and a legal pack requested. This pack should include the title documents and information on the property generally. A legally trained eye will be able to spot, for example, if any covenants or other burdens exist which may diminish the value of the property. It goes without saying that a solicitor, skilled in the law of property and preferably auctions, should be instructed to review the pack and provide a detailed report.
Put yourself in the seller’s shoes. Why would he / she be selling the property at auction? They may be after a quick sale, but there may be other more sinister reasons. Maybe they believe the property cannot be sold on the open market due to its defects, and that someone will buy it ‘blindly’ at auction. This is where buying a property at auction can be dangerous if you are not fully prepared in advance and do not have professional help. A large quantity of properties listed at auction (in the current market), are those which have been repossessed, eg sold by mortgage companies to raise quick money to pay off outstanding debt on behalf of the borrower. This naturally has implications. The previous owner may have had a poor credit rating and this could mistakably show up on a new purchaser’s record. Again, this is an issue that can be dealt if you know what you are doing and advised by a solicitor.
Get your finances organised early
Another potential pitfall is getting into a pickle with your finances. If a bid is successful, you are expected to pay a 10% deposit immediately with the remainder on completion. Unlike the traditional route, when buying a property at auction, completion (usually) occurs within 28 days or less. Proper planning and negotiation can allow for this date to be extended. Failure to pay the required amount on the completion date however may have serious consequences – you may lose your deposit and be liable to pay damages to compensate the seller.
If a mortgage is needed to fund the purchase, this should be agreed in principal with a mortgage company or through a mortgage broker. Remember that a lender may take as long as 4 weeks (sometimes longer) to provide you with the requisite money, taking you over the agreed completion date. Before any mortgage company / bank lends money it will want to conduct a valuation of the property which itself takes time. Further, if the amount being lent is lower than the mortgagee’s valuation, the difference must be paid out your own pocket. A shortfall at the last minute will therefore jeopardise your purchase. Do not fall into this hole. Obtaining the assistance and advice of professionals before buying a property at auction, is a must.
Bidding on the day
The auction day itself can be an exciting experience but for those new to the environment, equally daunting. Bidders with no experience are advised to proceed with caution and attend a few trial auctions before actually taking part. Beware of the nasty tricks and sleight of hands. The auctioneer may ‘bid off the wall’; ie inventing bids to inflate the purchase price. There may be individuals in the room making ‘dummy’ bids to achieve the same goal. Do not fall for this trap, stay sharp and above all, stick to your budget!
All in all, the auction room remains a great place to bag a bargain. It can save you ample time and reduce a lot of stress. But one must be careful. Do your research and be prepared.
Summary
To discuss buying property at auction (or indeed selling a property in the same way), or to discuss your options going forward, seek legal advise from our residential conveyancing team. We are recommended by a number of bank managers due to the professionalism and many years of experience within the team. Our business is built on providing clear and concise legal advice. We will do whatever we can to ensure that your transaction runs as quick and smoothly as possible, with the minimum amount of stress.
Varsha Shah
Head of Residential Conveyancing
Saracens Solicitors
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