Legal Brokers Ltd

Wednesday 20 September 2017

Glossary

The Completion Date.

 

This is the point at which ownership of the property is transferred from the seller of the property to the buyer.

 

The date itself is agreed between yourself, your solicitor & the "other side"

Because there is a certain amount of negotiation involved, with this Date, please don't organise removal firms etc until your solicitor has named the day!

 

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Exchange Of Contracts.

 

At the point at which your solicitor confirms that Contracts have been Exchanged the process becomes "legally binding".

 

Hence the Seller must sell and the Buyer must buy. The two solicitors (for the Seller & Purchaser) Exchange Contracts over the Telephone.

 

Until Contracts are Exchanged NOTHING is binding upon either party.

 

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The Deposit.

 

This is the amount of money the Solicitor will ask for prior to Exchange of Contracts. Usually you'll be asked for the money about a week in advance of the Exchange.

 

Under normal circumstances the Deposit will be between 5 to 10% of the Purchase price.

 

If the transaction falls through, after Exchange, you may forfeit your deposit as a penalty.

 

Additionally you may be liable to pay Compensation to the "other side".

 

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The Contract.

 

This is the written Agreement between the Buyer and the Seller.

 

As a confirmation to all parties the Contract confirms the agreed price, details about the property itself and the names of the two parties involved in the process.

 

Each party signs their own copy of the Contract. When both parties are ready to legally commit to the transaction the two Contracts are Exchanged.

 

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The Title Deeds.

 

These act as proof that the individual selling the property is entitled to actually sell the property. It also confirms any rights or obligations associated with the property.

 

In the past your bank or building society may have held the Title Deeds. It's more the case these days that the Title Deeds will be sent to you on Completion - please keep them safe.

 

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The Transfer Deed.

 

This is the document that transfers the ownership of the property from the seller to the buyer.

 

It lists the Completion date and is sent to the Land Registry after Completion takes place. The Land Registry need this document in order to change their records and show the buyer as the new owner of the property.

 

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The Land Registry.

 

An entity set up in 1925 which retains details of who owns the land.

 

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The Title

 

Freehold.

 

Ownership of both the property and the land it stands on.

 

Leasehold.

 

Ownership of the property but not the land on which it stands.

 

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The Legal Fee.

 

This should simply be the cost the solicitor charges you to act on your behalf.

It's important, before signing up with a Solicitor, to confirm what you're actually getting for your money.

 

Solicitors can sometimes list "supplemental" fees as a method of hiding their true fees - it's worth clarifying these costs at the outset.


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The Search or Searches

 

These are designed to provide relevant facts about the area surrounding the property you are buying.

 

Issues such as who maintains the roads (adopted vs unadopted), whether there have been any recent planning applications as well as a number of other things are detailed.

 

In certain situations (depending upon your Lender, the recommendations of your solicitor and your area) you maybe asked to pay for a number of specialist Searches.

 

Commonly these maybe Environmental, Drainage, Coal Mining or Chancel searches etc.

 

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The Mortgage.

 

This is the "loan" used to purchase the property. You cannot sell the property without paying off the mortgage.

 

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Redemption.

 

The final payment of the mortgage.

 

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Redemption Fee.

 

This is a penalty you may incur if you "redeem" the mortgage early. Your Lender should be able to confirm the amount owed.


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Stamp Duty.

 

A tax levied by the government. The Threshold is periodically lifted but at present it only starts for properties above £125,000.

 

If you pay from £125,001 to £250,000 then the stamp duty is charged at 1% on the whole of the purchase price. From £250,001 to £500,000 it is charged at 3%, and above £500,001 it is charged at 5%.

 

Very unpleasant!


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The Survey.

 

This is the report prepared by your Surveyor on behalf of the Lender. It confirms the physical state of the property.

 

In general terms there are three types of survey; The basic is the "Building Society Valuation". The intermediate survey is the "House Buyers report". The most comprehensive survey is the "Full Stuctural survey ".

 

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