LEGAL ISSUES TO CONSIDER WHEN I’M BUYING OR SELLING A PROPERTY
WHY SHOULD I USE A SOLICITOR?â¨ Property transactions are sometimes quite complicated. They are probably the biggest and most expensive transaction that people ever enter into. Using a good firm of Solicitors will give peace of mind during the property transaction.
WHAT DOES A SOLICITOR ACTUALLY DO?â¨ There genuinely is a tremendous amount of legal work involved, particularly when purchasing a property. Please refer to our BASIC PROCEDURE page.
SOLICITORS COSTS Solicitor’s costs are nowadays actually exceptionally good value for money with propertyÂ bearing in mind the huge amount of legal work that is involved. Solicitor’s costs are probably similar to what they were ten years ago and have not even gone up with inflation. Most Solicitors fees are often only a small fraction of estate agents fees.
WHAT ARE DISBURSEMENTS? It is often the disbursements (the other expenses) that the solicitors pay to other organisations, which make up the majority of the legal costs involved for buying or selling property. Common disbursements include Stamp Duty, Land Registry fees, and Search fees.
WHAT IS STAMP DUTY? Stamp Duty is quite simply a government tax on the transfer of land. Current rates are as follows.â¨ It is payable on transactions at 1% of the value of properties over Â£60,000 but under Â£250,000. â¨If the value exceeds Â£250,000 but is less than Â£500,000 then the Stamp Duty is 3% of the property value.â¨ Property where the value is over Â£500,000 then the Stamp Duty is 4% of the property value. The buyer by law must complete a Property Land Transaction Return and pay Stamp Duty within 30 days of completion.
WHAT IS THE H.M. LAND REGISTRYâ¨? The Land Registry is a government department that documents and records details of all titles to land and issues certificates guaranteeing the title when it is registered. Think of it as being a similar set up to the D.V.L.A. Every property transaction must be registered and a fee is payable on registration by the buyer.
H.M. LAND REGISTRY FEES Land Registry fees vary depending on the price of your new property. They can be from as little as Â£40 but usually more in the range of Â£100 to Â£200 (if you are buying in the Â£70,000 – Â£200,000 price range).
WHAT SEARCHES HAVE TO BE MADE? A number of searches have to be carried out by the solicitor acting for the buyer of a property. These include the Local Search, Water Search, Land Registry Search, Official Search, Bankruptcy search, and sometimes a Mining Search.
WHAT IS A LOCAL SEARCH? This is mainly a search against the local authority’s records relating to the property. This includes checking planning permissions, building regulation approvals, proposed developments in the area, that the drains are connected to the mains, that the road has been adopted and all sorts of other queries.
HOW WILL I FINANCE THE PROPERTY TRANSACTION? One of the first matters a purchaser has to consider when buying property is how they are going to pay for it. Very few people have the resources to be able to buy property outright. Most of us have to arrange some form of finance usually by way of a loan or a mortgage. There are all sorts of mortgages available. We really cannot provide any detailed advice as to these. We highly recommend you seek advice from an Independent Financial Advisor. The main types are Repayment, Endowment and Pension mortgages.
DO I NEED A PROPERTY SURVEYS? Mortgage providers will always require a valuation and survey to be carried out against the property. A qualified valuer and surveyor usually carry this out. The report will detail any defects and problems and of course provide the surveyors opinion of the value of the property. The costs of the survey and report have to be paid by the purchaser. We always recommend that a full and comprehensive survey and report be carried out prior to the purchase of any property whether a mortgage is being obtained or not. These can cost anything up to Â£500.00 but they are well worth it.
WILL I HAVE TO PAY ESTATE AGENTS FEES? Almost all estate agents work on a “No Sale No Fee” basis. The seller, not the purchaser, of course, pays the fees. Fees are based on a commission of anything between 1% and 3% plus VAT of the sale price.