Listed below are some of the most common questions that people have when buying, selling or remortgaging a property. Browse through the list or use the drop down box to select a question.

What is "Exchange"?

This is when you become legally bound to buy/sell and a date for moving is finalised. It is actually when each sides solicitors swap contracts so that they each hold the contract signed by the other's client. In practice solicitors agree to exchange over the telephone and give an undertaking to post the contracts that day. NOTE: It is not the date that you sign but the date the contracts are exchanged that is important.

What happens on Exchange?

The price is fixed , a deposit paid to the seller, the terms agreed (e.g. carpets included) and the date for moving is confirmed. It is too late to back out once contracts are exchanged.

Am I legally bound when I sign the contract?

Technically no, it is when contracts are exchanged with the other side. However you should not sign until you are ready to go ahead and have everything in place. Sometimes for convenience you might sign earlier but give your solicitor specific instructions as to when you will be ready to proceed

What is Completion?

This is the day the money is actually handed over and the property changes hands. It is the day you are legally obliged to move. It is often confused with Exchange of Contracts which is the day you legally agree to buy.

What does my solicitor do after I instruct him on my Sale?

In a typical sale transaction he:

• confirms the sale details with the estate agent
• writes to the other solicitor to confirm the buyer's intentions
• writes to your lender for the deeds
• obtains confirmation of the amount owed on your mortgage(s)
• prepares the contract from the deeds and sends a copy to buyers solicitor
• sends you a list of questions regarding your property and converts your replies into a formal legal response to the other side
• co-ordinates the timing of your sale with your purchase (if any)
• agrees a final contract
• meets with you to explain and sign contract (sometimes done by post)
• exchanges contract after agreeing moving dates with you
• obtains the estate agents' bill and gets your approval of it
• approves the Transfer deed prepared by the buyer's solicitor
• receives the sales money from the buyer's solicitor
• pays off your old mortgage(s) from the proceeds
• pays the estate agent from the proceeds
• deducts any legal fees payable (by prior approval with you)
• pays any balance to you (or toward your purchase)
• obtains a formal receipt from your old lender
• send the deeds to the buyer's solicitor
• handles numerous telephone calls from all involved in the chain!

What does my solicitor do after I instruct him on my Purchase?

In a typical purchase transaction he:

• confirms the sale details with the estate agent
• writes to the other solicitor to request a contract
• submits a list of questions about property to seller's solicitor
• discusses/forwards replies to list of questions to you for approval
• checks the contract terms and agrees changes if necessary
• checks the property out with the local authority (Local Search)
• submits other searches as required (e.g. mining search)
• checks the buyer owns the property
• checks for any restrictions on the property
• checks what loans are secured against the property and gets confirmation that these will be paid off
• checks the terms of your mortgage offer and represents the interest of your lender in their financing of the purchase
• agrees a final contract
• meets with you to explain and sign contract (sometimes done by post)
• exchanges contract after agreeing moving dates with you
• prepares the purchase deed (Transfer)
• prepares the mortgage deeds for you signature
• undertakes a search at Land Registry
• undertakes a bankruptcy search against you on behalf of your lender
• reports to your lender and requests money
• draws up a full financial statement for you approval
• receives money from lender
• pays the purchase price to the seller's solicitor
• pays the Stamp Duty (if any)
• registers your purchase with the Land Registry and pays their fee
• deducts any legal fees payable (by prior approval with you)
• pays any balance to you
• handles numerous telephone calls from all involved in the chain!

Do I have to pay off my mortgage before I can sell my house?

Yes, all mortgages or other loans secured on your house will have to be paid off. This is usually done by your solicitor from the sale money on the day of completion.

Do I have to pay off other loans before I can move?

Check whether that loan for the new kitchen is a "secured loan" or not. If the lender can't tell you whether it is secured your solicitor can check at the Land Registry for a small fee. ALL SECURED LOANS must be paid off; this could be out of the sale proceeds. Some secured second loans can sometimes be transferred but this requires the consent of you new mortgage lender and the old loan company so it can be messy and time-consuming and is best avoided.

What time do I have to be out my house?

This is set in the contract, typically it is a time between 12 and 2.30pm on the day of completion. Check with your solicitor what time is being agreed when you sign the contract.

Can I move out after completion?

If you are selling you must legally leave on the day of completion by the time specified in the contract (assuming the buyers have paid the money). If completion is on a Friday, it is not unknown for buyers and sellers to agree various times over the week-end to move but this would technically be both a breach of contract and mortgage conditions and is not advised.

What time can I get the keys and move in?

The keys are normally released when the money is received by the seller's solicitor. The time for moving in is set out in the contract.

How is the money paid on completion?

Normally, your solicitor will send and receive money through the banking telegraphic transfer system (e.g. CHAPS, BACS). This is to ensure that all the transactions get done in a day. However there can be delays at popular times (e.g. last Friday in the month, Fridays before bank holidays - which are popular times to move). The banks charge a fee for sending these which is shown in our quotation (Purchase quote).

When do I have to pay my legal fees?

Unless there are special reasons you have to pay so that your solicitor has cleared funds before completion.

When do I have to pay for my new house?

You have to pay so that your solicitor has cleared funds before completion. If the solicitor does not have cleared funds he is not allowed to complete because to do so would mean using other clients' cleared funds. It is essential that you ensure that you can get at the money you are using for your purchase quickly. If it is on long term deposit transfer it to another account so it will be available at short notice. You will be given a statement shortly after exchange and expected to pay four or five days before completion (or the day before if you use direct funds transfer/telegraphic transfer).

What happens if I do not have cleared funds?

Like anything else, you can't have it until you have paid for it. If cannot move because your money isn't cleared then you will probably have to pay penalty interest to the seller (usually 4% above bank base rate). Your solicitor might be able to arrange a closed bridging loan via his bank but there will be an arrangement fee and extra interest to pay. Be prepared and get your money to your solicitor in plenty of time, even if you are having a 100% mortgage there will probably be some fees or guarantee insurance payable.

Do I have to pay a reservation deposit?

There is no legal requirement to pay a reservation deposit to an estate agent and any paid is returnable if you do not proceed. It does not guarantee anything and you could still be gazumped - so why pay one? However, if you are buying a newly built house then you will be asked to sign a reservation agreement and pay a small deposit (usually no more than £250), in this case the agreement normally makes it clear that the deposit is NOT refundable. In the latter case you are buying a reservation period and the builders are guaranteeing not to sell to anyone else in that time. In either case any deposit paid is deducted from the total purchase price payable

Do I have to pay a reservation deposit on Exchange?

Legally a 10% deposit is payable on exchange of contracts. It is up to the seller whether he accepts less. Often a seller will accept the deposit his buyer is receiving on their own sale. First-time buyers who are getting more that a 90% mortgage usually pay the difference between the purchase price and the mortgage (e.g. if mortgage is 95% deposit is 5%). Whatever is actually paid your liability is for 10% (see What if I don't complete after exchanging?)

Do I have to exchange on my Sale and Purchase at the same time?

Yes, because you are legally obliged to do the deal once you exchange. If your solicitor does not co-ordinate the exchanges you could end up with two houses or none. It is this co-ordination that takes up much of your solicitors time, especially when you are involved in a long chain. You can imagine how many telephone calls are involved in agreeing a moving date in a chain of ten properties, especially when the estate agents, mortgage brokers and other interested parties are all calling to see "how it's going" as well as the clients.

When do I start paying my mortgage?

This depending on your mortgage lender so you will need to ask if it is not stipulated on your mortgage offer. Usually you will start paying a month after completion. Some lenders give you a specific date each month others let you choose. If your given date is inconvenient then ask your lender to change it. Beware that some lenders charge you more than a month on your first payment (e.g. you complete on the 18th July your payment on the 18th August might be for 45 days not one month because you are paying for the remainder of July and ALL of August. Thereafter it will settle to the normal monthly payment?)

When do I cancel payments on my old mortgage?

Do not cancel any direct debts or standing orders until you have exchanged contracts. Assuming that completion is set to take place within a couple of weeks you should then cancel. Your solicitor will obtain a statement from your lender as to how much is own and it will state the date of the last payment received. There is sometimes some delay in payments being credited to your account so you should check whether your last payment is taken into account. If not, so lenders will accept less on completion, others will make a refund after completion when the funds are credited to your account.

How long does it take?

The real answer is until everyone involved in the chain is ready. You cannot exchange on a purchase until you have signed a contract, received replies to standard enquires, have a written mortgage offer, have a deposit, have the search results and you have agreed a moving date with your seller (and your own buyer if applicable). Typically you can move four to six weeks after agreeing the deal but it only takes one person in the chain to delay it for everyone concerned. Once exchanged it should ideally be at least two weeks until you complete to give time for you to get cleared funds to your solicitor, mortgage money from your lender and get the results of the final searches. It is not unknown for contracts to be exchanged and completed on the same day, however this means all the preparation is done beforehand and extra costs will be involved if it does not go ahead as anticipated.

What if I don't complete after exchanging?

Once you have Exchanged Contracts you must complete your sale/purchase. If you fail to move out your purchaser can sue you for all the additional costs involved in him finding an alternative property and temporary accommodation in the meantime. If you fail to complete your purchase then you lose any deposit you have paid and are liable to pay at least 10% of the price (less any deposit paid) plus any loss the seller incurs in reselling to somebody else plus interest and extra legal fees. Basically you have to complete.

Is there a best time to Complete?

Not really but see Beware monthly interest. If you can avoid the last Friday in the month then do so because this is a popular time and therefore removals , etc are difficult to get. Basically give yourself as much time between exchange and completion as you need to get everything done. Your solicitor would prefer at least two weeks if possible. The less rushed you are the easier and less fraught things become.

Beware monthly interest!

Beware monthly interest when agreeing a moving (completion) date. Some lenders (Stroud & Swindon Building Society and Cheltenham & Gloucester PLC to name two but there are others) charge interest on a monthly basis. So if you complete on say the 4th May you will be charged interest on your old loan for the whole of May and on your new loan from the 4th May therefore paying twice for May! If your old lender charges a daily rate then there is no problem. If your new lender charges a monthly rate check how this is to be applied, you don't want to have to pay for the whole of May if you only receive the money and move on the 28th

What is a Contract?

A contract is a legally binding agreement signed by both the buyer and seller. It contains the terms which you have agreed including the moving date and price. Usually there are two copies and each party signs one copy and exchanges it with the other, hence the term Exchange of Contracts

What is a Transfer?

This is the modern deed for actually transferring the property from the seller to the buyer. There is only one copy which must be signed by the seller before completion. The buyer is normally asked to sign it as well although this is only strictly legally necessary in some circumstances.

What is An Assignment?

This is an old style deed which is no practically defunct as it applies to unregistered land leasehold land. There is only one copy and it has the same effect as a transfer but is almost always signed by both buyer and seller.

What is a Conveyance?

This is an old style deed which is no practically defunct as it applies to unregistered land freehold land. It has the same effect as a Transfer Deed. There is only one copy which must be signed by the seller before completion. The buyer is normally asked to sign it as well although this is only strictly legally necessary in some circumstances.

What is Registered Land?

In 1925 the government decided to set up a nation-wide registry of land and property owners. Over the last forty years various areas of the country were obliged to register ownership when the property changed hands or the house was remortgaged. The rules now apply to the whole country but there are still a number of properties that are unregistered because they have not changed hands since it became compulsory in their area. There are now over a dozen regional land registries which keep details of the owners, mortgages and restrictions on every registered property. A fee is paid to H M Land Registry by the buyer every time the property changes hands.

Is it more expensive to buy Unregistered Land?.

Most solicitors do not charge extra for dealing with unregistered land any more nor do the land registry. A larger fee used to be payable if the property was previously unregistered but this is no longer the case. A few additional searches are usually necessary but these are only a few pounds. It is however cheaper to remortgage previously registered land than unregistered because the full registration fee is payable for unregistered land whereas a much reduced fee is payable if the property is already registered but you are just changing mortgages

What are Cleared Funds?

Money that has cleared through the bank and is available to spend. Cheques can take three to ten days to become "cleared" depending on the bank receiving the cheque, bankers' drafts also take three or more days to clear although they are guaranteed (except for fraud). If time is short, the quickest way to transfer money is a CHAPS or BACS transfer, also known as a telegraphic transfer, this is normally treated as cleared funds immediately although technically it still has to go through clearing. Banks charge a fee to send these (normally between £15 and £30) but that is much cheaper than risking your house purchase.

Disclaimer: These questions and answers are intended as a guide only and do not form any part of a contract between you and your solicitor. These rules only apply to properties situated in England and Wales; different laws and practice apply in Scotland, Ireland and the Channel Isles. These guidelines are believed to be accurate at the time of compilation (August 2000) but no warranty is given and you should get advice from your solicitor before taking any steps that might prejudice you.