I have had an offer on a home accepted - what happens next?
One-third of property sales in the UK fall through. What is the process after an offer has been accepted and what can buyers do to make sure their purchase completes without delay?
1. Insist that the seller takes the property off the market
Even after your offer has been accepted, the seller is not legally obliged to sell the property until contracts exchange - usually 2 – 3 months after the offer.
You can be months into the conveyancing process, having spent thousands of pounds on surveys and mortgage application fees, and the seller can still accept offers from another buyer (gazumping).
Make your offer conditional on the seller taking the property off the market.
The seller will likely refuse if your property is not yet on the market. They might even resist if you haven't found a buyer for your property.
Do all you can to put yourself in a 'ready to proceed' position as quickly as possible. Once your property is on the market or you accept an offer, you should then insist that the seller takes their property off the market.
Ask the seller's estate agent to:
- confirm, in writing, that the property has been taken off the market and that all marketing activity will cease
- put a 'Sold STC' sticker on the for sale sign
- update the particulars in the agent's window to 'Sold STC"
- update the details on the property portals (Rightmove, Zoopla etc.) to 'Sold STC'
2. Instruct a conveyancing solicitor.
You will need a solicitor or conveyancer to handle the legal work for your purchase.
Once your offer is accepted, the agent will ask for your solicitors’ details. If you do not have yet have a solicitor, the agent will probably refer one.
You will need to act quickly. Not having a solicitor at this stage might prompt the seller to question your commitment. Nevertheless, you should think twice before accepting the agent’s referral.
Shop around, get a recommendation from family or friends, read reviews.
The right solicitor can be the difference between a stress-free move and an expensive stressful process that results in the purchase falling through.
If you have not yet found a property to buy, consider instructing a solicitor in advance, so you are ready to go when you do find a buyer.
3. Choose the best mortgage product
It takes between 4 and 8 weeks from acceptance of an offer, to get a formal mortgage offer.
Ideally, you will already have chosen a mortgage lender. Better still, you will have asked the lender for a Decision in Principle (DIP). A DIP means that the lender has indicated that they are happy to lend to you, subject to the property meeting their lending criteria,
A DIP can significantly speed up the mortgage offer and it will demonstrate to the seller that you are serious about proceeding quickly.
If you have not yet arranged your finances, you need to move quickly.
You could compare mortgages on an online comparison site. However, if you have left it a bit late you could speak to a mortgage broker who may be able to help fast track your application. Either way, let then seller know what you are doing. Proactive communication can buy a lot of goodwill.
What information will the lender need?
Each lender has its own mortgage application process. Applications can be rigorous and you will need to provide information including:
- Proof of ID
- Recent bank statements
- Proof of address
- Proof of earnings (P60), proof of bonuses/commission etc
- Last 3 years accounts or tax returns if self-employed
- Proof of employment status
- Consent to check your credit history
- Details of existing debt
- Details of your outgoings
- Details of your deposit and where it is coming from
- Your status on the electoral roll.
- Your partner's details and credit history – even if they are not buying with you.
- A gift letter if the deposit is a gift from a family member
4. Arrange the property survey
A property survey will let you know exactly what state the property you want to buy is in. If the surveyor spots any defects in the property you will be able to act accordingly.
You do not have to have a survey (around 50% of buyer's don't) but it is strongly advised that you do.
A survey costs around £500 and can prevent you from buying a property with serious defects or structural issues. A survey can also be used as the basis for a renegotiation with the seller if costly to fix problems are identified.
Not to be confused with a property survey, your lender will carry out a mortgage valuation to ensure your new home is worth what you are paying. The lender will need to be satisfied that the property offers sufficient security for the loan. It is carried out for the benefit of the lender.
You should not rely on the valuation survey as an indication of the property’s suitability or structural integrity.
Should I use the mortgage lender’s surveyor?
The lenders appointed valuation surveyor may be able to carry out a HomeBuyer Report or Building Survey at the same time as the valuation.
This may be a cheaper and faster option. Arguably, there is a conflict of interest in using the lender's surveyor. Ideally, you should instruct an independent surveyor who is acting for you and you alone. However, if the availability of surveyors could risk slowing the sale process down, using the lender's surveyor may be a better option.
5. The conveyancing process
Once you have had an offer accepted, your solicitor will receive an initial contract pack from the seller’s solicitor. This pack contains a comprehensive set of property forms and legal documents from the seller.
Your solicitor will review these documents and raise further enquiries about the property. Your solicitor will also need to obtain various property searches. If the property is leasehold, the solicitor will need to review the lease and the management information provided by the freeholder.
Once all of the information has been collated and reviewed, the solicitor will investigate the legal title of the property, review the contract of sale and report back to you with their findings and recommendations on how to proceed.
Throughout the conveyancing process, your solicitor will be communicating with numerous parties including the buyer, the mortgage lender, the estate agent, the seller's solicitor and the local authority.
Everything must be timed and coordinated to complete in concert with the seller and all other parties in the property chain.
Once the solicitor has carried out the necessary due diligence into the property, they will report back to you.
Assuming that you and anyone else in the property chain, are happy to go ahead, and you have the formal mortgage offer in place, the next step is to exchange contracts.
Exchanging contracts means you will be legally obliged to buy the property, and the seller is legally obliged to sell it to you.
You will need to pay the deposit to your solicitor (usually 10% of the purchase price) on exchange. If you do not subsequently complete on the purchase, you would lose this deposit.
You can now agree on a completion date when you can move into your new home. The period between exchange and completion is usually between 5-20 working days, allow you time to organise dates with the removal company.
As the buyer, you are responsible for the buildings insurance on the property between exchange and completion. This will need to be arranged before you can exchange.
On completion day:
- The transfer deed will be signed by the seller, transferring ownership to you (you may need to sign this too).
- Your solicitor will transfer the full funds to the seller and receive the title deeds.
- Your solicitor will file a Stamp Duty return form with HMRC and arrange for the Stamp Duty to be paid.
- Your solicitor will register you as the new owner at HM Land Registry.
- The estate agent will release the keys to you.
The completion deadline is usually 3.30 pm, as large payments are transferred via CHAPS, and this is the time at which the banking system for this closes.
Your next step
If you are buying, selling, remortgaging or transferring equity in a home, we can help you find an expert conveyancing solicitor.
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