Buying a Home for Cash (without mortgage)

Blogs - Conveyancing

What is involved in the purchasing process? 

Local Authority Searches

Local Authority searches are an essential part of the home buying and conveyancing process. The information they reveal can be used to renegotiate your offer and may even make you pull out of the purchase. They are an essential requirement for mortgage lenders.

There are two parts to a local authority search.

The first part covers any charges or restrictions relating to land or property. These can include whether the property is:

• a listed building
• located in a conservation area
• subject to a tree protection order
• in need of an improvement or renovation grant
• or situated in a smoke control zone.

The form also covers planning agreements and conditional planning permissions.

The second part of the search supplies information relating to public highways, proposals for new roads, rail schemes or planning decisions that could affect the property, as well as outstanding statutory notices, breaches of planning or building regulations or the existence of a compulsory purchase order.

The fee for a local authority search varies from authority to authority but is on average £150 to £200.

There are a number of additional reports that are not covered by the standard local authority search and are, therefore, subject to extra fees (say £15 each optional enquiry):

• Environmental searches (to determine a risk of flooding for example, as well as the proximity of any waste sites or potentially contaminated sites).
• Water authority searches (which show any public sewers within the boundaries of the property which could impact upon future building or development)
• Chancel Repair reports (to determine if your property is liable for church repair contributions).

The relevance of the optional searches will depend on where the property is located.

The government target for returning local searches is a maximum of 10 working days but it can take longer, and the time taken varies from authority to authority. Some authorities are taking much longer. Cash buyers do not necessarily have to conduct Local Authority searches, but it is advisable to do so.

In some cases, No Search Indemnity Insurance can be purchased as an alternative.

Survey

You should commission your own house survey to evaluate the condition of the property and alert you to any potential problems you might face once you move in. Unless you are very experienced with property, it is advisable to get a survey done.

A house survey is an inspection of a property’s condition conducted by an expert surveyor. The surveyor inspects the property and tells you if there are any issues to do with the condition of the property from minor to significant structural problems. They will highlight what repairs or alterations are needed, whether it’s addressing a damp patch or replacing a whole roof. The report from the surveyor also provides expert commentary on the property, from the type of walls to the type of glazing.

It is the home buyer who usually organises a house survey after their offer has been accepted by the seller. The buyer arranges and pays for the survey.

You don’t need to get a survey done on the property you are buying. But a survey can help you avoid expensive and unwanted surprises, like an unexpected rewiring job, as well as giving you peace of mind.

With the information from the survey, you might reconsider whether to buy the property or use the unbiased information you have obtained to renegotiate the price. If you find for example it needs £20,000 of roof repairs, it is reasonable to ask for £20,000 off the price. Alternatively, you might ask the seller to fix any problems before you buy.

Title

We as your solicitor will investigate the sellers’ title to confirm that they have the legal right to sell the property. We will also inform you of any other interests that affect the property and may have a detrimental effect on your ability to use the property, rights of way over the property for example.

Enquiries

Enquiries are raised with the sellers’ solicitor which will hopefully disclose detailed practical information about the property of which the seller is aware. Standard forms of enquiries issued by the Law Society are completed by the seller with information on a wide range of topics, including responsibility for boundaries, mains services, neighbour disputes etc.

Non-standard specific enquiries can also be raised where issues arise out of the sellers’ title or the search results.

Investigating title and raising enquiries can be time consuming but like the survey is an essential part of the home buying process if you want peace of mind for the future.

The principle of ‘caveat emptor’ (Latin for – “let the buyer beware”) applies when you buy a home – meaning it is the buyer’s responsible for checking the quality and suitability of the property before purchasing it.

Deposit

Before you can exchange contracts, you need to arrange a deposit of the sale price of the property and transfer it to us. The standard amount of deposit is 10% but in some cases 5% will be acceptable.

Exchange contracts

Before you exchange contracts, you need to agree a completion date with the seller, usually about four weeks after the exchange. When you exchange contracts with the seller you become legally committed to buying the property and they are legally committed to selling it to you.

If you pull out after this without due reason, your 10% deposit can be forfeited. Arrangements must have been made for the deposit before contracts can be exchanged.

You should only exchange contracts after you have received the surveyors report, and any necessary action has been taken and you are satisfied regarding all searches and enquiries raised.

The contract is signed by all parties prior to exchange. It states the completion date and the amount of the deposit and the balance of purchase price due on completion.

Buildings Insurance

You need to ensure that you take out buildings’ insurance for the property from the date of exchange, as you are responsible for it from then on.

Completion

Completion is when you pay for the property and take ownership of it, and it usually takes place at a certain time of day – often midday.

Before completion we prepare the transfer document TR1 which has to be approved by the sellers’ solicitor and signed by all parties before completion. An amount to cover Land Registry fees and Stamp Duty as well as the balance of the purchase price must be paid to your solicitor prior to completion.

On the day of completion, the money is transferred to the seller’s solicitors, and they send the dated transfer document (TR1) signed by the sellers to the purchasers’ solicitors.

Post Completion 

Your solicitors send the TR1 document and an application to register the transaction to the Land Registry for the previous owners’ name to be removed and add your name to be added as registered proprietor. The LR registration fee and the Stamp duty Land Tax must be paid before the Land Registry will register the transfer.

Stamp Duty 

Stamp duty is always paid by the home buyer, not the seller. Usually, it is paid as part of the purchase process. In England and Northern Ireland, from 23rd September 2022, no stamp duty will be paid on the first £250,000 of the property’s value. First time buyers pay no stamp duty on the first £425,000 of the property’s value.

Stamp duty rates in England and Northern Ireland from September 23rd, 2022:

• 0% up to £250,000 (but 3% for an ‘additional property’)
• 5% on a property worth £250,001 to £925,000 (or 8% on ‘additional properties’)

If you are also selling a property, it is important to co-ordinate the sale and purchase so that you are not buying an ‘additional property’ and therefore do not have to pay Stamp Duty at the higher rate for an ‘additional property’.

Fees and Disbursements

An amount towards solicitors’ costs of purchase will normally be payable on account at the commencement of the transaction with the remainder of the costs being payable prior to completion. Disbursements (expenses) of purchase are charged in addition to solicitor’s costs of purchase and are payable in advance on request.

Disbursements include but are not limited to:

• Local Authority search fees
• AML and Bankruptcy search fees
• Bank Transfer fees
• Land Registry fees
• Stamp Duty Land Tax

If you have any enquiries regarding buying a new property for cash, please contact us on 020 8240 9018 or submit the enquiry form on our website.