Mortgage offer

Unless the Valuation Report is adverse the lender will now make an offer of advance based upon the valuation of the property or the purchase price, whichever is the lower. The vendor's conveyancer prepares a draft contract, which is submitted to your conveyancer. If the contract is not acceptable, it must be developed until it is acceptable to you, the vendor; the purchaser; and usually the lender. There aren't usually any problems with this as contracts are mainly standard.

 

Exchange contracts

At this point the vendor and the purchaser each sign a copy of the contract which is interchanged between their respective conveyancers /solicitors. The acquire of the property usually becomes irreversible once this has occurred. It will therefore only take place when the purchaser's conveyancer is contented with all details such as searches, legal title (does the vendor actually own the property?) and so on.

A down payment, usually 5-10 per cent of the purchase price, is now sometimes paid to the seller 's conveyancer, and this is usually non-returnable. As the transaction is now unchangeable, you are committed to completing the purchase come what may. You must therefore guarantee that the property has adequate buildings insurance from the day of exchange - if the property is damaged in any way a claim could be made against you.

Similarly as you are now committed to the purchase of the property it is also important that the mortgage loan is now available and/or life assurance protection arranged from that date.

 

Completion

The property finally changes ownership on a date which will have been specified in the contract - usually a month after exchange of contracts. Your conveyancer will arrange for the mortgage monies to be paid over to the seller, and you take actions to collect the keys of the property.