A Word from the Professionals
RPS has asked local professionals, such as accountants, solicitors and surveyors to provide some advice for those looking to purchase a property.

House Purchasing
Philip Smith, Chartered Building Surveyor

A house purchase is most people's largest single purchase within a lifetime and the legal situation when purchasing a house is that the onus is on the purchaser to satisfy themselves regarding the condition and suitability of the property. Although a pre-purchase survey may seem to be yet another cost at this time, it is usually money well spent. Hopefully, the results of the survey will not stop the sale of the house but it must always be preferable to be fully aware of any shortcomings of the property before taking the decision to proceed with the purchase. Sometimes, defects which become apparent during a survey will provide some scope for re-negotiation of the price.

The Royal Institution of Chartered Surveyors, the Consumers Association Which? Magazine and the Council of Mortgage Lenders recommend that, even if you are already paying for a Mortgage Valuation Report, “it is advisable and prudent to arrange a survey by your own surveyor”. The reason for this is that the Mortgage Valuation Survey is prepared for the lender – not for you, the borrower. It answers the lender's questions concerning the appropriate security for your loan – that is to say, it confirms that they would be able to recoup their loan if you were to default on the mortgage payments. You cannot rely upon it to answer the questions which concern your personal interests.

The convevancing process
Geoffrey Ridley, Senior Partner, Nicholson Portnell

Theoretically the conveyancing transaction is quite simple. The seller's Solicitor prepares the contract documents and submits them to the buyers Solicitor.

The buyers Solicitor checks the contract documents and raises any inquiries he has with the seller's Solicitor, makes searches with the local authority the water board etc, and makes sure the buyers finance is in order. A completion date is agreed and contracts are then exchanged and on the completion date the buyer pays over the money and the seller moves out. Simple you say!

Unfortunately your seller is generally buying another property and the buyer is selling another property and this sequence is repeated until you find a buyer who has nothing to sell and a seller who has nothing to buy. This linking of transactions is called "a chain". In a chain there are two important stages (1) exchange of contract and (2) completion. Exchange of contracts is the operation that converts the informal acceptance of an offer into a binding legal contract.

At that stage the seller is bound legally to sell the property to the buyer and the buyer is bound to pay to the seller the contract price. Completion is the date when the transaction is finalised, the seller gets his money and the buyer gets the property.

In a chain there may be as many as 18 or 20 properties and before there can be an exchange of contract each of the buyers must have the finance in order and have completed all their inquiries and searches. Equally all the parties must agree the same completion date.

This can be a major problem and I know of one case where the seller at the head of the chain was selling for £250,000, but the seller at the bottom of the chain could not find a buyer for his property at £30,000 and so nobody could proceed. To break the deadlock the seller at the top of the chain agreed to buy the property at the bottom £30,000. The transaction then went ahead and the seller at the top of the chain resold the £30,000 property for £35,000.

You will see that the process can be a minefield and it is the job of your Solicitor to guide you through this, sort out the problems on the chain and ensure that you reach completion date in one piece.

An article in the Hexham Courant, written by Geoffrey Ridley , Senior Partner, Nicholson Portnell (25/4/2003)

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