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Investing in a property and taking out a mortgage is easily one of the most significant financial transactions you’ll ever make, so it’s worth making sure you do it right. Whether you’re a first-time buyer, moving to accommodate a growing family or interested in buy-to-let, it’s vitally important to obtain legal support to ensure as smooth a process as possible.
With that in mind, here are some of our top legal tips that you should be aware of before making any big decisions…
- When choosing your solicitor and conveyancers, bear in mind they don’t need to be a local firm – sometimes it can be cheaper to choose somewhere further afield, and most communication can be done via phone and email.
- Don’t automatically use your estate agent or property builder’s recommended firms for mortgages, solicitors and conveyancers. Usually, their recommendation is commission based. Use their quotes as a benchmark and find alternatives to find the best value for money.
- Check your chosen solicitors are regulated by a professional body (Law Society affiliated), such as Shropshire based residential property solicitors
- Make sure you’re aware of all the legal costs involved, in advance. Your chosen solicitors will be able to give you quotes for the full process, allowing you to avoid any hidden charges for extras like processing stamp duty forms, ID verification, disbursements, etc. Take this into account when weighing up different quotes.
- Learn as much as you can about the property you want to buy in advance. Use online tools to review information already available on properties from previous sales data, or look into crime rates and assess flood risks. That way, you can ask your solicitor to look into specific issues you may find.
- Use a Stamp Duty Calculator to find out how much you’ll be required to pay in advance of the purchase. If you’re buying a property for more than £125,000, you need to pay stamp duty land tax on the purchase price (Unless you’re a first time buyer with a property priced less than £300,000).
- Check and potentially challenge your council tax band. As many as 400,000 homes have been put in the wrong band, meaning your new home might be!
- Know the difference between leasehold and freehold, and find out what the property you intend to purchase is. A freehold means you own the property and the land it stands on, a leasehold means you rent the property from the freeholder for a certain period. Make sure if it’s leasehold it’s got at least 80 years to run.
- When buying a house with someone else, it is worth looking into additional legal contracts that can protect both parties should your situation change. If the contributions differ between those involved, a declaration of trust can be drafted by your lawyer to show the financial interests in the property. It’s also advised you make a will.
- Be aware that you can pull out from a purchase any time before contracts are exchanged. However, this also means that the seller can also pull out before exchange of contracts, and you have no legal right to recover any costs from them. Ask your solicitor about indemnity insurance.
- You can also be ‘gazumped’ right until exchange of contracts (someone else puts in a higher offer than yours); it is legal even if your offer has been accepted. Consider home buyer protection insurance once you’ve put in an offer, which is usually valid for a few months, and will help you claim back some of the fees incurred.
Legal jargon can make the already stressful process of buying a house even more overwhelming, which means finding the right legal assistance for you all the more important.