If you are thinking of selling your property, then it is important that you are aware of the legal implications that come with it. There are regulations that you fail to adhere to and could lose you a significant amount of money. This article will discuss 6 things that need to be considered when transferring property.
What do I need to know about Transferring Property?
Contents
1. Hiring a conveyance service
If you are transferring property, then it is significant that you hire the services of a conveyancing solicitor. Here, they will guide you through the legal proceedings involved with buying and selling. As the process can be daunting for some, this could save you time and money in the long run. Additionally, solicitors will help increase your chances of completing on time, as well as minimize any unforeseen risks which may arise along the way. Whilst there are various ways to find conveyancers, one effective method is via online directories or recommendations from family or friends who have used them before. It is vital that you check their credentials before hiring them to ensure they are reputable professionals who are qualified lawyers.
2. Price negotiation
There is always room for negotiation when buying and selling property. Even though you may have come to an agreement with the seller, it is still important that you try your best to obtain a lower price. Whilst this may be an uncomfortable situation for some, there are effective ways of doing this without offending the seller. If possible, try coming up with ideas that could benefit them in their life or business. This will encourage them to negotiate if they are interested in what you are offering. Even after they agree on a set price, there is always room for further negotiations within reason if they ask for more money towards the end of the transaction. On the other hand, if they are only willing to lower the price slightly, it is important that you consider this carefully.
3. Deposit
A deposit is an initial payment made to secure a property before completion. It can be given by cash or check and varies between 5% — 10% of the purchase price depending on the market value of the property concerned. The purpose of these payments is to show good faith to both parties involved with buying and selling properties. If either party backs out or does not adhere to their part of the arrangement, then they will lose their deposit. For example, if the buyer fails to complete on time, then they will forfeit their deposit. It is important that you are aware of deposit protection schemes, which may help you recover your money in case there was a mistake in the proceedings.
4. Stamp Duty
Stamp duty is a legal requirement for purchasing a property. It applies to all forms of transaction which includes purchasing, gifting, and inheriting. In the UK, stamp duty is a progressive tax, which means that there is a different rate of taxation depending on the value of the property being bought or sold. For example, if a house was valued at £125,000 then you would have to pay 1% in Stamp Duty. If however it was valued at £300,000 then this would increase to 3%. The amount payable per purchase is calculated by adding together all rates which apply after any reliefs from previous purchases.
5. Legal contract
When transferring property, you will be asked to sign a legal agreement between yourself and the seller. This can often be completed using electronic signatures as well as traditional methods such as signing on the dotted line. These contracts are primarily used to protect both parties involved, so it is important that you read them carefully before agreeing to anything. For example, if you fail to complete on time, then there may be serious consequences involved with the legal contract. Although these agreements are not binding by law, they still hold a lot of weight in court should one party break their end of the deal.
6. Completion
Completion refers to both buying and selling property at the same time, this means upon transfer of ownership any outstanding mortgage debt will immediately become due and payable in full via your solicitor. The majority of homebuyers will require a loan or mortgage in order to finance their new purchase, which is why lenders will not want to provide finance for a property that is still subject to any other mortgage. This is because the new buyer would have no way of paying off the previous outstanding balance if their loan or mortgage was not approved in time. To avoid this, it is important that you inform your solicitor as soon as possible, so they can arrange for all finance to be secured before completion occurs.
Transferring property can often be a complex process that requires you to pay close attention to detail. This means that it is important that both parties understand each step associated with buying and selling houses so that any mistakes or misunderstandings can be avoided.
