WHY IT’S IMPORTANT TO INSTRUCT A SOLICITOR AS EARLY AS POSSIBLE
Buying or selling a property is among life’s most exciting but also stressful experiences.
Once you’ve decided to buy or sell, you may want to press ahead as quickly as possible. You’ll want the legal process to be as quick and smooth as possible. A common question, especially with first time buyers is “when is the right time to instruct solicitor
At Benjamin Stevens we do all that we can to make the sales process run as smoothly as possible for our clients. There are many pieces of advice we offer, but one thing we always advise is to intruct your solicitor as early on as possible.
There are good reasons why the timing of instructing your lawyer is not always easy. The primary concerns about instructing early are based on:
1. Neither buyer or seller are legally committed to the transaction until contracts are formally exchanged, which means money spent on legal fees and other costs cannot be reclaimed should the transaction fall through.
2. Where there is a chain of transactions dependent on each other, it often only takes one transaction to fall through for the whole chain to fall through, again resulting in any legal fees and other costs incurred being lost.
Reasons to instruct a solicitor early:
Despite the above potential financial risks, there are many good reasons to instruct a conveyancing solicitor as soon as possible. This is especially the case for sellers.
As a buyer, you will need to bear in mind that the conveyancing process can take anywhere between six weeks to three months to complete, so the earlier you start this process, the better. It is often tempting for buyers to wait until you have a mortgage offer, however, this can cause a delay in the transaction and may leave your seller frustrated as to a lack of progress or commitment to the purchase from you. The judgment call on this will also be influenced by the competitiveness of the market.
Instructing solicitors as a buyer will provide comfort to the seller and it’s worth knowing that generally, the solicitor you instruct will not start work (and incur costs) until the seller’s solicitor has provided the contract and supporting paperwork.
Problems if there is a delay in instructing solicitors:
Most property transactions proceed relatively smoothly after a sale is agreed, but delay, for whatever reason, is a very common reason why most transactions to fail. The following are common problems created by a delay in the legal work starting :
Chains can easily collapse – this can be for many reasons but any delay by any party in a chain increases risks.
Common problems with old leases – many property sales, especially in London, are of flats with leases which were drafted 30, 40 or 50 years ago. At that time, the terms of those leases were considered perfectly satisfactory to mortgage lenders. However, mortgage lenders change their criteria from time to time, and it is not unusual for a clause or clauses in an old lease to now not meet lender criteria. To get round this the seller may need to have the lease varied, which takes time. Instructing a solicitor when you decided to sell, before you find a buyer, should mean your solicitor may spot any problems early and they are dealt with before you get a buyer in place
3rd party delays - Response times to requests for information and documents vary a lot – some will take weeks. A buyer’s solicitor will need to carry out searches and enquiries, the most common of which is a search of the Local Authority’s records about the property. Time to respond can vary so the earlier such searches are started the earlier they are returned.
Showing serious intent - starting the legal process quickly, including instructing solicitors, sends a clear and positive message to the other party that you are serious about proceeding.
Contract package – the seller’s solicitors will need to prepare a contract pack to send to the buyer’s solicitors. The buyer’s solicitors often won’t start searches and enquiries until they receive a “full contract package” which means the seller should start the process early, often before having a buyer in place.
Leasehold properties – with leasehold properties, the seller will generally need to obtain a lot of information and documents from the freeholder and/or a management company/agents that operate the freeholder’s functions. With large blocks of flats, a comprehensive pack is generally needed which contains crucial information about service charges, major works and their requirements. This is another example where the amount of time it takes for this pack to be obtained is outside the seller’s control. So, the earlier the request is made (generally together with a payment for the preparation of the pack) to the freeholder or management company/agents the better, the better.
Money spent may not be lost even if the transaction fails - Reluctance to instruct early is often due to not wanting to spend money because a decent proportion of transactions don’t go ahead – this is a frustrating part of the process but unavoidable. On the seller’s side, much of the work done the first time around won’t need to be repeated for subsequent sales of the same property (once a new buyer is found). Risk on costs incurred is unfortunately part and parcel of a process where nobody is bound or liable to the counterparty unless and until contracts are formally exchanged.
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