How to Manage the Chain

Look through the checklist, in my previous article, for why a chain can fail and make sure none of it applies to you. You should also help the rest of the chain by making sure that you follow as much of the following information as possible.

Note: If your survey reveals a problem that was not apparent in the your mortgage valuation, don’t panic. All types of faults can seem horrendous in writing, but they can be fixed. Get a builder or specialist’s opinion and discuss it with your vendor: they will want to be flexible to keep the sale going, so you should be able to renegotiate the price to allow for the work required.

Here are some ways to help to keep on top of everything:

  • Employ a good, experienced agent and legal specialist.
  • Get your finances in place early, especially cash for your deposit at time of exchange.
  • File everything, including copies of your correspondence and notes of telephone conversations. Keep copies of contact details of services at work, just in case.
  • Have copies of documents that are likely to be requested, planning permission, building regulation certificates, plans of drainage etc.
  • Turn around your paperwork promptly.
  • Deliver documents by hand, courier or special delivery.
  • Put clauses in your buying and selling contacts stating the dates by which you should exchange, have the survey done, and complete.
  • If you are part of a couple, share out the jobs to avoid any confusion or duplicated work and calls to other people in the chain.

We become more stressed if we don’t know or understand what is going on, so get involved. Talk to your representatives regularly – at least once a week – and ask if there is anything they or you should be doing next and by when. Ask where there are problems and who should be dealing with them. If someone needs to be hurried along, ask if you are allowed to give them a ring, or who will and when they will get back to you. Keep a list of everyone’s contact details so that you can get in touch if you need to. Be tenacious and proactive and try to treat the process as you would a business deal.

All this is going to take time, and be emotionally draining. If possible, reduce your other workload and commitments so that you are available – for example, put off foreign trips! Be flexible: if your buyer finds flaws with the property, consider the problem.

You might be able to deal with it yourself or you might decide it merits negotiation on price. Remember that the agent will probably have to come across such problems before and should have some advice for you.

Getting to the exchange stage
Exchange of contracts is when the copies of the signed contracts are swapped between the two legal firms and a deposit is made by the buyer to the vendor. It is the point at which an agreement to buy or sell becomes legally binding. Once everyone in the home straight because no one can back out of their deal. At this point a date should be set for completion and a legal firm can be sued if they fail to meet that date, so they have a strong incentive to meet the deadline.

However, most details occur on the route to exchange.

All of the following stages need to be completed for you to exchange contracts:

  • Property title deeds drawn down from the lender of the property for sale.
  • Preliminary enquiries and local searches.
  • Fixtures and fittings form and property information forms filled in and signed.
  • Key information from any leasehold documents, such as special clauses prohibiting pets and subletting.
  • Survey and any resulting actions or negotiations.
  • Other negotiations (e.g. on fixtures and fittings).
  • Answers to all ‘buyers questions’.
  • Written mortgage offer.
  • Contracts for sale and purchase drawn up.
  • Agreed deposit available.
  • Completion date agreed.
  • Building insurance in place by the buyer.

When buying, you become legally responsible for the property’s building insurance once you exchange, so you will need to have this arranged and pass the policy number and a copy of the policy to your legal firm. It is worth asking the vendor who their policy is with as you may want to continue with that insurer. This is particularly good idea if the property is in a flood risk area or has subsidence problems as the insurer will already have details on the building and associated risks.

Setting a completion date
There are many other jobs to do between finalising the legal agreement and moving in, so it makes sense to agree a completion date at least two weeks after exchange.

Unless someone is going into rented or borrowed accommodation, everyone in the chain moves house on completion day, or a day or two after. Try not to complete on a Friday, because conveyancing and removals firms tend to be booked up on that day, and, also, if there are delays with finances, you could be stranded for a whole weekend and end up paying for your goods to be stored over that time. You also need to decide how you will move and choose a removal firm.

You may want to arrange to visit your new property so you can take measurements to see if your curtains and loose carpets will fit, and to check if there is room for your kitchen appliances, such as the fridge. You should also notify your ‘contents’ insurance provider of when and where you will be moving and check with them what is not insured during the move, as you may need to get additional insurance from them, or via the removal company.

Getting to completion
Completion is when the remaining money is paid by the buyer and the mortgage company and you get the keys to your new property over which you took ownership when you exchanged. That’s why you can’t complete without having exchanged contracts, although on very rare occasions completion and exchange can happen at the same time. Your role in completion is to wait nervously for the phone call telling you all is well.

The money is paid from:

  • Any balance left after your mortgage is paid off with the funds from you purchaser.
  • Your new loan.
  • Your own cash.

The money is transferred electronically between the legal firms’ bank accounts, each one triggering the next transfer. This all takes time and if you are near the top of the chain, the system may run out of time in transferring funds, so have a contingency plan for where you could stay overnight if you have handed over the keys but have nowhere to go. This is another reason to try to avoid completing on Fridays, as unfinished business will then be left to the following Monday.

When selling, never hand over keys until your legal firm tells you they have completed. Waiting for that call can be nerve wracking. If it doesn’t come, call your legal firm and find out why. There could be a hitch, such as someone suddenly falling ill, in which case you may all have to wait another day. If this is the case, you may need to negotiate who is covering the costs of this, such as hotel and storage charges.

Note:
Buy some time if you can
The few days after you move into your new property are an ideal time to change any superficial decoration you don’t like, put up new cupboards, curtains and some familiar pictures, and clean out anything that isn’t up to your standards. If you are able to arrange a couple of days between completion and moving in (maybe with your belongings going into storage), you can get a lot more done in an empty property.


April 3, 2013 | Author: | Posted in Home Improvement

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