So, your offer for a house in Moray has been successful. What happens next?
Firstly, well done. Buying a house is a big personal investment and it can be very difficult deciding whether it is the right home for you and the best price to offer
So, to get this far is an achievement.
Trying our best to describe a clear chain of events for this – and there is no one-size-fits-all process – in this article, we look at what happens after an offer on a house is accepted.
Making sure mortgage funding is in place
Your solicitor will want you to make the funding for your purchase a priority.
You may already have had a meeting with your lender and received a mortgage offer, in principle.
You need to let your lender know that your offer has been successful and progress the mortgage application as soon as possible.
Your lender will want to check the value of the house and may have other checks too before they will give final approval for the mortgage.
Each lender has its own requirements: some will accept the existing Home Report valuation and others will wish to see a separate independent Valuation Report, which they may instruct.
Don’t rush into organising a Valuation Report or asking for a “refreshed” Home Report – which you may need to pay for – until you know what your lender needs. You don’t want to pay for the same thing twice.
Progress towards settlement
The timescale between submitting an offer and settlement – the day that you get the keys – is usually about 7 weeks.
If the offer was made verbally you need to make sure that your solicitor puts it in writing.
The offer and the written acceptance – along with any subsequent letters – are, taken together, the contract. These are also known as the missives.
Usually, you don’t need to sign any of these letters. If you receive an offer direct – either to buy or sell a property – be wary about signing the acceptance before you have consulted with your solicitor. There may be some adjustments which can be made to your benefit. At the very least, your solicitor may be able to prevent you coming unstuck on something, for example, a timescale which you would not be able to comply with.
Money required beyond a loan
You need to make sure you organise the remainder of the funds which will be needed..
In Scotland, usually a seller will not ask for a deposit in advance of settlement but, for example, if you were buying from a builder or at an auction, a deposit will probably be payable.
Unless these situations apply, you would normally expect to have to ensure that all the funds are available no later than the day before settlement.
Your solicitor will arrange to have the mortgage funds released to the solicitor’s bank account in good time.
Your deposit and the expenses are paid to the solicitor’s bank account as well.
Your solicitor will ensure that payment is made to the seller’s solicitors on the day of settlement. This payment is in exchange for you receiving the keys and your solicitor receiving the necessary paperwork to complete your purchase.
How much exactly you require to pay
Although your solicitor will have told you what the fees and outlays (and tax, if any) will be, they will not be able to confirm the exact amount you need to pay to the solicitor’s bank account until the offer of mortgage has arrived.
This is because lenders may deduct a “transfer of funds” fee, or have other deductions, or possibly add a cash-back.
Any of these things can affect the exact amount you will need to pay.
The easiest way to transfer the funds is through the bank system. If you use online banking, check with your bank in good time whether there is a daily limit, or transaction limit, as it may be that you need to put the funds through as several payments, over several days.
Money Laundering requirements
As part of the Regulations which your solicitor must comply with, you will be asked to sign terms and conditions.
Your solicitor will ask you to provide –
- evidence of your identity,
- personal information needed to complete the documentation, including your national insurance number, and
- evidence of how you acquired any funds that you are using for the deposit.
Please do not be offended that your solicitor asks for all of this personal information, even if they have acted for you previously. It does not mean they suspect you of actual money laundering.
They have to be able to show, if required, that they have complied with the Regulations.
If you have been given or loaned money from friends or relatives for your deposit, your solicitor also needs to check their ID and see evidence of how they acquired the funds.
Your solicitor will let you know when the written acceptance arrives, take your instructions on it and give you details of the title and title conditions, and other information that you need to know as a home owner.
They will prepare the mortgage and tax documents for you to sign and let you know when the documents are ready.
The mortgage documents cannot be prepared until your solicitor has the offer of mortgage from your lender. Ideally, your solicitor wants to have these at least 2 weeks before settlement.
Your solicitor will leave it to you to organise practical issues such as
- changing electricity and other services into your name,
- notifying the Council Tax Office, and
- arranging the move of your furniture and belongings.
Note that, in most cases, your solicitor will have a duty to see your building insurance schedule before the loan funds can be used.
Lastly – the thing you wanted to do from day one – you need to think about furnishings, decoration and everything that will make the house your new home.
How we can help
If you have any questions about this article or any aspect of the property purchase process, please get in touch with us.
All initial enquiries are free of charge and without obligation.