Property Contracts

What should I look for in the final contract?

What you should look for in the final contract is accuracy. Does it have names correct? Are address's correct? Is the description of the subject property accurate? Are prices accurate? Is the deposit amount correct? So really what you want to make sure is that everything in the final contract is accurate.

What should I do if I do not agree with something in the contract?

What you should do if you don't agree with something in the draft contract is to tell your solicitor. If the draft property contract has already been exchanged it's too late to object. So always look at the draft property contract before exchange to make sure you can put your concerns to your solicitor.

If I am buying a property, when do I pay the deposit?

If you're buying a property, you can pay two kinds of deposits. You can initially pay what's called a holding deposit of a few hundred pounds, possibly to the estate agent. I wouldn't recommend paying to holding deposits. However, the second type of deposit is the main deposit that's paid when contracts are exchanged. This deposit can be up to, but not more than, ten percent of the purchase price. But because purchase prices these days are so high, many people are seeking a lesser deposit amount, say five percent of the purchase price.

How are contracts exchanged?

In the orthodox way of dealing with conveyancing, the exchange of property contracts would involve the physical exchange of two contract forms, one for the other, between the seller's lister and the buyer's lister. Nowadays, exchange of contract is actually done over the telephone by solicitors agreeing an exchange, backed up by enforceable undertakings.

What happens once contracts are exchanged?

One contracts are exchanged the parties to the agreement are bound to it. That means the seller must sell and the buyer must buy once contracts are exchanged. And it's usual for the contract to stipulate a day maybe three to four weeks ahead at which time the contract must be completed and the balance of the price paid.

Why should I exchange contracts on the same day throughout the chain?

Property Contracts must be exchanged on the same day throughout a chain of transactions. Because of costs, you need to coordinate the sale and the purchase, which requires all sales and all purchases to be coordinated, so that there is a similarity of date and time in all of them so that there is coordination in the exchange of contracts.

If I am buying, when should I take out buildings insurance on the property?

If you're buying, the time when you should take out buildings insurance depends on what the contract says. If your contract says your risk for insurance passes at exchange, then of course you must exchange and then immediately take out buildings insurance. However, some contracts don't pass that risk until completion, and if that's the case, you don't need to take out buildings insurance until completion. But in fact, if you're borrowing money, you'll find that most lenders put in place buildings insurance from the time that they issue their loan offer.