Step 1: Awaiting Solicitor Engagement
This page contains a detailed description of Step 1 of the 10-step property purchase process
Your solicitor has now been notified that you have been successful in bidding for a property and we have forwarded the important details. You can now expect your solicitor to contact you with an engagement letter, often called a section 68 Letter together with a quote for their services. Once this has been received you have now successfully engaged your solicitor. Your solicitor will now open a case file for you and start the conveyancing process. We have let your solicitor know that we are assisting with you with this purchase and we have requested an update as to the status.
There are many reasons why it's important to get legal advice from a practising solicitor and member of the Law Society. From employment law to family law, from making a will to buying a home and much more, when you talk to a solicitor you avail of a range of benefits and protections unique to the solicitors’ profession.
By law, your solicitor must give you information about your legal charges – the money you must pay them for their services. Solicitors’ charges include their fees and any money they pay to another person or an organisation for you. Your solicitor must give you information about their charges and must also write down and give you details of how they will charge you in your particular case. If you have any questions about your charges, ask your solicitor.
When you agree that a solicitor can act for you, for example in a court case or to sell your home, the solicitor must give you the details of your charges in writing as soon as possible.
The information should include: exactly how much your solicitor is charging you, or, if they cannot do
this; is an estimate of how much your solicitor will charge you, or, if they cannot do this; how your charges will be worked out.
How does my solicitor work out my charges?
Your solicitor bases your charges on a number of factors such as: how complicated, urgent and important your matter or case is; how difficult or new the questions about your matter or case are; the skill, specialised knowledge and responsibility of your solicitor and staff involved; the number of hours your solicitor and staff spend on your matter or case; the number and importance of documents they prepare or examine;
the value of any transaction that might be involved; whether your solicitor has to travel to deal with the matter; and
the circumstances in which your solicitor deals with the matter or case.
When you buy or sell a property, the title or ownership will be transferred from the seller to you or vice versa. If you are getting a loan, the mortgage or loan that you get to help you buy the house will also have to be registered. There are many other matters that will need attention.
The quotation you receive in writing will outline the professional fees. The quotation may be for a specific fee or based on an hourly rate. If the quotation is for an hourly rate, you will be given an estimate of the total number of hours the firm is likely to spend working on your purchase.
You will also be told the rate of VAT that you will have to pay on the firm’s fees.
Finally, you will be told the amount of outlays that may be payable to third parties during the transaction. If these amounts are not yet known, you will be given the firm’s best estimate.
Limits to the firm’s quotation
At present, you, the proposed purchaser, may not know much detail about the property. For example, you may not know about the planning permissions that affect it. When you instruct your solicitor and they then get detailed information about the property from the seller’s side or from the title deeds it may be that your transaction is more complicated than had been indicated by your initial information.
New issues may also arise during the course of the purchase. We have provided some examples of some complex issues that might arise. If this happens, a new, separate quote will be given for the additional work. In that case, the final fees will be the total of both quotations if your first quotation was for a particular amount. If the quotation was for an hourly rate, the estimate of the number of hours of work the firm will have to do will have to be increased. You should budget for this possibility.
You should review the quotation received and respond by email to say you accept the fees and are happy for the solicitor to act. You should also forward the authority email you received from us to your solicitor in order for us to track this transaction on your behalf. Should you need any help with this please contact email@example.com.
Before you start bidding on properties, try to get ‘approval in principle’ for a mortgage first so you know how much you can borrow. This way you know the price range of properties you should be looking at and how much you can afford to pay for your new home.
Contacting lenders and advisers
You can apply for a mortgage in two ways:
Directly to the lender (banks, building societies, certain credit unions and retail credit firms who are not banks or building societies) – you deal directly with the lender.
Through a financial adviser or broker – they deal with the lender on your behalf.
Before you start you may want to get financial advice so that you know you are making the right choice. If you want to use a broker, you can get a list from the Central Bank’s registers website – but make sure you know what type of adviser you are using, how many lenders they represent and what they will charge you.
What documents do you need to apply?
Photo ID: such as a valid passport or driving licence.
Proof of your current address: such as a household bill in your name.
Proof of your income: your latest P60 and at least three recent salary slips.
Evidence of how you manage your money: bring current account and loan account statements for the previous 12 months.
You can also use other documents to prove your identity and address. It’s a good idea to keep photocopies of any documents you give to your lender or broker.
Tips when applying
Don’t panic and take the first mortgage you are offered. Apply to a number of lenders and if you are offered more than one mortgage, compare the rates carefully. Keep your eyes open for better offers from other lenders. Use our mortgages shopping around checklist to help you. Don’t be seduced by ‘freebies’, like free legal expenses or discounted insurance without looking at the mortgage as a whole. Introductory and first-time buyer packages can save you money in the short term but remember to consider the long-term costs when the ‘introductory rate’ runs out.
Your solicitor will now exchange details with the solicitor from the other side and contracts and a copy of the Title Deeds will be sent for review. The Title Deeds for the property are usually kept at the bank which holds the current mortgage over the property. Once these have been received by the seller's solicitor, they then draft the contract.
Reviewing the Title Deeds generally involves carrying out an investigation to ensure no other party has any interest in the property other than the Seller. This is one of the most important aspects of the transaction and both sets of solicitors will take great care to ensure this is done to the highest possible standard.
At present, you, the proposed purchaser, may not know much detail about the property. For example, you may not know about the planning permissions that affect it. If you instruct your solicitor and they then get detailed information about the property from the seller’s side or from the title deeds it may be that your transaction is more complicated than had been indicated by your initial information.
Now you have engaged your solicitor, there are now, two solicitors, an estate agent, two banks, and Daft Assist taking this transaction forward. Both your solicitor and the seller's solicitor will exchange details and once contracts have been exchanged you will be updated.