Buying or Selling a Business
Commercial conveyancing
Points to bear in mind
Some tips
Cost of selling
Other costs involved in selling
Cost of Buying
Example
Can costs be reduced?
What do we do on a purchase?
Can costs be reduced?
Our clients expect and deserve a good service. To provide this, we need staff and equipment, all of which costs money. We do try to keep the costs over which we have some influence under control and the main way of achieving this is to use our staff efficiently. We employ enough staff to provide a good service on an average day but some days are busier than others. For example, the beginning and end of the week are busier than midweek as is the end of the month. Periods just before Christmas, Easter and Bank Holidays are always particularly hectic. As a result, there are times when we and our staff are very busy and although we always try to deal with all work within 48 hours, occasionally this may not be possible. It might be a particularly busy time or another client's case may be at a crucial stage and need all of our concentration. On these occasions, please be patient. We could employ enough staff to deal with even the busiest days without stress but if we did, it would mean that on quiet days most of them would be sitting around with nothing to do. This would increase our overheads immensely and as a result, force us to increase our charge to you.
In order to be fair, everything is dealt with in the order it arrives. If your case is especially urgent and you want us to queue jump it, we will do so whenever possible. But please accept that this causes disruption to our system and means that another client's work is put back. We cannot do this too often and we will need to make an additional charge when we do. Therefore, please only request this in a real emergency.
Local Searches
When buying a property, one of the essential checks is to ask the local council if they have done or intend to do anything which might affect the property. For example, whether they have granted or refused any planning permissions or decided to build a major new road nearby. Experience has shown that there are certain questions which should normally be asked. These are set out in a detailed form call "a Local Search". This is sent to the Council which is responsible for the area which covers the property you are buying. Different councils take anything from a week to a month to reply to these and charge different fees. Some as little as £100, others as much as £280. As this is quite a big outlay we ask you to let us have a cheque to cover the likely cost. In most of London this is about £300 so that's the amount we request you send us. As soon as we receive that from you we send off the local search. To avoid delay later on we ask you to let us have a cheque for £300 payable to Sayer Moore & Co right at the beginning of the transaction. If the cost of the search is less, we will credit any balance towards your purchase. If it's more, we will ask you for the balance later on.
Solicitors fees
We believe that the fairest way to work out our charge to you is to link it to the amount of time we spend on your case. If your case is simple and quickly dealt with, you pay less than if it is difficult and slow. This is very similar to the way you pay more for a long taxi journey than a short one.
We work out how much to charge for our time by adding up the cost of running our office for one full year. This includes the wages we pay to secretaries, bookkeepers, filing clerks and our support staff, the money we pay to our suppliers for equipment, stationery, electricity, business rates and all the other bills that come in. We then divide that amount by the number of hours our solicitors can reasonably be expected to work in a year, taking into account the normal holiday entitlement, sick leave and the time they to spend on administration, training & other similar requirements. This arrives at the amount each solicitor has to earn an hour to ensure we can pay our bills and stay in business. Finally, we add to that a profit margin of 15% from which the solicitors themselves are paid.
The current hourly charge works out to approximately £125.00. To simplify our sums, the Law Society allows us to assume that a basic letter received or sent or a telephone call received or made would take up about six minutes or one-tenth of an hour. This covers the cost of getting a file out, thinking about what needs to be done, making a note and, if necessary, dictating, typing a letter, checking, signing it and posting it.
We provide a good, reliable professional service. We keep our clients informed about what we are doing and why. We treat every one of our clients as an individual and treat them with the respect and courtesy they deserve. We think that's real value for money.
Survey
Buying a property is the biggest financial transaction of most peoples lives. It pays to play it safe and have the property thoroughly checked over by a surveyor. If no problems are found at least you can sleep easily. If any serious faults are discovered you can either renegotiate the price to cover the cost or withdraw from the deal. If there are serious faults and the surveyor misses them, you have some chance of claiming compensation.
What is the likely cost? All mortgage lenders will want a surveyor chosen by them to value the property and most will make you pay the valuer's fee. This varies from lender to lender and on the type and price of the property but will probably be between £150 and £300. Please check with your lender for precise costs. A basic valuation is designed to protect the lender NOT you. It's only intended to make sure their loan is reasonably safe.
Some lenders offer to allow their surveyor to do a report for you as well. They charge an extra fee for this, perhaps £300 to £400, but it is worth it to give you the protection you need. Remember though that even the best of surveys usually contain a large number of "get out clauses". Watch out for the surveyor saying he/she was unable to check the roof, couldn't take up the carpets to check the floor boards or didn't check the wiring, gas supply, heating or drainage. Some of these may be reasonable, too many of them and you may begin to wonder what you are getting for your money. If you believe the surveyor is acting unfairly in excluding too many responsibilities discuss it with him/her.
Occasionally you will be offered a full structural report. This is an extremely thorough report going into much more detail than a normal survey. It is really designed for properties where there is a high risk of a serious problem. Older, poorly maintained properties or ones of an unusual design. The cost of these can be high. £500+ but if you need it they are worth it.
Most lenders will let you use a surveyor of your own choice to carry out your survey and their valuation provided the surveyor is on a list of ones they are willing to use.
The Royal Institution of Chartered Surveyors.
For more information about surveyors and how to find one in your area
click here: www.rics.org.uk
Mortgages
Mortgages
are legally binding loan agreements which have to be registered at the Land Registry. See above. Because they are designed to protect the lender and make sure they get their money back should you be unable to repay the loan, the lender wants to be certain they are legally watertight. For that reason they will use a lawyer to look after their interests. Usually they are willing to use the same solicitor as you as this cuts down on the duplication of work. We act for all the major lenders. Your mortgage offer will almost certainly contain a condition that you pay the cost of the legal work involved in looking after the lender. How much this will be depends a little on the lender involved and the size of the loan but guidelines agreed between the major lenders and the Law Society put the legal costs for most mortgages at around £150 to £400 plus VAT.
FT your Money
For independent guidance on mortgages
click here: www.ftyourmoney.com/products/mortgages/mortgage_intro.jsp
What else?
In some purchases there are a few unexpected costs. Sometimes the seller's solicitors fail to supply us with all the information we need to safeguard you or satisfy your mortgage lender. If so, we will press them for that information but there may come a time when it seems prudent to go directly to the land registry, local council or freeholder to get it ourselves rather than risk slowing down the transaction unnecessarily. If we feel we have to make payments to any one else in order to get the information we need to allow your purchase to proceed we will let you know in advance and ask you to cover the cost. Let me stress…these will be payments demanded by other people or organisations not fees kept by us.
What work does our £1000 cover?
What is a normal purchase or sale?
In a sale we expect to take the following steps.
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Take the details of the sale from you. The price , the buyer's details, where your title deeds are etc. |
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Obtain the title deeds from your existing lender if you have a mortgage. If you do not have a mortgage we have to rely on you to provide us with the original deeds. |
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Obtain an official copy of the entries on the Land Registry records from the Land Registry. |
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Draw up, a draft contract and lease if appropriate and send them to the purchasers solicitors together with a copy of the title documents and any other relevant paperr provided to us by you or with the original deeds. |
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Deal with any reasonable enquiries about the property received from the purchaser's solicitors. This means dealing with those enquiries where we have the information available from the deeds and other papers we are holding and requesting you to supply the necessary information in respect of any questions you should have the answers to. If we have to obtain information from other people e.g. the local planning dept or managing agents of a flat we will take reasonable steps to do so but if they fail to answer and we have to spend an unreasonable amount of time chasing them, that time might incur an additional cost. |
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Co-ordinate and carry out the "exchange of contracts" (that's the moment you become legally committed to the deal and can no longer change your mind). |
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Between exchange of contracts and completion, deal with the final formalities of getting the transfer document signed, preparing a financial statement showing the monies to be received on completion and any payments to be made out of them e.g. estate agents fees, any mortgages to be redeemed or our charges. |
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On completion , receiving the purchase monies, redeeming any mortgages you have told us about or we have notice of from some other source, paying any monies due to other people, sending the deeds and transfer to the purchaser's solicitors and accounting to you for any balance. |
What do we do on a purchase?
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Take the details of the purchase from you. The price , the seller's and the estate agents details. |
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Obtain a copy of the title deeds from the seller's solicitors and a copy of the intended contract. Check them to see if they are legally sound and fair. As you will appreciate we don't see the property itself and therefore can't check it's physical condition or whether the boundaries are where they should be. That is the job of your surveyor. We deal with legal matters only. |
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Send the normal Local Searches to the relevant local council and local water authority. |
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Ask the seller's solicitors normal questions about the property plus any additional questions required as a result of information given to us by you. |
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Prepare a report on the property and forward it to you. Answer any queries you may have concerning the report |
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Get the contract signed by you and collect the deposit from you. Co-ordinate exchange of contracts |
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Between exchange of contracts and completion, deal with the final formalities of getting the transfer document signed, preparing a financial statement showing the monies to be received on completion and any payments to be made out of them e.g. estate agents fees, any mortgages to be redeemed or our charges. |
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Prepare the transfer document , carry out final searches with the Land Registry and the Land Charges Dept. |
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Complete the purchase (subject to us being in funds and there being no legal or other obstacle to completion) |
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After completion, deal with the payment of Stamp duty and the registration of your ownership at the Land Registry. |
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