Buying advice - conveyancing etc

guygamps

Hi, about to buy a 1 bed flat - for cash, will do it up and then rent it out.

Its my first effort in buy to let business

cash purchase means no mortgage, which means that there is no 3rd party with an interest on the propert, be that financial or structural.

When applying for a mortgage you have to get a survey and valuation done or home buyers report, but now most of what I need to know is in the HIP already sent to me.

What is the minimum I need to do in terms of getting the purchase across the line, do I need a solicitor ( the HIP contains copies of the local authority searches) - do I need a survey or home buyers report?


What do I need that the HIP does not provide.

Guy

bryanb

guygamps wrote: »

What do I need that the HIP does not provide.

Just the expertise really, but I would advise a solicitor or conveyancer.

pie81

Will you have the expertise to review the draft sale contract for any unhelpful clauses and negotiate for a better contract, review the lease for clauses that are likely to cause problems, know what further enquiries to make of the sellers to supplement the HIP info, spot any possible previous breaches of the lease or planning law, spot any issues thrown up by the searches, arrange notification of your ownership to the freeholder, and arrange registration at the land registry? If not then I'd appoint a conveyancer.

Will you have the expertise to spot any potential problems with subsidence/settlement, wood rot or infestation, damp, poor electrics or gas installation, etc? If not then I'd get at least a homebuyer survey - especially if the property is old.

If you're confident you can do the above yourself then no need for lawyer and surveyor - and it must be admitted that there are lawyers and surveyors who miss these sorts of things - but personally I think it's worth the cost.

guygamps

good points well made

so I still need a solicitor - got it - but since some (if not all) what in the pre HIP days you paid a solicitor to do (e.g. searches) and some (if not all) of what you used to pay a surveyor to do is now covered by the HIP... have their charges done down (that would be a miracle).

What would I expect to get for my money and how much would I expect to pay these days for such services.

Guy

Milliewilly

I am paying c£500 + VAT for my purchase. I wont know the exact figure until completion depending on the amount of photocopying / phone calls etc.

G_M

What is the minimum I need to do in terms of getting the purchase across the line, do I need a solicitor ( the HIP contains copies of the local authority searches) - do I need a survey or home buyers report?

The minimum in terms of who you need to get involved, is .. no one.
You can do the conveyancing yourself.
You can inspect the property for structural defects yourself.
You can check the HIP and/or with the council yourself for development plans, drainage etc etc
You can cut the bank out by keeping the money for the purchase in a safe in your study till Completion date.
And you can do the plumbing, re-wiring and decorating yourself prior to renting out.

ALL of the above are feasible if, as Bryanb above says, you have the expertise... and time.

Milliewilly

G_M wrote: »

The minimum in terms of who you need to get involved, is .. no one.
You can do the conveyancing yourself.
You can inspect the property for structural defects yourself.
You can check the HIP and/or with the council yourself for development plans, drainage etc etc
You can cut the bank out by keeping the money for the purchase in a safe in your study till Completion date.
And you can do the plumbing, re-wiring and decorating yourself prior to renting out.

ALL of the above are feasible if, as Bryanb above says, you have the expertise... and time.

I was told you cannot do the conveyancing yourself due to money laundering / possible stamp duty evasion regulations - it has to be done by a Solicitor??

G_M

Milliewilly wrote: »

I was told you cannot do the conveyancing yourself due to money laundering / possible stamp duty evasion regulations - it has to be done by a Solicitor??

No. Anyone can do their own conveyancing if they feel confident/competent enough. There are books which will take you step-by-step through the process.

If you are not a qualified solicitor/conveyancor you are not allowed to charge someone to do it for them.

I have acted for myself several times, and also done it for a partner (free).

If you are getting a mortgage however, the bank will instruct a solicitor to put the mortgage in place (at your cost). Since the extra cost of getting the same solicitor to do the conveyancing at the same time is marginal it is usually not worth DIYing where there's a mortgage.

Milliewilly

A mortgage wasn't involved in my case.

So how do you stop someone registering the sale with the land registry at eg £249999 then bunging the vendor another 10, 20 or 50K for the true sale price eg £300K and thus avoiding 3% SD? Also how are you qualified to say that the money is legit with the rules brought in regarding money laundering after 9/11?

These were 2 of the reasons given to me as to why you can't do the conveyancing yourself.

Mine was a simple cash sale to a family member so I wanted to avoid the obvious solicitors costs but couldn't?

G_M

These were 2 of the reasons given to me as to why you can't do the conveyancing yourself.

Given by who?

"stop someone registering the sale with the land registry at eg £249999 then bunging the vendor another 10, 20 or 50K for the true sale price eg £300K and thus avoiding 3% SD?"

a) this would be tax evasion which is illegal. HMRC are not stupid and where a property is registered at well below market value, especially where a tax threshold is involved, they may investigate.
b) the vendor would really have to trust you. If, after Completion, you declined to 'bung" him the extra, he'd have no contract to enforce. Equally if he made you "bung" him the cash in advance, you'd have to trust him not to pull out of the sale and walk off with your cash!

"how are you qualified to say that the money is legit with the rules brought in regarding money laundering after 9/11?"

The Money Laundering Directives impose requirements on professionals. Thus

"a firm or sole practitioner who by way of business provides legal or notarial services to other persons, when participating in financial or real property transactions concerning –

(a) the buying and selling of real property or business entities;
(b) the managing of client money, securities or other assets;
(c) the opening or management of bank, savings or securities accounts;
(d) the organisation of contributions necessary for the creation, operation or management of companies; or
(e) the creation, operation or management of trusts, companies or similar structures,"

If you act for yourself you fall outside the scope of the Directives. However, a solicitor acting for the other side (eg the vendor's solicitor) may, when receiving your payment on Completion, feel obliged under the Directives to seek clarification about the source of funds.

James_Trimby

I'd use the professionals as much as possible. It is a competitive market out there it shouldnt be too expensive plus you have someone to sue if it goes wrong! Re HIPS report info I believe all solicitors repeat the searches because there is no guarentees that things have not changed since the HIPS was done - and their insurance companies wouldn't support them if they didn't (It was one of the many complaints about HIPS when they came in)