Why is the pre-contract stage so important in the house conveyancing process?
In the UK, no agreement for the sale and purchase of any land or property can be implemented, until it is in written, including and integrating all the clauses and terms agreed between both the parties. Until the agreement has been agreed, legally signed and exchanged, any party can withdraw from the deal with being liable for any compensation. Hence, to ensure that the entire process is fair, legally correct and there are no later consequences of the deal, the pre-contract stage is very important for any property or house conveyancing process.
Once both the parties have agreed to the offer, it is advisable and legal that the seller’s solicitor or the conveyancer should prepare a contract, which includes all the major details of the deal. This all happens in the pre-contract stage of the process. For all the property and house sales, the contract will include the names of each party, the depiction of the property being sold, the price that has been agreed upon, the transfer of title deeds and many other detailed terms. It is mandatory to conduct extensive research in this stage as the agreement will include all the customary conditions of Sale, which are published by the Law Society. It will also include necessities setting out the rights and duties of each party after contracts are exchanged, and the penalties which will be liable, if either of them opts out.
The pre-contract stage is very important as along with drafting the contract, it is during this stage that both the parties instruct their attorneys, as to how they want the deal to progress. Moreover, it is during this stage that the buyer’s attorney or his legal representative carries out a thorough check of all the documents and credentials provided by the seller. It is at this stage that the purchaser’s attorney ensures and verifies that seller is legally allowed to sell the property he wants to sell. Also, all the applicable pre-contract searches and surveys are carried out during this time. Buyer’s legal representative or the conveyancer will also examine the property by raising enquiries, evaluating the title, analyzing and studying the search results and, if essential and apt he might also inspect the property.
During this entire process if there are any amendments and inconsistencies, then the buyer’s attorney will raise the inquiries and the seller’s lawyer will have to answer them. If the buyer is not satisfied with the answers, he may pull out of the deal at this stage, without being liable for any penalty. It is at this stage that the buyer has to confirm that he can carry on with the transaction in financial terms. His solicitor will verify that his patron can pay for the purchase. In case, the client is not buying the property with cash, the solicitor must have received a suitable mortgage offer, only then will he proceed with the deal.
Remember that for all house conveyancing processes, pre-contract stage is very important as it is based on the principle of ‘caveat emptor’, which means, let the buyer be aware. Usually the time frame of this stage is three to four weeks and it helps the buyer to decide, whether or not to proceed with the transaction. So make sure if you are buying or selling any property, make the most in this stage.
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