Homebuyers do not know enough about the legal process, a new study has found, with around three quarters confused about what is involved.
77% of those planning to buy a property in the next ten years said they do not know when they are expected to pay the deposit and 38% are unaware of the difference between a freehold and leasehold.
Over half of the 2,000 Britons surveyed could not define gazumping and 45% are not sure what a conveyancer does, revealed the research by property law specialist Slater and Gordon.
Samantha Blackburn, a property lawyer, says: “Tens of thousands of Brits will be contemplating buyers or selling a home as the weather and the market warm up. It’s vital that buyers, especially first time buyers, know their rights and have a basic understanding of the legal process.
“Buying a home can be confusing, time consuming and expensive. Misunderstanding the process and not getting the correct legal advice cannot only delay a sale, it can also lead to increased costs and potential issues in the future.”1
One of the main areas of confusion was the rights of leaseholders, with 32% of respondents unaware that they must pay ground rent to the freeholder.
Here are some of the terms to remember:
Conveyancer: A legal expert, usually a solicitor, who organises all aspects of the sale.
Exchange: When the buyer and seller sign contracts and send them to one another. The deposit is lodged and the sale is now legally binding.
Completion: The money is transferred and the keys are given to the buyer.
Freehold: The property is owned outright.
Leasehold: The home is owned for a set period when it is on lease from the freeholder.
Gazumping: When the owner has agreed to sell, but then accepts a higher offer.
Gazundering: When the buyer offers less at the last moment.
1 Binns, D. (2015) ‘Gazumped? Homebuyers clueless over legal process’, Metro, 19 May, p.24