Buying and selling houses, especially as a first-time buyer, can feel like a minefield of unknowns.
It can be challenging enough to understand the basic conveyancing process, let alone the legal jargon involved. So, in an effort to make things as clear and understandable as possible, we’re going to look at some of the phrases you are going to encounter when communicating with your conveyancer during the run-up to your house purchase.
In this article, we’ll be looking at the draft contract. This is simply the initial version of the contract that will eventually legally bind the sale of a property from the seller (or vendor) to the purchaser.
To be more specific, at the point at which a vendor accepts an offer on their property, they will instruct their conveyancer to draw up the draft contract.
It’s classed as a draft contract because the sale isn’t legally binding until the contracts are exchanged and the deposit is paid. Further, in the time between an offer being accepted and exchange of contracts, a number of elements may be identified that would require amendments and adjustments to the terms of the contract before it becomes legally binding.
To help keep things running smoothly, it’s advisable to consider appointing your conveyancer at the same time you put your property on the market, as a lot of the detail in the draft contract and the forms which accompany it can be completed by the seller even before an offer has been accepted.
What’s included in a draft contract?
In its first iteration, a draft contract contains basic information including:
1. the agreed sale price of the property,
2. the names of the seller and the purchaser,
3. the property title reference number, and property address in full
It will also usually include the Standard Conditions of Sale, which are the standard terms utilised in most conveyancing transactions. Your conveyancer will point out any of these terms which are particularly pertinent to your conveyancing transaction.
As mentioned above, as you progress through the transaction, more information may be added to the contract ahead of exchange, typically resulting in amendments to the terms or the agreed sale price as a result of the findings of the enquiries carried out by the purchaser’s conveyancer.
The seller’s conveyancer will send the purchaser’s conveyancer a copy of the draft contract along with the fixtures, fittings and contents form, the property information form and EPC certificate of the property.
Even though the draft contract contains relatively little information at this stage, it is vitally important that the purchaser and their conveyancer ensure that all the information within the draft contract is correct as even the smallest of mistakes can make a big difference. Pay particular attention to the sale price, correct spelling of names and the title reference, as these will form the legally binding elements of the contract once exchanged.
Once all negotiations have been completed, the contract will be finalised for exchange and a completion date will be agreed between both parties, or the parties involved in the chain in the instance of multiple sales and purchases.
Now you understand the concept of the draft contract, feel free to browse our other topics or get in touch to discuss any element of your home move.
If you are unsure of anything, speak to your conveyancer and they will be able to offer you any guidance needed to understand the details of your draft contract.
If you’re looking to move home get a free instant conveyancing quote from Enact today.