| 1. |
The vendor puts his property on the market through estate agents. |
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| 2. |
The purchaser inspects the property through an estate agent. |
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| 3. |
If the purchaser considers the property to be satisfactory and if he requires a mortgage, he will himself, or through an estate agent or his solicitor, request an oral valuation of the property from banks and make enquiries about the basic terms of mortgages (for example, interest rate and tenor). |
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| 4. |
The vendor and the purchaser reach agreement on the basic terms for the sale and purchase of the property through the estate agent, for example, the price and completion date. |
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| 5. |
The vendor and the purchaser sign a provisional agreement for sale and purchase prepared by the estate agent. The purchaser pays the vendor an initial deposit (which is usually 3%-5% of the price). |
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| 6. |
The parties appoint their respective solicitors. |
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| 7. |
The vendor's solicitors prepare a draft formal agreement for sale and purchase, and send the same to the purchaser's solicitors for their approval. |
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| 8. |
If necessary, the purchaser's solicitors will amend the draft formal agreement to protect the purchaser's interests. |
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| 9. |
Solicitors for the respective parties agree to the terms of the formal agreement. The vendor's solicitors engross the final version of the Formal Agreement and send the same (in duplicate) to the purchaser's solicitors. |
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| 10. |
The purchaser's solicitors arrange for the purchaser to sign the formal agreement, and at the same time pay the further deposit (which together with the initial deposit usually amounts to 10% of the price) and stamp duty (in the case of residential property). |
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| 11. |
The purchaser's solicitors send the vendor's solicitors the formal agreement and the further deposit on the date specified in the provisional agreement for the signing of the formal agreement. |
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| 12. |
The vendor's solicitors arrange for the vendor to sign the formal agreement and release the further deposit to the vendor or hold such deposit as stakeholders in accordance with the terms and conditions of the formal agreement. |
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| 13. |
The vendor's solicitors return to the purchaser's solicitors one copy of the formal agreement on the date specified in the provisional agreement for the signing of the formal agreement or within such time as the purchaser's solicitors may agree (usually within three to five days). |
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| 14. |
The purchaser's solicitors arrange for payment of stamp duty on the formal agreement and thereafter for registration at the Land Registry. |
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| 15. |
If the property is subject to an existing mortgage, the vendor's solicitors will on behalf of the vendor request the vendor's mortgagee to send the title deeds of the property and to confirm the amount payable on redemption. |
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| 16. |
After receipt of the title deeds from the vendor's mortgagee, the vendor's solicitors will send the same to the purchaser's solicitors for their approval of title. |
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| 17. |
After receipt of the title deeds, the purchaser's solicitors should raise requisitions on title in writing with the vendor's solicitors within such time as is provided in the formal agreement (usually seven working days). |
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| 18. |
After receipt of the written requisitions on title, the vendor's solicitors will answer and try to resolve the requisitions before completion. |
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| 19. |
If the purchaser's solicitors also act for the purchaser's mortgagee, the purchaser's solicitors will receive written instructions from the purchaser's mortgagee before completion, instructing them to prepare the mortgage document to secure the loan to be granted to the purchaser. |
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| 20. |
After receipt of replies to requisitions on title from the vendor's solicitors, the purchaser's solicitors consider whether to accept the title. The purchaser's solicitors may insist on any requisition, until a satisfactory reply is received. |
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| 21. |
The purchaser's solicitors will before completion make enquiries with the management company or the incorporated owners of the building as to whether there are any outstanding management or other fees payable by the owner of the property. If it is revealed that there are outstanding management or other fees, the purchaser's solicitors will write to the vendor's solicitors requiring the vendor to arrange for payment of the same before completion. |
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| 22. |
If the purchaser's solicitors are satisfied with the vendor's title to the property, the purchaser's solicitors will arrange for the purchaser to execute the assignment, mortgage deed and other relevant documents one or two days prior to the completion date. The purchaser will have to pay the balance of the price (for example, 20% of the price if the purchaser's mortgagee will finance 70% of the price and 10% deposit has been paid) and the legal fees of the purchaser's solicitors. |
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| 23. |
The purchaser makes a final inspection of the property through the estate agent on or before the completion date, to verify the vendor's ability to deliver vacant possession (assuming that the vendor and the purchaser have agreed that vacant possession would be delivered to the purchaser on completion). |
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| 24. |
After inspection of the property, the purchaser should as soon as possible and in any event not later than the morning of the completion date, inform the purchaser's solicitors as to whether the purchaser is satisfied with the inspection. If satisfied, the purchaser's solicitors will arrange for the drawdown of the mortgage loan with the purchaser's mortgagee, and send the following to the vendor's solicitors to complete the transaction on or before the completion date and time specified in the formal agreement:
| a. |
Assignment duly executed by the purchaser; |
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| b. |
Balance of the price (which usually amounts to 90% of the price made up of a loan by the purchaser's mortgagee up to 70% of the price and the balance paid by the purchaser) will usually be divided into three sums pursuant to the written split-cheque instructions of the vendor's solicitors to the purchaser's solicitors before completion as follows:
| i. |
Redemption money payable to the vendor's mortgagee; |
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| ii. |
Legal fees of the vendor's solicitors; and |
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| iii. |
The net balance of the price payable to the vendor; |
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| c. |
Letter by the purchaser's solicitors to the vendor's solicitors imposing undertakings on the vendor's solicitors to deliver to the purchaser's solicitors within a specified period the assignment duly executed by the vendor, the mortgage deed relating to the existing mortgage and the release or discharge thereof duly executed by the vendor's mortgagee. |
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| 25. |
After receipt of the documents mentioned in paragraph 24, the vendor's solicitors will release to the purchaser's solicitors the keys to the property. If both parties agree, the release of the keys can be arranged through the estate agent, but usually consent to release the keys through the estate agent will be subject to receipt of the documents mentioned in paragraph 24 by the vendor's solicitors. |
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| 26. |
The vendor's solicitors will arrange for the vendor to execute the assignment on the completion date and release the net balance of the price to the vendor. |
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| 27. |
The vendor's solicitors will send the vendor's mortgagee the release or discharge of the vendor's mortgage for the vendor's mortgagee's execution together with the redemption money on the completion date, requesting the vendor's mortgagee to return to the vendor's solicitors the release or discharge duly executed within a specified period. |
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| 28. |
The vendor's solicitors will return to the purchaser's solicitors the assignment and the release or discharge duly executed within the period mentioned in paragraph 24(c). |
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| 29. |
After receipt of the assignment and the release or discharge of the vendor's mortgage, the purchaser's solicitors will arrange for stamping of the assignment. Thereafter, the purchaser's solicitors will register the release or discharge and the assignment at the Land Registry. |
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| 30. |
After obtaining the documents duly registered at the Land Registry (this usually takes a few months), the purchaser's solicitors will send the same together with all other title deeds and documents of the property to the purchaser's mortgagee for custody. The conveyancing procedure of the property will then come to an end. |