Real Estate Transaction Model England & Wales

1. Real Estate Transaction Model England & Wales Robert Dixon-Gough With acknowledgements to Marina Vaskovitch

2. Simple Solution • Two main actors: Vendor and Purchaser • Three secondary actors: HMLR, Finance Ministry, and Local Government • Private transaction involving no other actors

3. Simple Solution VENDOR HMLR Sale Line Finance Ministry PURCHASER

4. Normal Real Estate Transaction Involves five distinct phases: Firstly, the desire to sell: • Contacting a Real Estate Agent • Valuation • Drawing up a contract with the Real Estate Agent

5. Real Estate Agent Valuation Contract for Sale VENDOR

6. Normal Real Estate Transaction Secondly, engaging a solicitor/attorney to act on behalf of the vendor for the transaction: • Vendor contacts solicitor; • Solicitor draws up contract, which is agreed by vendor; • Solicitor checks deeds and/or contacts HMLR to check vendors title to document

7. VENDOR SOLICITOR (ATTORNEY Contract for Sale Title Check HMLR

8. Normal Real Estate Transaction Thirdly, enter the Purchaser: • Contacts Real Estate Agent to view property; • If interested, commissions a building survey of property and land; • If satisfied, makes an Expression of Interest and makes an offer, which might be less than, equal to or greater than the ‘asking price’;

9. Normal Real Estate Transaction the Purchaser (continued): • The offer is made to the REA; • REA negotiates with the purchaser and advises the vendor; • The offer is either accepted or rejected.

10. Makes Offer Real Estate Agent Building Survey Expression of Interest VENDOR PURCHASER Views Property Offer Accepted

11. Normal Real Estate Transaction Fourthly, the purchaser’s commitment: • Purchaser contacts solicitor; • Solicitor draws up contract for conveyencing; • Solicitor commissions a search through Local Government and/or an external agency; • Solicitors checks the vendors right to title with HMLR

12. Normal Real Estate Transaction The final confusion (continued): • Both solicitors agree deposit; • Both vendor and purchaser sign contracts normally 28 days prior to completion.

13. Normal Real Estate Transaction The purchaser’s commitment (Continued): • Solicitors checks deeds or with HMLR for easements, restrictions, obligations, or covenants; • Solicitor makes contact with vendors solicitor; • Purchaser will require loan and all checks will be replicated by bank’s solicitor.

14. Solicitor Acting for Vendor Local Government External Agencies Solicitor Acting for Purchaser Search Contract for Conveyancing Title Check Easements Restrictions Covenants VENDOR PURCHASER HMLR

15. Normal Real Estate Transaction Fifthly, the final confusion: Solicitor for vendors: • Draws up contract and special contract; • Exchanges contracts with purchaser’s solicitor; • Proposes completion date;

16. Normal Real Estate Transaction The final confusion (continued): Solicitor acting for purchaser: • Collects deposit and passes it to vendor’s solicitor; • On day of completion, collects balance of purchase price from purchaser/bank and passes it to vendor’s solicitor • Collects sale tax (Stamp Duty) and passes it to Finance Ministry

17. Normal Real Estate Transaction The final confusion (continued): • Both solicitors contact HMLR to verify change of ownership; • Both vendor and purchaser notify Local Government of change of ownership for local land taxes.

18. Solicitor Acting for Vendor Exchanges Contracts Defines Date of Completion Agrees Deposit Collects Purchase Price Notifies HMLR & LG Local Government Solicitor Acting for Purchaser Collects and Passes Sale Tax to Finance Ministry Passes Deposit and Purchase Price to Vendors Solicitor Notifies HMLR & LG V P HMLR