What Is a Draft Contract When Selling a House?
The draft contract is the preliminary agreement your solicitor creates for your property transaction. It retains its ‘draft’ status until the exchange of contracts in the final stages, marking the moment when the sale becomes legally binding.
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What Is a Draft Contract When Selling a House??
In simple terms, a draft contract is a legal document that makes up the property transaction. This short document states the parties involved in the transaction, the completion date, and the amount of money involved. A significant part of the paperwork involved in the agreement includes issues with freehold and leasehold property.
When selling property, you must walk through all the issues in the draft contract and highlight any concern before you can sign it.
All contracts are called “draft” at the initial stages of the transaction. Because, they only specify the expected completion date.
The seller’s solicitor drafts a draft contract once they receive the protocol form, Memorandum of Sale from the estate agent, and the formal instruction to the solicitor. When all these have been received and checked, the seller’s solicitor sends the contract pack to the buyer’s solicitor.
In some cases, where the solicitor does not have a complete protocol form, they issue partial contracts to the buyer’s solicitor and forward the protocol once it has been received.
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Contract drafting process
Ideally, the contract exchange process begins before any words from both parties are recorded. The agreement between you and the property buyer is designed to protect by safeguarding your interests in court.
The draft contract should indicate the deal in question and what both parties have agreed to do. It also puts the property seller within the law so you can proceed with the exchange. It allows you to note down a negotiated deal between you and the seller. Therefore, the contract acts as a business document and reference point.
The contract can contain property prices and the timeline to completion. Also a common reference point in commercial undertakings, the draft contract becomes a legal document. It means that legal consequences and penalties could follow in a case where a party fails to live up to the end of the contract.
The agreement should note the business agreement between the two parties and be recorded so it can be used as evidence in court.
What should you check in the draft contract?
When selling property, a solicitor will prepare a draft contract on your behalf and present it to you. This draft contract is signed duly between the property buyer and seller. The first draft contract prepared by the property solicitor should have the following details.
- – The price of the property; the amount you will be paying for your property
- – The deposit amount paid by the property buyer
- – The description of the house and the physical address
- – All relevant details from the property Title Deed
- – Everything is included in the house’s sale price, such as the coach, carpets, and other items in case you’re buying a house.
- – The covenant or what you are required to do by the property owner
Well, you’ve got an offer to buy a house, and you are wondering why it should take a lot of time to complete the purchase. Since buying property to most people is a lifetime decision, it is vital that you take your time going through all documents like a draft contract.
When selling or buying property, you should check that these details are up to date and ask questions to the property solicitor where you have an issue to address.
How long is it after a draft contract to exchange?
The most common question property buyers and sellers ask when conveyancing is how long it should take after draft contracts to exchange. This is important to property sellers because they would like to know when the right time to book removal companies is and hand rental notices.
The exchange of contracts is that stage in conveyancing where both buyers and sellers cannot withdraw from the contract without attracting a penalty. In a case where the exchange of contracts occurs, the property buyer and seller will have peace of mind knowing that everything is almost coming to an end.
The completion date is the most significant in a conveyancing process for property sellers wanting to get over the whole transaction. Most property solicitors try to achieve a completion date that is a bit near. But this is not usually the case, given that there are a lot of issues to be covered.
Some solicitors face issues with chains, others don’t. All this can cause a delay in agreeing on a completion date. Other issues can also contribute to delays in meeting the completion date. For instance, where the buyer is applying for a mortgage. And takes time to get approved.
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How much time will consume for approval the documents?
How long does it take the sellers’ solicitor to send the documents to their client, and how long will it take both parties to respond to inquiries put forward?
It takes between 6 and 8 weeks to exchange, assuming that all parties in the transaction respond fast and work as a team. Some solicitors may take as long as two weeks to send initial documents to a client delaying the whole exchange process. Therefore, you should work with a property solicitor who can help you complete it in a record time.
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What Is a Draft Contract When Selling a House: Final Thoughts
There is a lot entailed in the draft contract and the process itself. When buying or selling property, all parties should exercise patience.
Most importantly, the property seller should hire a property solicitor with experience and expertise in drafting contracts. It ensures that all important issues are covered. Draft contracts are critical to establishing the authenticity and credibility of the property transaction.