20 November, 2015
The property-buying process can be as complex as it is exciting, especially if you've never done it before. This complex process does mean, though, that there are countless variables that can draw the process out - or worse still, make it totally fall apart. This is why moving is often listed as one of the most stressful things a person can do.
That's why understanding exactly what you're supposed to be doing and when you need to do it will make the whole thing a whole lot easier.
Below are the basic steps you can expect to take on the journey to completion.
Doing your research
We can't stress how big a deal buying a house is, regardless of whether you're a first-time buyer or a long-time investor. It doesn't matter how much money you have either - any small mistakes can be costly in the long run.
Start by researching your mortgage options, and working out how much you're likely to be able to borrow - if, of course, you need to. You'll find a few handy calculators online, and these can give you a rough idea based on your annual income and rough outgoings, but it's best to speak to a professional lender.
Ideally, you'll be able to have a mortgage agreed in principle before going any further. This will give you stronger grounds for the next stage.
Hunting for your dream home
This is a particularly exciting part, but it too requires a lot of careful thought - it's not something you want to get wrong. With the help of a reputable estate agent, start looking at what's available in your desired areas that suit your budget.
You'll want to think about more than just the asking price, as you may need to refurbish or even carry out some serious building work once you're in. You'll also have to pay solicitors, mortgage fees and stamp duty (if the property costs more than £125,000). All of this must be accounted for when determining whether a home is affordable or not.
Carry out your search armed with a list of priorities (such as area, size, features or schools). Viewings can be over in a flash, so it's best to know what you're looking for before walking in through the door.
Finalising the mortgage and making an offer
Once you've found the perfect place, get your offer in quickly - your agent will help you here, and should assist with negotiation. As is the case with any bartering, start low and let them bring you up a little. If anything, you'll just end up meeting in the middle, but having a mortgage in place and not having a chain can help you get a good deal - as you're in a strong position.
If you've already had a mortgage agreed in principle, great - now is the time to go back and get the ball rolling properly. The lender still has the right to withdraw their original offer once they've fully investigated your finances, so don't count any chickens, but if all goes well, you should be on your way.
If you're yet to start with a mortgage, you have a few options: mortgage brokers, banks and, of course, the internet. It's important to research all of them thoroughly so you know what you're getting and what suits you best.
The paperwork begins
OK, so after a bit of to-ing and fro-ing, the seller has accepted your offer and you're ready to push things a little further. What happens next? The answer is paperwork, and a lot of it.
This is where you'll need some assistance from a solicitor or licensed conveyor. They don't come cheap, but will be on hand to guide you through the legal minefields and advise on all of the complicated stuff.
Once again, you need to compare your options; don't just go for the first solicitor you find. Get quotes from a few and weigh them up with regard to reputations and services.
Your survey says...
In the meantime: your survey. Your lender will insist that you have the property professionally valued, so they know the asset they're lending against is worth the amount you're about to pay. They'll also check for things like local and planning issues that could impact the price.
There are three different types of survey, and the one you need depends on a number of factors.
Level one: A condition report - This, the most basic of survey options, shows the condition of the property, offers guidance to legal advisors and highlights anything that needs immediate action. What it won't do is look into repairs that may be needed in the future, or provide a valuation. It's aimed at conventional properties and newer builds.
Level two: Homebuyer report - This one's a little pricier, but it's also more thorough as it involves examining both the inside and outside of the property. It includes all of the above as well as a market valuation, and advice on defects (present and future).
Level three: Building survey - If you're buying an older property, or something particularly large, a building survey will be essential. It's the most comprehensive report and gives you an in-depth analysis of the property's condition, including information on defects, repairs and maintenance.
Prices go up through the levels, but a local surveyor or financial advisor will be able to help you pick the right one.
If, after the surveying, everyone (you, the vendor, the solicitor and the surveyor) is happy, it's time to sign the final contract and exchange it with the seller. This is when you pay your deposit - likely to be the biggest lump sum you'll have to part with yourself. Once this is done, both parties are committed to the sale, and it's highly unlikely that anything will collapse - pull out and you'll lose your deposit.
And finally, completion
Now you can seal the whole deal and take your new house keys and deeds. Just be aware that there will be a few bills to pay.
First and foremost, the remaining balance on the property needs to be transferred from your lender to your seller's representative via the legal professionals in between. This is the money you'll be paying off every month.
Then come your solicitor fees and, if appropriate, stamp duty. Last but not least are the removal costs. Will you move everything yourself, ask for help from friends or pay a professional? The choice is yours.
Whichever way you go, you now own your new home! Aaaaand relax.