How to buy a house?
Sounds like a simple question, maybe, and to the over 15 million who are already homeowners in the UK, perhaps it is, but if you are looking to get on the housing ladder for the first time, or it’s been a while since you moved, then this might help.
House to sell?
If you need to sell your current home before moving, the starting point is to get a home valuation. This will let you know how much money you can put into the next purchase and will be essential information in setting your budget.
We can do this for free and without obligation, so you don’t need to worry about being pressured to put your property on the market until you are sure you want to take that step.
If you are a first-time buyer or do not have a house to sell, you can move straight to the next step.
How to set your budget?
Unless you are lucky enough to be sitting on a pile of cash, you will most likely need a mortgage on your property purchase. Put simply, a loan secured against the property you buy, which you pay back monthly over an agreed number of years.
There are lots to consider with a mortgage, and advice can only be given by someone qualified, so we recommend clients speak to a local independent mortgage broker.
You can take our recommendation or find someone yourself to give you advice. Still, either way, you need to come away from that conversation with a clear idea of your budget and, if possible, an AIP (agreement in principle) from a lender. This will prove to anyone you wish to buy from that you have at least been qualified by a lender for the purchase.
When working out your budget, ensure you have allowed for Stamp Duty, Legal/Solicitors Costs and any other moving costs, removals, refurbishments, furniture, etc.
At this point, it is worth deciding who will act as your legal representative for the purchase (and sale if relevant) as you will be asked for these details once you find a property.
The House Search
Once you have a clear idea of how much you can afford, you can start searching for a property.
Under nearly all circumstances, using web portals like rightmove.co.uk and onthemarket.co.uk is all you should need; they give you access to pretty much the whole market of available property. They also allow you to create a saved search with an email alert so you can be made aware of any new instructions or price reductions right away. This lets you get ahead of other buyers interested in the same property.
However, keep in mind that if you do have a related property to sell, then you won’t be able to proceed with a purchase until it is sold, the only alternative being a very costly and difficult-to-arrange bridging loan.
Our strong recommendation if you have a property to sell, is once you have looked to see that there are other suitable homes in your price range, you place your property on the market. At this stage, even if you receive an offer, you can accept, subject to finding a place to move to, and then continue your search in earnest.
Of course, if you don’t need to sell, you can do this immediately, which brings us to the next stage.
Making an offer
Once you have found a property you would like to buy and your finances are in place, you can look to agree a price with the owner; this normally starts with you as the buyer making an offer.
This is not a formal process and can be done verbally to the agent acting for the seller. They will ask you to confirm some details about your current situation if you have sold a property, they will want to know the estate agent details to ‘check the chain’ and they will ask you to confirm your financial position and if this is all in order then they will take your offer to the seller.
They will then come back and agree, flatly refuse, or more likely, they might make a counteroffer; you can then decide if you wish to increase or walk away. This process will continue until a figure agreeable to you both is reached, or you no longer wish to go ahead, in which case you will need to start your search again.
If a price is agreed the agent will confirm the sale in writing to you and ask you to provide solicitors’ details (as previously mentioned) to do so, and the home should come off the market.
The sale process
The sales process now takes place with lawyers working on the transaction. This runs alongside any mortgage application, which will probably include a survey of the property, alongside things like legal searches to check for any planning permissions given in the area, flood risk etc.
Once you have a formal mortgage offer and the legal work is complete, you will be asked to sign the contracts, and a date for completion (moving day) can be agreed upon.
At this point, the contacts are exchanged, a legal term that dates back to when solicitors exchanged physical contracts by hand; this is now done over the phone.
When contracts are exchanged, you are legally committed to the purchase and cannot withdraw without a serious financial penalty, normally 10% of the purchase price.
Exchange is normally 2 weeks before completion; although this can vary, it gives time between the legal commitment and completion for everyone involved to arrange practicalities like removals, broadband etc.
Completion – Getting the keys
On the day of completion, your solicitor will send the money to the lawyers acting for the seller electronically because until that money is paid, you do not legally own the property.
You will not be given the keys until the seller’s solicitors have formally confirmed the money is received, normally to the estate agent, who should have them by this point.
It can be frustrating, especially if you have a furniture van full and movers waiting. Still, unfortunately, this is how our system currently works, so keep this in mind: on very rare occasions, the banking system has a problem, and keys are not handed over until late in the day.
Our advice is, if you can, try not to move on the day of legal completion, but obviously, this is not always possible.
If we have sold your previous property or you are in a chain, your lawyer will need to receive the money for your home before they can use it to purchase your new one, so this can make things slightly more likely to cause delay on the day.
Now enjoy
Once you have the keys, you are free to move in and hopefully relax and enjoy your new home.
If you are ready to start, perhaps drop a note with the form below.