The Complete Guide to Buying a Property in 10 Steps
Buying a property is an exciting yet stressful experience, whether you’re a first time buyer or moving up the property ladder. From making an offer on the home of your dreams, to navigating the legal and financial paperwork, it’s easy to feel a little daunted by the many stages involved in the process.
We have put together a helpful explanation of the ten key steps of buying a property, to guide you through the process and to help you feel more at ease in this important journey.
1. Assess Costs and Your Finances
Before starting your property search, establish the size of deposit you can afford, how much you can borrow with a mortgage, and what the cost of moving will be. You’ll usually need a deposit of at least 5% of the value of the property, and the amount a mortgage lender will let you borrow depends on a number of factors, such as the size of your deposit, your income and your credit history.
On top of this, you will need to factor in any mortgage broker fees, solicitors’ fees, surveys, as well as the cost of moving and any improvements you want to make to the property.
2. Search for Properties and Register with Estate Agents
You will most likely begin your search on a website such as Rightmove or Zoopla, where you can get a feel for the types of properties available in your price range.
While it’s easy to search for properties online from your sofa, it’s also worth registering with a local estate agent. This comes with no obligation and a local agent can provide you with important local insight, as well as being aware of new properties coming to the market before they appear online.
3. Arrange Property Viewings
Once you have a shortlist of properties you like, you should arrange to see them in person. Important things to look out for when viewing a property are any damp or structural issues, whether the rooms are the right size for your furniture and storage needs, the aspect of the house and the characteristics of the local area.
Any property you are interested in buying should be viewed more than once to ensure you are fully informed before making an offer.
4. Make an Offer
Once you’ve found a property you want to buy and have decided what a reasonable offer is, contact your estate agent who can make the offer on your behalf. It’s common to offer below the asking price, but in a competitive market you may need to meet or go above this. Ahead of making an offer you should also apply for an Agreement In Principle with a mortgage provider. This makes you a more attractive buyer because it shows that you are able to secure the amount of money you need for the property from a lender, and so the seller may be more likely to accept your offer over others.
5. Apply for a Mortgage
You are not obliged to borrow from the lender who gave you an AIP; in the time that has passed since you arranged that, other mortgage providers may have released more attractive deals. Think about whether you want a fixed rate (which provides certainty) or tracker mortgage (which provides flexibility), and the length of mortgage term you are happy to commit to. This is usually 25 years, but can be shortened or lengthening depending on affordability.
6. Find and Instruct a Conveyancing Solicitor
Conveyancing is the name of the legal process that happens between you making an offer and taking ownership of the property. Conveyancing solicitors can often be found through professional recommendations (although there may be commission involved), or they can also be easily researched online and judged through reviews. The fees charged for conveyancing are generally similar whichever company you use.
7. Get a Survey Done
Property surveys are optional, but they help to assess the structural condition of the building so you are aware of any potential problems before starting the legal work. This means you can reconsider the offer you make before completing the sale, or retract it completely.
The extent of surveys required will depend on the type of property you are buying. A modern flat in a purpose built block may only need a basic condition report or the more in depth HomeBuyer’s report, whereas an older house will need a more extensive building survey.
8. Arrange a Removal Company and Buildings Insurance
The cost of removal will depend on how much you have to move and the distance to your new property. If you don’t currently own much furniture, you may be able to do the move yourself by hiring a van. As with solicitors, it’s worth researching removal companies before making enquiries with them, and be sure to confirm their availability before agreeing a completion date on your purchase.
Most mortgage lenders will require you to have buildings insurance from the day you exchange contracts, because from this point you are legally bound to buy the property no matter what happens to it before completion.
9. Exchange Contracts
‘Exchanging contracts’ happens when the buyer’s and seller’s solicitors swap legal contracts, and the buyer pays the deposit. At this point the agreement for you to buy the property is legally binding, and sales rarely fall through after this point. Although completion usually takes around two weeks after exchanging, it is possible to exchange and complete on the same day, however there may be additional solicitors’ fees associated with this.
10. Complete the Sale and Move In
On completion day, the money is paid to the seller and you can collect the keys from the estate agent and move into your new home. Now you can relax...or get straight to work on any redecorating and furnishing plans you may have!
To start your property buying journey, contact Forum Sales & Lettings today.