A Beginners Guide to… Buying a House
Buying a house is often one of the largest and most stressful purchases you will ever make. Luckily for you, we have produced a guide to all the standout basics that will get you to signing that dotted line. We’ll start by outlining the buying process, and then go into further depth through the following sections.
Firstly, before you even start to look at houses (and to save any disappointment), you should do some thorough financial market research – or speak to a mortgage advisor. You’ll need to see what you can afford, the amount you can borrow, and the deposit you should expect to put down, etc.
Once you have a budget, the fun can start. For many, the most exciting part of buying a house is looking around different properties. Writing pros-and-cons lists, discussing how you think you’ll use spaces, and thinking about what furniture you have to put in them all factor in here.
So, now you’ve got your budget and you’ve hopefully now found a property that you like – its time to put in a formal offer. Some estate agents will give you a good gauge of what kind of offer is likely to be accepted, whilst others ones will get you to put in an offer close to or higher than the asking. This also depends on how long a property has been on the book for – the longer its been on, the more likely the vendors (property sellers) are to take an offer – or the more deluded they are, who knows.
When you put in your carefully deliberated offer, the agents will likely ask for a Decision in Principle or Agreement in Principle. This is actually the start of the mortgage process, its where the broker outlines the case to the lender to see whether it will be accepted. At this point the mortgage lender will do a credit check to make sure your payments history stacks up with their criteria. (There are various levels of credit that mortgage lenders will accept, however it is matching your credit rating to the lender that is the skill).
After receiving your Decision in Principle, the agent will put forward your offer to the vendor, in writing, in a timely manner (it is law that all offers are passed to the vendor and put in writing by the estate agent). Your offer will either be accepted, or have to be re-negotiated.
You’ve had your offer accepted now, so the agent will ask you what firm of conveyances you will use (solicitors to complete the transaction) – top tip; the agent will recommend a solicitor that they always use and claim that using this solicitor ‘will speed up the process’. Most of the time – it won’t. You can save money by shopping around, often to solicitors that aren’t local. For the UK, the Midlands, Manchester, and Wales all have large conveyancing firms that do a good job without having the price take of the South of England.
When appointing solicitors you will be expected to pay for search fees upfront and pay the balance for their services on exchange/completion of the purchase. Searches include, Local Authority, Environmental, and Water/drainage searches. If any issues crop up the solicitor should report these to you in their final report.
At this point, your offer has been accepted, the conveyancer instructed, and your mortgage application has been provisionally accepted.
You’ll have to go back to your mortgage broker at this point, to complete the mortgage application. The lender will appoint a survey (making sure the value you are buying the property is suitable and gives them enough security). They will require all the documents to prove your income and outgoings. Once all are satisfied, they’ll release a mortgage offer.
The conveyancer will then take the limelight. Once all the assessment reports have been received, the conveyancer will put together their recommendation for you on purchasing the property. You will receive and exchange contracts, at this point the sale is binding and you cannot back out (unless you want to pay everyone’s fees in the chain). The conveyancer will ask for your deposit and their fee’s along with the stamp duty to complete the purchase. On exchange, you will set a date for completion, the day you collect the keys.