Buying your House
CHOOSING A PROPERTY
The first thing you need to decide when you buy your first property is what sort of area you want to live in. Make a list of the things that matter most to you. These might include having a good school nearby, convenient local transport links and convenient shops or restaurants.
Next, you will need to decide how many bedrooms you want, whether you need a garden and whether you would prefer a house or a flat.
You may never find one property that is absolutely ideal in every respect. Be prepared to trade off one factor against another as you look around.
FINDING A PROPERTY
WHAT HAPPENS NEXT?
Once you have chosen and applied for a mortgage, the lender will want some supporting documentation. The information your lender may require includes:
- Evidence of your income and commitments, such as recent pay slips, a P60, your latest mortgage statement and your bank statements.
- Proof of identity, such as a passport or birth certificate
- Information from credit reference agencies, your employers, other lenders and your landlord.
- We will handle this documentation on your behalf and manage the process with the lender
FINDING A SOLICITOR
If you’re a first time buyer, you won’t have to worry about selling a property before you can move. But you will still need to find an experienced solicitor to carry out the conveyancing on the property you want to buy.
The job of a solicitor or conveyancer comprises the following tasks:
Carrying out a search of local planning information to uncover details of any upcoming developments, such as a new road, which could affect the property’s value.
Agreeing a date for completing which suits both you and the property’s seller.
Advising you on a draft contract for sale, prepared by the seller’s solicitor, setting out the terms of your purchase.
Obtaining the deeds which prove it legally belongs to the person you are buying from.
Researching just where the property’s legal boundaries lie and passing this information on to you.
Preparing a fixtures, fittings and contents list which makes it clear whether or not things like carpets or kitchen appliances are included in the purchase price. This enquiry form will also ask the vendor whether they are aware of any material, structural or other defects to the property that you should know about.
Conveyancing may well take longer than you had imagined, but don’t be tempted to rush matters. Your new home is probably the most expensive thing you will ever buy, so it is important to be sure there are no loose ends.
We have a range of experienced solicitors which we working on daily basis so if you would like us to recommend you one – please ask
MAKING AN OFFER
- Once you have found a property you would like to buy, the next step is to make an offer, normally through the estate agent. Most sellers build a certain amount of leeway into their price, so it is usual to offer less than the seller is asking, but this all depends on how competitive the market is and if other people are interested.
- In deciding what you are prepared to pay, bear in mind things like the property’s state of repair and how much you would have to spend on building work or redecoration.
- Your first offer might be up to 10% below the asking price. It is then up to the seller to either accept that price, or try to negotiate a higher one. If there are several potential buyers interested in that particular property, the vendor may have enough bargaining power to insist that his or her full asking price is met. Indeed, in a strong market, the property may sell for a price in excess of the asking price!
- Once your offer has been accepted, the estate agent will confirm this in writing. You can then go ahead with arranging a survey and finalising your mortgage arrangements. The acceptance of your offer is not legally binding until you and the seller exchange contracts.
GAZUMPING
If house prices are rising or there is great demand and little supply, this can create the temptation for the seller to abandon your offer if a higher one comes along. This process, known as gazumping.
Being gazumped could leave you out of pocket on expenses like the legal costs and survey fee, but that is unfortunately a risk you have to take. The sale is secured by law only when contracts have been signed and exchanged.
CONDUCTING A SURVEY
Once your offer has been accepted, a survey is required to assess the property’s condition and value. Your mortgage lender will require at least a basic valuation before allowing your loan to go ahead.
In almost every case, we recommend strongly that you get a more detailed report on the condition of the property to protect not only your lender’s interests, but your own as well.
EXCHANGING CONTRACTS
With your survey safely completed and the lender happy with it, you can move to the stage of getting a formal mortgage offer from your chosen lender, which will detail all the conditions of the loan.
By this time, your solicitor should have a draft contract ready for you and the seller to sign. Once you have signed this contract, there is no going back, so be very sure you are happy with all the sale arrangements before you commit yourself.
Typically at exchange (unless exchange and completion are on the same day), you will have to put down a deposit of 5 or 10% of the purchase price. You also need to make sure that the building is insured, as you are now legally obliged to buy it (your solicitor will help make sure that this happens).
Check that:
- Your solicitor has completed all the local searches.
- The surveyor’s report is complete and accepted by all concerned.
- You have a formal mortgage offer in writing, which you have read and understood.
- You have the agreed deposit available.
- You have agreed a firm completion date for the sale, and this date is noted in the contract.
There are no outstanding issues remaining to be settled between you and the seller.
The last point is very important. For example, there might be some doubt as to whether the property’s existing carpets are to be included in the sale price. You need to get this sorted out in writing before you sign the contract.
When you have signed the contract, your solicitor will deliver it to the seller’s solicitor in exchange for the contract the seller has signed. From this point onward, both you and the seller are legally committed to the deal.
COMPLETING AND MOVING IN
All that remains after exchanging contracts is to pay over the money needed to buy the property, less any deposit already paid at exchange, on the agreed date. Your solicitor will get the mortgage funds direct from the lender and the remainder (if any) from you, and then pass it all on to the seller’s solicitor. Once payment has been confirmed, you can collect the keys to your new home from the estate agent.
In the last week or two before the move, contact the companies that supply your gas, electricity water and telephone services to let them know you are moving out (if you are currently renting or own a property). Ask them to arrange for the meters in your old home to be read so that you do not end up paying for services the next occupant uses. You may also want to ask the Post Office to redirect your mail for a while. You will also need to let the Council know you are moving so that you are not liable for Council Tax payments at your old address.
Co-ordinate with the estate agent and the vendor to make sure that the meters are also read at your new home.
RELAX, YOU DID IT!
Finally take a moment to relax and appreciate your new home, and all the effort that has gone into purchasing it. Invite your friends over to appreciate your new home. And, of course, tell them about service Financial Expert delivered.
