Step by step: How to buy a property…
Finding an appropriate property.
Location location location, in most cases you can change or update the property to your liking but it’s very difficult to change the local surroundings.
Bare in mind: transport links, schools, amenities – all of which will reflect the value of a property
It might be at this point that you obtain a mortgage in principle.
If it’s for sale through an agent you will need to submit a bid to the agent, this isn’t always the asking price; it’s worth checking what similar properties in the area sold for, as a guide price.
The agent will then submit the bid to the seller and the seller will confirm whether they’d like to accept the offer, deny or may comment to encourage a slightly better offer. If at this stage the seller receives a number of bids, they may request sealed bids, which is when all prospective buyers submit their highest, final offer for consideration as well as their position as a buyer (i.e first time buyer, currently renting etc), the seller then picks the most applicable candidate. Please note the most applicable buyer might not have submitted the highest bid.
Once your offer has been accepted, ensure that the agent will take the property off the market whilst you engage in the legal activity of transferring the ownership; this can take between 2 weeks and 6 months (sometimes more) typically depending on the complexity of the sale.
Typically buyers will be expected to be able to provide a deposit of around 10% of the property purchase price and will need to make up the rest, normally this is done through a home loan, commonly known as a mortgage.
The deposit is not paid at this point.
[If you don’t require a mortgage please skip step 5]
Obtaining a mortgage.
Finding a mortgage is normally done through a mortgage broker or a financial advisor, both of which can be recommended to you by the agent. You can also visit you local bank for advise and mortgage options.
Typically you don’t pay for these services, the mortgage company will pay them commission for your agreement, although the mortgage company will often charge you an arrangement fee, but will normally add this in to the loan sum.
The larger your deposit, and therefore the smaller proportion of loan to value, the lower the interest rate.
Also the more secure your employment, and therefore your ability to repay and keep up your repayments of the loan, the lower the interest rate (because you are less risky).
Having secured a mortgage offer you will need to instruct a solicitor to handle the conveyance (paperwork of the sale).
The company offering the mortgage will likely have a list of approved solicitors.
The cost of the conveyance will depend on the amount of paperwork involved, leasehold properties typically demand more paperwork thus higher solicitor fees. Costs are either fixed or variable. A fixed cost allows you to budget, because you’ll know exactly how much the final bill will be (providing no additional work is needed – if so, they’ll charge an hourly rate on top)
The solicitor will establish contact with the agent and the solicitor of the property seller (the person you’re buying the property off), and the solicitor representing the mortgage company.
The solicitor will undertake a number of property checks on behalf of you and the mortgage company, typically these will include structural surveys, land registry (check ownership of title deeds), checks on any shared infrastructure (communal areas, shared fences or stairways), environmental hazards and any liabilities or right of ways over the property.
If at this stage the buyer would like further security checks such as a more detailed survey or further information, this is sometimes called a homebuyers report, this will be something that the buyer needs to organise and pay for outside of the solicitors checks (and fee).
On satisfactory of completion of all property and ownership checks and when the mortgage company are happy to proceed, you can start the two part process of transferring ownership.
Part 1: Exchange of contracts – the solicitors will use a standard contract that explains the sale and transfer of ownership of the property; this will be signed and exchanged between the two solicitors (solicitors acting on behalf of the seller, and the solicitor acting on behalf of the buyer). Upon exchange of contracts you are committed to the sale and you will be liable to (typically) 10% of the purchase price, this is normally the deposit amount that your solicitor should be holding at the time.
Part 2: The completion – there is normally 5-10 working days between the exchange of contracts and official completion, this is to allow time for funds to be requested and transferred from the mortgage provider to the buyers solicitor in readiness for the completion stage where the funds are transferred to the sellers solicitor and the title deeds are given to the buyers solicitor who will pass them on to the mortgage company as typically this is their security against the loan.
At this point the solicitor will pay stamp duty on your behalf, which you will then pay to the solicitor as part of your solicitor bill.
As soon as you own the property you are liable for it so insure it. For more info on home insurance click here.
Move the utilities into your name, and take any meter readings necessary (gas, electricity and water).
Please note, if you’re going to change cable and telephone suppliers, the providers need roughly 1-2 weeks notice to switch suppliers or set it up in the first place.
Register for council tax- typically as soon as the property is in your name you will get a notification via mail which they will have got from the electoral register to instruct you on how much your monthly bill will be.
Your council tax is based on the size of the property.
For more information on council tax click here.
Now choose your curtains and enjoy.