- What can you afford?
- The property search
- Offering on a property
- Offer accepted, surveys, and conveyancing
- Exchange of contracts
The property buying process in England, Wales, and Northern Ireland is not entirely straightforward and it helps to have it broken down and simplified. There will be differences of opinion when it comes to the order in which you do things, for example choosing solicitors, but my advice is to be as organized and prepared as possible. It is much better to be over prepared rather than have to rush important decisions later down the line.
Step 1 – What can you afford?
The first step for many people will be to look at some properties on the Internet and even go to view a few to get a feel for the market. This is a waste of time and could even set your expectations at the wrong level. Therefore the first step should always be to look at the finances. If you require a mortgage, then how much money do you have for a deposit? How much could you afford every month to pay the mortgage on top of your other monthly outgoings?
To get an accurate idea of what your budget is likely to be, book an appointment with a mortgage advisor or a bank. At this meeting you will work out fairly accurately how much you will be able to afford in terms of deposit, mortgage repayments, stamp duty, survey costs, and conveyancing. This meeting should also help you to get your head around the property buying process and the other costs involved. Some mortgage brokers call this a ‘cost of moving exercise’. Once you have worked out your budget, then you can start looking for a property!
For information on recommended mortgage advisors get in contact at: http://www.foyspropertysearch.com/servicefees/
Step 2 – The property search
This should be the really exciting part of the process. Have a list of your requirements and divide them into ‘must haves’, and ‘nice to haves’. I would suggest only having three or four ‘must haves’, but be quite strict on getting these if the budget allows.
It is also important to pin down a location and do not allow your search area to be too big. You want to be an expert in your area and you want to know about every property available in your price range so that you have confidence in any offer that you make. If the area is too big, then this is impossible and it will be much harder to know if something it overpriced or not.
To get on top of your chosen area I would advise creating a profile on the main property search engines (Rightmove, Zoopla etc.). Both websites have the ‘draw-a-search’ function where you can identify a tailored area and get email alerts about all properties that become available within your search area and criteria.
The best way however to be first in line for a new property is still through estate agents. Register with as many as possible but be prepared for phone calls! This is unfortunately part of the process and is a necessary inconvenience. Often as soon as the agent has been instructed they will call their ‘hot buyers’ – YOU WANT TO BE A HOT BUYER! They most likely will not have pictures and will have little information, however that property could be your dream home and you want to be the first to see it.
It is also advisable at this stage to speak to a few solicitors (conveyancers) and get quotes for their services. You will need a solicitor to do the conveyancing for you and it is important to use one who is efficient as well as thorough. Avoid going for the cheapest option as it will almost certainly not be worth it long term. Slow solicitors can lose you the property, and choosing a good one will give your vendor and the agent confidence in you as a buyer.
For help and advise with your search visit www.foyspropertysearch.com
How to become a hot buyer:
1. Register with an agent and build up a friendly relationship.
2. Answer all calls when possible and be responsive. Agents make hundreds of calls a day but they also have a very good memory for those that call them back or answer the phone.
3. If the property has your ‘must haves’, go and see it! You will lose instant brownie points with an agent when you ask him or her to send you the pictures before you will view it.
4. Talk about potential offers even if they are much lower than the asking price. You will come across as a much more serious buyer if you demonstrate that you are thinking about actually offering rather than window-shopping.
Step 3 – Offering on a property
This is often the scary bit, particularly for first time buyers but it doesn't really need to be. There is no legal commitment to an offer in England Wales and Northern Island, and technically you can withdraw that offer anytime up until you exchange contracts (you will however have incurred costs for surveys, solicitors etc.). Do your research on the property and look at what it has sold for previously, what others have sold for nearby, and how many boxes it ticks on your requirements list.
In most cases there will be scope to negotiate, so pitch your opening offer lower than the maximum that you are prepared to pay. Depending on other interest in the property, you have the power at this stage. Sell yourself as a buyer and demonstrate that everything is in place in terms of your mortgage and solicitor, showing that you are organized and efficient and therefore a good buyer.
Step 4 – Offer accepted, surveys and conveyancing
Now that your offer has been accepted you will need to formally instruct a solicitor to do the conveyancing, you will need to submit your mortgage application, and be prepared to pay fees for both of these. If you are getting a mortgage then the bank will organise for a mortgage valuation survey. This is for them to assess whether they would get their money back if they had to repossess the property if you couldn’t pay the mortgage. This survey will provide some notes on the general condition of the property, however if you want more detail or are concerned about something then there are other types of survey such as a home buyers survey or full structural survey. These will be an additional cost to you but may well find something important.
Conveyancing is the stage that almost invariably takes longer than everyone wants and expects. This process is basically your solicitor gathering as much information on the property as possible so that you know exactly what you are buying. It can be divided into two very general sections:
1. Searches – There are local authority, environmental, water drainage and other property searches that may or may not be applicable. You will need to pay your solicitor for these prior to being ordered. They can take a few weeks to come back depending on the local authority.
2. Enquiries – This is a very general section but it will typically be questions that your solicitor has regarding things like the lease of the property if it has one, where the property boundary lies, planning consents etc.
Step 5 - Exchange of contracts
Once you and your solicitor have all the information that you need, and your mortgage offer has been received, the contract is signed by you and the vendor. You will also be expected to transfer the deposit to your solicitor to hold on account at this stage. When these three things are done and a completion date has been agreed then your solicitor and the vendor’s solicitor will ‘exchange contracts’.
This is legally binding and should either party pull out between exchange and completion, they would incur major penalties. Very, very few transactions will not go through after contracts have been exchanged, so this is the point where all parties involved can relax.
Step 6 – Completion
This is where the final amount of money is transferred to the seller and you formally take possession of the property. The reason that there is often a delay between exchange and completion is that when a mortgage is involved the bank often requires a certain amount of time to provide the funds. The time between exchange and completion also allows both parties to prepare for moving out of their current property, whether that is giving notice to a landlord, or for removals.
Still unsure about the property buying process? Give me a call, or email me and I will be happy to help - firstname.lastname@example.org - 07823558709
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