Buying a home, particularly for the first time can be daunting. The decisions you make along the way could save you – or cost you - many thousands of pounds. Here’s our step by step guide to buying a home
1. Do you need to sell to buy?
If you are already a homeowner, decide whether you want to sell your property before you buy. The upsides to consider are; you will be able to pounce quickly when you do find the home of your dreams, it will remove a large amount of the stress involved with aligning a sale and purchase in a short space of time and it places you in the best possible position if you are competing with other buyers.
2. Get your finances in place
First, work out how much of a deposit for the mortgage you can get together. Think about savings, and how much you would get if you put your current home on the market and released existing equity. If you have any savings on long term deposit that you plan to use, cash them in. Lenders and their underwriters often look at a sustained period of income and expenditure before making any final decisions on what they might be prepared to lend, you should consider this carefully in advance to make sure there aren’t any ‘skeletons in the closet’ which could trip you up further down the line.
While you can’t get a mortgage before you buy, you can get a mortgage in principle, which will put you in a stronger position.
A mortgage broker can be particularly helpful if you would like advice on mortgages, to scan the full range of mortgages in the market or if you have special circumstances such as being self-employed. We work closely with Carbon Funding Consultants based locally in Weybridge, Surrey.
3. Decide where you want to live
If you want to move to a new home close to where you already live, there is little to decide
If you want to move to a different part of town, or across the country, then deciding the area is more difficult and time consuming
This is a very important decision , you must do your research thoroughly. At Grosvenor Billinghurst we have a particular focus on getting to know our buyers and their specific needs before we start recommending properties. This may be influenced by schools, work commitments and commuting, family size and even pets!
4. Make an offer – and get it accepted
Make sure you are in the strongest possible position as a buyer to get to the front of the queue.
Decide how much you want to pay, including any fixtures and fittings. Do your own research to make sure you are comfortable with the offer you are making.
Make the offer to the estate agent, along with your preferred timescales and any specific requirements you might have connected with your move and as much detail around your method of funding the purchase as possible.
5. Arrange a mortgage
You should ideally have got your finances in place as much as possible before making an offer – see step 2. If so, you now just need to go back to your mortgage company with the agreed offer and complete the process
If you haven’t got your finances in place, you must now scramble to do so as quickly as possible, before the seller loses patience.
You will need to get the lender to make you a formal mortgage offer before you can exchange contracts.
If buying with a mortgage, it is also a good time to consider whether life insurance is a good idea, this is another area Carbon Funding Consultants can advise you on.
6. Instruct a solicitor
Once you have agreed an offer on your proposed home, you need to get a property solicitor to handle the legal work to transfer ownership of the property to you. We have a great selection of reputable local solicitors who we can put you in touch with. Many of whom we have had years of successful dealings with, because they are experienced and understand the importance of clear communication. It also helps if they have a handle on the local area.
Your mortgage company might require you to go with one that is on their panel, which might make the decision for you.
The property solicitor will do the searches, such as with the local authority and Environment Agency, to ensure there are not any major problems with the property.
7. Decide if you want a survey
Your mortgage lender will require a valuation by a surveyor, to ensure that the property is a good enough to lend against. This is not a proper survey, and will only look very superficially at the property.
You can usually either get the free property valuation upgraded to a full survey, or you can commission a separate survey. This should tell you everything you need to know about the property, and alert you to any potential problems you will face once you move in. Unless you are very experienced with property, it is usually worth getting this done. Again, we have a selection of experienced local surveyors who we can connect you with.
8. Arrange a deposit
Before you can exchange contracts, you need to arrange a deposit typically between 5% and 10% of the sale price of the property, and transfer it to your solicitor.
This might be a combination of savings, or you might be able to raise it from the sale of your existing home. Your solicitor and/or mortgage broker can advise you.
9. Exchange contracts
When you exchange contracts with the seller you become legally committed to buying the property – and they are legally committed to selling it to you. If you pull out after this, your 10% deposit will be forfeited and you can be held personally liable to complete.
You should only exchange contracts after you have received the surveyors report, and any necessary action has been taken. It is also worth arranging for a removal company to quote at this stage, you will need to reserve a slot with them for packing and getting you moved.
Before you exchange contracts, you need to agree a completion date with the seller. This is something which can be discussed much earlier. If you are having a long delay between exchange and completion, make sure your mortgage offer will not expire.
You can only exchange contracts after the solicitor is satisfied with the searches, a formal mortgage offer has been received, and arrangements made for the deposit.
You need to ensure that you have buildings insurance for the property from the date of exchange, as you are responsible for it from then on.
10. Final arrangements
You need to make arrangements for the supply of electricity, gas, water and telephone service, and that the seller has got readings made. Often, it is easiest simply to change the account name for the existing suppliers to the property, rather than change suppliers, which you can do at a later date. See our moving day check-list to help you plan your move and it is a good idea to consider the best day to move.
The solicitor will inform the land registry that they are in the process of transferring ownership of your property.
Your solicitor should be liaising with the mortgage company to ensure the money will be ready for completion. You need to ensure that any balancing funds are also ready, and normally you will pay that to your solicitor before completion.
11. Complete the sale
Completion is when you pay for the property and take ownership of it, ideally this will happen before lunch but it is determined by the solicitors and the length of the chain.
On the day of completion, the money and deeds are transferred between each side’s solicitor.
12. Take possession of your new home
The seller has to leave the property by the time of completion, and you should then be able to collect the keys, normally from the estate agent. You are now free to move in, or if you are doing any building work before hand, the workmen can now start.
13. Pay stamp duty and settle up with your solicitor
After completion, your solicitor will send you an account, covering all their costs and disbursements, as well as the purchase price of the house and stamp duty.
Your solicitor will normally arrange to pay the stamp duty on your behalf, and ensure that the change of ownership is registered with the land registry.