Our Guide to Buying a Property
Purchasing a property is one of the biggest decisions you will make in your life so it’s normal to feel a little daunted by the process, especially if it is your first time buying a home. However, by planning ahead and getting the right advice beforehand, it will make everything much simpler and make you more confident when you find your dream home! Here is our step-by-step guide to buying a property and tips on how to be fully prepared as you venture into the property market!
1. Deposit
If you are purchasing a property for the first time, you will need to save for a deposit. You will generally need to try and save at least 5% of the cost of the home you would like to buy. However, by saving more it will allow you to access a wider range of mortgage deals and a lower interest rate. For example , if you want to buy a home costing £250,000, you’ll need to save at least £12,500 (5%) for the deposit.
2. Checking your finances
Before you start your house hunt you need to know what your budget will be. Speaking to a mortgage advisor early on will give you a better understanding on how much you can borrow from a mortgage lender and what deposit you may need for that dream home. They will then be able to advise you on the different available products and obtain an Agreement in Principle for you. An agreement in principle is an estimate from a lender outlining how much, in principle they would be willing to lend you. An estate agent will request a copy of your Agreement in Principle when you make an offer on a property so obtaining this beforehand will show you are a prepared purchaser. You will also need to budget for additional costs including conveyancing, surveys and stamp duty.
3. Now get out there!
So you have saved your deposit, and you have an agreement in principle from a mortgage lender. You are now ready to begin your property search and find the home you’ve been dreaming of. It’s time to get out there and view some properties! It’s a good idea to register with the local agents in the area you are searching in so that they can inform you of any suitable properties that come to the market and they may even let you know of a property before it goes onto the open market!
4. Making an offer
You’ve found a property you like and would like to make an offer? Once you know what offer you would like to put forward, advise the estate agent and provide them with a copy of your agreement in principle and confirmation of your deposit. By providing proof of your finances, it will instil confidence into the seller that you are a committed and motivated purchaser. If you are selling a property then you will also need to provide the details of your selling agent so that the chain details can be checked.
5. Offer accepted!
The seller has accepted your offer and the property is now “Sold Subject To Contract”. Congratulations! Now we are ready to start the process of purchasing a property. If you require a mortgage, then you will need to advise your lender or mortgage broker that your offer has been accepted and they can start your mortgage application. At this point you will also need to instruct a conveyancing solicitor who will act for you on your purchaser.
6. Memorandum of Sale
Once solicitors have been instructed you will receive initial protocol forms from your solicitor, it’s important to return these documents as soon as possible as this will ensure there are no delays with the purchase. You will also likely hear that a “Memorandum of Sale” is going to be issued. This document is issued by the selling agent and records the details of the sale and is the starting point of the transaction. Both the seller and buyer will receive a copy of the Memorandum of Sale along with their solicitors.
7. Draft Contracts, Searches & Enquiries
The seller’s solicitor will issue a draft contract and supporting documentation to the buyer’s solicitor who will check this through before ordering searches and raising any initial enquiries. Once your solicitor is in receipt of all searches, a mortgage offer (if required) and is satisfied with all replies to enquiries they will then provide you with a report of all findings and the final contracts for signing.
8. Exchange of Contracts
The exchange of contracts is when your solicitor and the seller’s solicitor swap signed contracts and set a date for completion. Now you can celebrate as you have a legally binding contract with the seller and a move in date! Before exchanging contracts, you will need buildings insurance in place and if you require a removal company on completion this is also a good time to get some quotes and check availability for the completion date.
9. Completion
The day that everyone has been waiting for – the day you get your keys to your new property! On the date of completion the money is transferred to the seller and once the seller’s solicitor has confirmed receipt of funds, they will provide key release. Your new home is officially yours and you can collect the keys from your estate agent!
