Buying a Home
Whether you are purchasing a house or a flat, the same 9-step process is followed.
While buying a home can seem rather daunting, our guide should help you through the process and ease the stress of what, to most people, is the most important (and expensive!) purchase they will make.
1. Finding a property to purchase
The first question most buyers will need to think about is how much money they have available to purchase a property. It can be useful to speak to a mortgage broker or a particular lender right from the start to establish the amount of funds which you can borrow and how much deposit you will need to find.
Once you know how much money you have available the next decision is the location of the property. Various factors can determine the area you want to purchase your property in such as job prospects, schools, transport and neighbourhood.
Once you have decided on the price and area, the next stage is to visit estate agents in the area or look on the internet to find your ideal property. You should arrange to view any properties which meet your criteria until you find the property which you wish to buy.
2. Having your offer accepted
Once you have found the property you want to purchase, then the next stage is to make an offer. If the property is up for sale with an estate agent then you will put your offer to the estate agent, who is under a duty to put forward all offers promptly and in writing to the seller.
Your offer will not be legally binding, even when accepted by the seller. You should ask the seller to remove the property from the market to avoid trying to be gazumped as the estate agent is legally bound to put forward any offers until exchange of contracts.
Once your offer has been accepted you then need to instruct your solicitor.
3. Instructing a solicitor
Instructing a solicitor is a very important step. Buying a house can be quite stressful and the terms and procedures can seem quite strange and confusing. It is therefore important that the solicitor which you choose is able to explain things to you in a simple and straight forward manner and is available to speak to you directly as and when you need assistance.
You should also think about the location of the solicitor to you and the house you are looking to purchase.
Once you have decided on your solicitor, the next stage is to arrange your mortgage and survey.
4. Arranging a mortgage and survey
Your mortgage can either be arranged directly with your preferred lender or alternatively you may wish to visit an independent mortgage advisor who will be able to look at all the different lenders and inform you of the products which are available and can advise you on the product which best suits your circumstances.
Once a decision has been made as to which lender you wish to have your mortgage with, then you will need to submit your mortgage application and pay any relevant fees.
If you are having a mortgage then your lender will require a basic mortgage valuation to be carried out. Very often the lender will allow you to top up the mortgage valuation to a home buyers survey or a full structural survey. Properties are always sold on the basis of “Buyer beware” and therefore it’s extremely important to ensure that you are fully aware of the defects of the property and that the property is structurally sound. Further advice can be given to you by your solicitor as to the type of survey which would be most appropriate for the property you are purchasing.
When you receive your survey you should provide a copy to your solicitor. Depending on the result of your survey, you may then need your solicitor to raise enquiries with the buyers or may need to obtain specialist reports.
5. Pre-contractual stage
Once you have received a satisfactory survey your solicitor can then proceed to look at the legal documents. The legal documents will include:
a) A Contract
b) Copies of the register of title and filed plan
c) Copy of the Lease (if the property is leasehold)
d) Sellers Property Information Form
e) Fixtures, Fittings and Contents Form
Your solicitor will raise enquiries on the basis of these documents with the seller’s solicitors and will also carry out searches such as a Local Search and Environmental Search. Other searches such as a Mining Search may also be necessary depending on the area. Further enquiries may need to be raised with the sellers solicitors as a result of the search results.
The seller does not have to tell you anything voluntarily about the property but is required to answer any enquiries raised truthfully.
Once all the searches have been received, all enquiries have been answered, and your mortgage offer has been received by your solicitor, your solicitor will then prepare a report to you. This will detail everything you need to know about the property such as what you can and cannot do with the property. Once you have read the report, you will be invited into the office to see your solicitor and to sign the contract and mortgage documentation.
6. Exchange of contracts
Once you are happy with the property you are purchasing and have signed the documentation, your solicitor will ask you for your deposit (usually 10% of the purchase price) so that you can proceed to an exchange of contracts.
This is the point where your purchase becomes legally binding and where the completion date (the day you get the keys) is set. The exchange of contracts is a telephone call between the solicitors and once contracts have been exchanged you cannot pull out of the purchase, without paying penalties under the contract.
You will need to arrange for your building insurance to start from the day of exchange of contracts.
7. Between exchange and completion
Once contracts have been exchanged your solicitor will then carry out the final checks at the Land Registry and request funds from your lender. You will be asked to provide your solicitor with cleared funds in respect of any balance to complete.
This will include the solicitors fees, stamp duty and land registry fees. Funds are requested from you and your lender to arrive the day before completion to avoid any delay on the actual completion day. You will be busy organising your removals during this period!
There is no specific time required between exchange and completion, although most lenders do require 5 working days notice to release funds.
On the day of completion your solicitor will arrange to send funds to the sellers solicitors. Once the funds have been received, the keys will be released from the estate agents and you will receive a call from the estate agents and your solicitors to confirm that completion has taken place and that you may collect the keys from the agents.
There is no set time for completion as the time is dependant on the arrival of funds with the sellers solicitors. The property is now legally yours!
9. After completion
Your solicitor will arrange to pay the stamp duty land tax (if applicable) on your behalf.
Your solicitor will receive the legal documents from the sellers solicitors and will then attend to the registering of the property at the Land Registry into your name. If you have purchased a leasehold property your solicitor will also inform the freehold owner of your purchase and deal with any of the freeholders requirements under the lease.
Once the Land Registry have completed the registration of your title, your solicitor will provide you and your lender (if applicable) with a copy of the Title Information Document showing your ownership of the property.