The process of buying a house
So – you've decided to buy a house.
Congratulations! Don't celebrate just yet, though, as the hard part is only just beginning.
Luckily, we're here to give you an idea of what's to come with our rundown of the process of buying a house. We've even documented the process in our On The Ladder series here.
Let's face it – you can't buy a house if you're not yet in a financial position to do so. Make sure you've got a deposit of at least 5% of the total property value saved before you start your home buying journey.
To cover the rest, approach mortgage lenders to determine how much you'd be eligible to borrow. Don't just go with the first lender you get an offer from – play the field, so you're getting the best rate.
However, ensure that lenders are only carrying out a soft credit check, and their search won't affect your credit rating. Get an agreement in principle (sometimes known as a mortgage in principle), which will show to sellers you're a serious buyer.
Find a property
You'll have your essential, non-negotiable criteria – such as the number of bedrooms and proximity to schools and workplaces. Beyond that, consider your 'desirables' and how highly you rank their importance.
For example, would you be prepared to forego a larger garden for a property with a loft conversion, or would you rank an extra toilet above off-road parking in terms of desirability? If you're buying the property with someone else, communication is key.
Check for new listings daily and do your research into areas. Online research is vital, but don't forget to visit in person at different times of day. That sleepy high street could transform into a drum 'n' bass hotspot after dark – which may or may not be what you want.
Make an offer
You've found a place you love, and it's within budget. It's time to make an offer.
This is done in writing via the seller's estate agents, who will liaise with the seller on your behalf. Remember, the guide price is usually negotiable – you can always speak to the estate agents if you're unsure.
You're one step closer to homeownership if the seller accepts your offer.
But before you move onto the next stage and start forking out for fees, be warned. You're at one of the most tenuous points in the home buying process, as your seller can pull out at any moment. You're also at risk of being gazumped – when the seller goes on to accept a higher offer.
You'll need to start spending some serious cash in the next stages, so now is the time to protect these upfront costs by taking out Home Buyer's Protection Insurance. Then, you can proceed with confidence, knowing that if your purchase is one of the 1 in 4 which fall through in the UK every year, you won't be out of pocket.
Instruct a conveyancer or solicitor
Conveyancers and solicitors act on your behalf and take care of the legal transfer of the title deeds to you.
They will conduct the necessary legal checks to ensure there aren't any access rights disputes, environmental factors, Land Registry issues, building control issues, restrictions in leasehold terms or any quirks which will affect either the property's value or your legal ownership of it.
Conveyancing fees for buying a house can run into thousands, but they're essential for a successful sale.
Book a home survey
You'll want assurance that the property you're buying is in good condition and isn't going to cost you a fortune in repairs before you've even popped the champagne on moving day.
A home survey entails a professional surveyor attending the property to check for things like structural movement, asbestos, pests, damp, toxic plants and anything else which will turn your homeowner's dream into a nightmare.
Home surveys can vary in thoroughness depending on the age of your property, its features, and its current condition. They can cost several hundred pounds – but like conveyancing, they're absolutely essential.
Confirm your mortgage
As your offer has been accepted, you can now convert your mortgage agreement in principle into a mortgage application. Your lender will send an online form for you to complete, which will include you providing proof of employment, earnings, outgoings and identity.
Your lender will also want to conduct a valuation survey to confirm the property is worth what you're paying for it. This is so they can recoup their money if you should stop paying your mortgage.
Your lender will then send you a mortgage illustration, a breakdown of the terms, mortgage type, interest rates and fees. Make sure your mortgage illustration matches the initial offer and carefully read the mortgage conditions. It's worth getting someone else to help you cross-reference and check these documents, as any errors will cause delays or extra fees down the line.
Set a completion date
Your solicitor will liaise with both you and the seller to nominate a completion date on which to exchange contracts and transfer the legal ownership of the property to you.
Remember, until this date, the seller has no legal obligation to honour the transaction and can pull out at any time.
Your solicitor will send you a completion statement showing a breakdown of the funds you must transfer to your solicitor before the completion day. This includes deposit, Stamp Duty and fees.
Around this time, your mortgage lender will also release the funds for the property to your solicitor. Your solicitor will then transfer everything to the seller's solicitor, who will ensure it gets safely to the seller.
This is the day you've been waiting for!
On completion day, you'll get the keys from the seller's estate agent, and the legal ownership of the house will transfer to you. This is when you can finally relax and celebrate reaching this exciting milestone.
Don't celebrate too hard, though – you have the small matter of the move to organise!
Receive the title deeds
In the week or so following the completion of your sale, your solicitor should notify you that the title deeds have arrived at their office from the Land Registry. You can either keep them on file there or collect the documents yourself. The Land Registry also holds digital copies for extra assurance.
Nobody said buying a house was a stress-free process – but knowing what to expect goes a long way towards minimising the homebuying headache. Having Home Buyers Protection Insurance in place to protect your money during that nerve-wracking run-up to completion day when your sale is at risk of falling through can help, too.