Buying a home can be exciting but it is important that you take your time in making the necessary enquiries and arrangements to be in the best position, including:
- Consult a mortgage broker to understand your financial position and the value of property you can afford to buy.
- Gather together all of the documents you are likely to need during the process, such as ID, payslips and bank statements. This can prevent any delays further down the line.
- As well as the cost of the property, you should also consider points such as the location, transport links, if the property is freehold or leasehold, energy performance, parking, future prospects of development, number of bedrooms etc. Make a list of your priorities and use that as your guide.
- If you are purchasing a new build property you will need to factor in the possibility of having to pay a reservation fee as well as your deposit. You will need to consider contingency plans if the building of the property does not keep to time and you should be aware of how to report snagging issues.
- Make the most out of your viewings and have a list of questions for the estate agent. This is a significant financial commitment so you should take your time while you are there, asking the agent appropriate questions. Also, do not be afraid to view the property more than once.
- Once you have found a property, you make a formal offer through your estate agent. Before doing so, you should understand exactly what is included in the purchase price, such as fixture and fittings.
- As and when you make an offer and this is accepted, you move onto the next step of the residential property conveyancing process.
There are several stages involved in a property purchase once you have had your offer accepted, which are as follows:
- You will need to appoint a Residential Property Conveyancer or Solicitor to manage the legalities involved. This will include:
- Gathering the necessary technical and non-technical documents with full details on the property,
- Completing the local authority, water and drainage, and environmental searches,
- Reviewing the contract from the seller,
- Producing a buyer’s report, known as a Report on Title,
- Raising questions for the seller to answer.
- You will be required to organise a survey to be carried out on the property and return the results to your Conveyancing Solicitors.
- Once you are happy with the details received from the seller and the contract, you will be sent a copy of the contract to sign. Signing and returning the contract means you have exchanged, which legally commits you to buying the property and neither side is able to pull out of the purchase. It is at this stage that you will fix a completion date, which is the date the purchase goes through and you can move in.
- On completion date, we will apply to obtain the funds from your lender and complete the purchase. This date will have been agreed in advance as well as a time for the sellers to have left the property by. You can then collect the keys and move in!
- We will attend to the Stamp Duty Land Tax payments and update HM Land Registry on your behalf.
If you are buying with a mortgage, you will need Solicitors for buying a house who will carry out the legal processes, including:
- Carrying out the necessary ID and money laundering checks.
- Carrying out the legal searches that are required and reporting back to you with any issues or concerns.
- Collating and reviewing the necessary documents in order to draw together the contract for purchase.
- Ensuring that the seller’s documents leave them in the position to legally sell the property.
- Confirming with you the ownership details, including factors such as boundaries.
- Explaining to you any restrictions on the property for future development.
- Making arrangements for the SDLT to be paid after completion.
- Registering you as the new owner of the property after completion.
Using Conveyancing Solicitors will mean that we can advise on other important considerations such as whether a Declaration of Trust would be useful. This confirms certain financial matters between the owners of the property, for example, how proceeds of a sale are to be split. We can also advise on the merits of other factors of property ownership, for example, being tenants in common or joint tenants.
Owning a home involves many more financial commitments than the cost of the property. You will need to budget for the following associated costs:
- Deposit – most mortgage lenders will require a deposit of at least 5%.
- Stamp Duty Land Tax (SDLT) – this will depend on the value of the property you are buying and applies to all purchases over £250,000, unless you are a first time buyer, in which case the relief is currently £425,000.
- Conveyancing fees.
- Search fees.
- Land Registry fees.
- Moving costs/removal costs.
There will also be the ongoing costs of home ownership, including, but not limited to:
- Mortgage repayments.
- Council tax.
- Any development work or changes you wish to make.
- Building and life insurances.
- Other household and utilities bills.
There are various types of survey that can be conducted on the property you are buying and the right survey for you will depend on the property. The three main types of survey are:
- Royal Institute of Chartered Surveyors (RICS) Condition Report – this is the least detailed survey available and works on a traffic light system explaining whether the property is in good repair or in need of work.
- RICS Homebuyer Report – this is a slightly more detailed survey which can give a valuation on the property; a task normally completed by your mortgage lender.
- Building or Structural Survey – this will give more detail and is particularly recommended for older homes or those that will require renovation and maintenance.
This is a difficult question to answer as this will vary depending on a number of factors, including the speed of responses from the seller and their Conveyancing Solicitor, the number of people involved in the chain and whether there are any difficulties along the way. Typically, however, buying a property can take between 8-12 weeks.
It is well known that one of the barriers to home ownership, particularly for the younger generation, is to raise the deposit to buy a home. It has therefore become common place for parents to gift the deposit to their child in order to help them take that step onto the property ladder. We would always advise that you seek appropriate legal advice before doing so, particularly due to the potential Inheritance Tax implications that could arise if you were to pass away within seven years of making the gift.
There are a variety of other ways that a parent can assist their child onto the property ladder, including acting as a guarantor on a mortgage or obtaining a joint mortgage. For either of these options, we would advise that the appropriate financial and legal advice is sought before proceeding.
Once you have moved into the property you should update the necessary organisations with your new address, such as the local authorities, your bank, utilities and water, DVLA, insurance companies and any other packages you subscribe to. You should consider other legal documents that will be important in securing your future, for example:
- Writing a Will – once you have bought a home, this will form a part of your estate should you pass away. Without a Will, this would then pass to the person or persons under intestacy rules, which may not be the person you wish.
- Cohabitation Agreement – if you are an unmarried couple purchasing a home together, having this legal document can be invaluable if your relationship ends in the future. While you will hope this will not happen after making such a commitment, it is important that you have plans in place.