How to Buy a House Guide
Buying a house requires time and effort. It can be a daunting process, especially if you are a first time buyer. This step-by-step guide explains the entire process when buying a home, from looking for an estate agent to setting up a budget for a surveyor or a moving company.
Moving into your own home is the dream of most of the people, but sometimes, it is not always the right decision. Are advantages and disadvantages of buying a house as it is for renting.
Some advantages for buying a house are that gives you security and freedom, you do not need to deal with landlords, you can decorate it as you please, you can make money by renting it out or you can see it as a pension plan.
Whatever are the reasons for you deciding to buy a house, you need to ask yourself if it is the right choice for you, can you actually afford it? There are a number of things you need to consider before setting off on your home hunting journey.
Setting up your plan and budget would help informing your decision. You will get a clearer vision of your affordability, commitments and necessity for buying a home.
This article will cover:
- Step 1. Decide if Buying a Home is Right for You
- Step 2. Create A Plan And Set Your Budget
- Step 3. Find Out How Much You Can Borrow
- Step 4. Research Locations And Properties
- Step 5. Choose An Estate Agent
- Step 6. Property Viewings
- Step 7. Putting Forward An Offer
- Step 8. Hire a Licensed Conveyancer
- Step 9. Save Money by Getting a Property Survey
- Step 10. Exchange Contracts And Completion Day
Before you start looking at houses and mortgages, is better to actually create a plan for moving and setup a budget for all the services you will need to help you buy a house.
By writing down a plan, you have the chance to anticipate and learn what to expect throughout the buying process and most importantly, you will gain a form of structure.
When buying a house, you need to appoint a series of professionals to help you with the buying process. Some of these are mandatory, whilst others are optional – here is a summary of the main services/professionals you will need.
- Mortgage Broker or Advisor – Hiring a mortgage broker is not essential, they can help you choosing the best mortgage available to you, often having personalized deals which you would not find them somewhere else. You will need a mortgage broker or advisor when you have found a property and you are ready to put an offer on.
- Mortgage Lender – For most of the people, a mortgage is the only way they can afford a house. Usually, they are the ones to carry an affordability assessment. You will need a mortgage lender before you put an offer on because most of the vendors will ask you for a mortgage in principle.
- Estate Agent – An estate agent is crucial to purchasers as they control the viewings and the offer process, but they are paid by the seller. You will need to register interest with an estate agent as soon you have chosen where you want to live and in most cases they will provide you with updated property listings.
- Conveyancing Solicitor – You will need to hire a conveyancer no matter what because is the professional which is dealing with the legal aspect of buying a house process. You will need a conveyancer once your offer have been accepted on your dream property.
- Building Surveyor – Having a chartered surveyor is optional, but in most cases, when a buyer had a survey carried out, hidden issues have been revealed within surveyor report. You will need a survey once the offer has been accepted, but before the exchange of contracts.
- Removal Company – Having a professional moving company is optional, but can help you saving time and reduce the stress of packing and removing your belongings. You will need to book a removal company once you have your completion date.
- property deposit
- conveyancing fees
- property survey costs
- mortgage fees
- Stamp Duty/Land Transaction Tax
- removal company fees
” 4 in 5 homeowners bought a property without having a survey. This resulted in many purchasers having to spend an average cost of £5,750 in unexpected repair work after moving in. “
Need A Free Estimate?
Before you start your property search, you need to work out how much you can afford to borrow on your mortgage. By having a rough figure, you will be able to keep yourself realistic when the house hunt starts.
Mortgage lenders will carry out an affordability check for you by looking at the size of your deposit, your income and outgoings as well as your credit score.
Some of the documents they will need from you are: utility bills for proof of your current address, payslips for up to 6 months, bank statements for up to 6 months and a photo ID.
We would advise to spend some time getting your finance in order and to improve your credit score if currently is not in the best shape.
Assuming that you have the meanings for financing your buying a house process, you can start researching for the type of property and location you want to move to.
You should think of different aspects and facilities that you will need in your chosen area. Most people are using the following criteria when they decide what is the best area to live in:
- Transport links – normally a good transport linked area would be a little bit more expensive due to the higher demand. Would be useful to think about how much the commuting will cost you and how easy or difficult will be to move to and from your work.
- School catchment area – similar to transport links, a more desired area will mean a higher sale price. Would worth researching the school application deadlines for your desired schools and the boundaries – some educational institutions change their catchment area on year bases.
- Local healthcare facilities – it is worth checking what hospitals, clinics and dentist you have available in your desired area, especially if you do not drive.
- Crime levels – nobody wants to live in an area which has a high level of crime. You can check the crime level in every area of the UK using the Office for National Statistics or the Police National Website.
Now that you have all the information you need – how much you can afford for buying a house, what is your budget for moving, and what is your desired area, you should register with the estate agents in the area where you will move in.
We would recommend registering with as many local estate agents as you can because in most cases, they will send you local listings as soon something becomes available. Of course, you will always have the option to look online using platforms such as Zoopla, RightMove or OntheMarket.
You need to remember that is free to register with an estate agent and their fees are paid by the sellers and not by the buyers. The estate agents are crucial for property viewings and for the buying process in general because they are the ones to put your offer on your behalf.
As advice, we suggest looking for their reviews and searching for those which are offering a high standard of customer service and have a really good communication system in place – should not take an estate agent two days to respond.
Need A Free Estimate?
As we said before, you have the option of Zoopla or Rightmove for getting a shortlist of properties you would like to view. Also, if you registered with a local estate agent, they will organize a shortlist with available properties for you.
In today’s environment, you will have the option to take a virtual tour of a house before you decide to go and see it in real life. Of course, viewing a property in real life will help you getting a better understanding for building dimensions and the real feel of the space.
Always, make sure to ask as many questions you have while you are in the property or short after your viewing. This will help your picking process, of course you are not going to know everything about a property, but are some questions which you should ask.
For example, why is the owner selling? Who are your neighbors? Are any plans for the local area that could affect us as homeowners? What is included in the sale? For how long has the property been on the market? How long have the owners lived here? Are they part of a chain? Have any major works been conducted? Is the property listed or it is in a conservation area? How old is the property? How much are utility bills?
Once you pinned down your dream property and you seriously want to buy it, is time to make an offer. A good starting point for making an offer is to research the latest prices for nearby properties and their sold history.
Also, let the estate agent know what your circumstances are, whether you are in a chain or ready to go, if you have a mortgage in principle or not, so you will not cause a delay in the transaction.
A property is advertised with a higher price than the actual value, usually is a 5 – 10% increase. This means that you will have room to negotiate the price.
To increase your chances to get your house offer accepted, you will need to prove you are a serious buyer by having good reasoning for your offer (to get a realistic offer you should research on sold history in the area) and by showing a mortgage in principle.
Now that your offer has been put forward, the next step in the house buying process is to get a conveyancer to help you with the legal side of the process. Your conveyancer will sort out everything from inquiring about property searches to registering you as the new owner with the Land Registry.
You should choose a professional who is regulated by the CLC (Council of Licensed Conveyancers), SRA (Solicitors Regulation Authority), LSS (Law Society of Scotland) or the LSNI (Law Society of Northern Ireland).
You should be aware that even your offer have been accepted, a seller could still accept another offer from a buyer after yours. Therefore, you should not celebrate until you exchange contracts.
Earlier, a series of questions have been mentioned about what you should ask your estate agent. Some of these questions will receive answers some would not, but for your piece of mind and to save yourself from future problems, you should get a property survey.
A Chartered Surveyor will assess the property condition and structure and will highlight any issues or potential structural damages (which in most cases are hidden). You should always budget your surveying costs into your house buying plan.
We advise that you should get a property survey immediately after your offer have been accepted. This way, if the survey uncovers any potential issues, you have time to renegotiate the house price or even to pull out before you are legally bounded.
The most common property surveys requested by a buyer are:
- Building Survey – a RICS Level 3 survey which offers the most in-depth inspection and looks for specific areas and is usually recommended for older and unusual builds or if alterations are planned after the purchase.
- HomeBuyer Report – a RICS Level 2 survey which is suitable for most properties which are not too old, too complex and are not obvious signs of damage.
- Condition Survey – a RICS Level 1 survey which is the most basic property survey and is suited for modern and conventional properties.
One of conveyancer’s job is to act in your behalf when comes to exchange contracts, even if you are buying and/or selling a house. After this has been done, you are officially purchasing the property and you legally can not back out of the buying a house process without losing your deposit.
Normally, you will choose the completion day on the exchange contract stage and can be between 7 to 28 days after you have exchanged contracts. In some cases, the completion day and exchange contracts can be placed in the same day – for example, if is no chain in the purchase process.
Completion day is the final step in the house buying process and is the day when you will become the legal owner of the property. A Stamp Duty must be paid within 30 days of completion and if you are a first time buyer, you do not need to pay anything if the property price is under £300,000.
To help you with the budgeting and to give you an idea of the outgoings involved with buying a home, we created the “Cost of buying a house” Guide.