Brexit, everyone pulling back from buying a property and Super-low interest rates. For the cautious, this may not be the right time to purchase a property but, the timing couldn’t be more perfect. While the process of purchasing a home can present some challenges, especially if it’s your first time, knowing what to expect, on the other hand, can make it a lot less challenging. If you would be buying a property anytime soon, this 14-step guide to buying a property in the UK will help you understand what’s involved in making your home buying experience as exciting and stress-free as possible.
1. Should you buy a house right now?
You have to factor in your plans and finances to decide whether buying a house right now makes sense. Can you afford to buy a home right now? Will renting make much sense instead?
Considering you’ll pay a deposit, will need a mortgage, and still have to pay some other, it’s important to think this through to be sure you’re not making a mistake you may regret later.
2. Do you have to sell first?
There are times when you need to sell your current house to buy your new one. Will this apply in your case? If you would need to sell before you can make your next move, you need to get smart with this, so you don’t get caught up in the dreaded property chain.
You can start the process by getting a valuation of your current property and then subtracting the outstanding mortgage. The remainder is the equity you own, which can then be spent towards the purchase of your new home.
3.Determine how much you can afford
You have to be sure about what your budget for buying a house is.
This will, however, depend on a lot of variables, chief among which is how much mortgage you can get and much deposit you will be able to save.
4. Secure financing
It’s essential to get your finances in order from the early stages of the home buying process. In this case, you’ll have to save up for a deposit and decide on what type of mortgage you’ll need.
You may want to opt for an interest-only or fixed-rate mortgage. Other types include tracker mortgage, discounted mortgage, and lots more. Understanding what this means to your home purchase will help you make an informed decision.
You can talk with a mortgage broker to help you understand this in detail. You should also consider getting a mortgage in principle, as this may also help during your home search.
5. Define what you want
So, you can’t just start looking around for homes without having a clear picture of what you want. You’ll have to paint a clear picture of what you think is your ideal home.
This can include but not limited to;
- Choosing your preferred location/neighbourhood;
- Whether you want a house, a flat or some other types;
- Whether you want one bedroom, 2, 3, 4, or more;
- Your need for a garden, lawn, or parking space;
- Proximity to schools and public transport links;
- Whether you would be ready to renovate or redecorate, etc
Doing this will help you narrow down your options and help both you and your real estate agent with home shopping since you already know where to look.
6. Look for ideal properties
Now that you know what you want, next is getting that which you want.
You can look around the neighbourhood for homes for sale, check online listings, work with a real estate agent, or check newspaper listings for homes that meet your needs and preferences.
When checking out properties, there are a few things you should look out for. These include;
- Whether you like the neighbourhood;
- Looking out for structural problems;
- Whether the house meets some of your basic needs;
- Checking if everything is in order; windows locks, insulation, wiring, electrics, etc
- Checking out for damp by looking out for signs like a musty smell, peeling wallpaper, etc.;
7. Make your offer
It’s not every time you’ll find the perfect house that meets every one of your needs and preferences. But when you finally find that one that stands out from the rest and that you can afford, you should waste no time in sending in your offer.
In making your offer, you’ll have to consider how long the property has been on the market and how much repairs and fittings will cost you, among other things.
While you can offer less than the asking price, you have to be reasonable with your offer, doing all you can to make it stand out from other competing offers.
You’ll have to contact the seller or their estate agent to make your offer.
Don’t back out easily if your offer is rejected. There’s always an opportunity for negotiation, and you can consider raising your offer even further.
8. Complete your mortgage application
Since you’ve taken the initial steps to get funding in place, this is now the point where you’ll need to complete your mortgage application.
You’ll need to approach your lender with the agreed offer to initiate this process. You’ll need a formal mortgage lender so you can exchange contracts with the seller.
The mortgage lender will need the property’s address, type of property, and the agreed-upon price. They’ll then check to see if the house is worth the amount you want to pay and whether the mortgage is what you can afford. If all goes fine, you should get your loan approved.
9. Get a home survey
Although your lender will require their valuation to be sure the property is worth the loan, this is a cursory check that won’t go beyond the surface.
You can either get a homebuyer report survey that will help you;
- Access the condition of the property beyond;
- Identify and highlight areas of major concerns;
- Highlight issues that need work or decisions before exchange of contracts;
- Determine if the property is priced reasonably; and
- Determine whether to proceed, renegotiate, or walk away from the deal.
Or better still, a full building survey, which will help you go into more details of the construction beyond the shiny surface. A full building survey will help you highlight all major and minor issues as well as an overview of potential costs of repairs and whether a specialist inspection is needed.
You’ll be better off getting the valuation upgraded or getting a full survey of your own to conduct a thorough health check on the property. This step is vital if you want to buy a house in the UK as it would help get peace of mind on your investment and help you avoid unpleasant surprises anytime soon.
10. Hire a solicitor
You’ll need someone to handle the legal paperwork involved in the home buying process. This is required to transfer ownership of the property to you, among other things. You’ll need a solicitor or conveyancer for this. The solicitor will oversee a lot of processes that include;
- Drafting the house sale contract ;
- Examining survey reports and local searches
- Sending the funds to finalize the purchase;
- Exchanging contracts with the seller;
- Transferring the title deed into your name, etc
11. Exchange contracts
Remember when we said you need to save up a deposit of 10% of the property’s sales price? This will have to be transferred to your solicitor to facilitate the exchange of contracts.
Upon the exchange of contracts with the seller, you’ll become legally obligated to buy the property from the seller. The seller as well becomes legally committed to selling to you too.
You’ll have to fix a date of completion with the seller to the seller, which can be about four weeks after the contract exchange. However, before the exchange, the solicitor must have been satisfied with the local authority searches. You must have also received a formal offer of mortgage, with the 10% deposit already available.
12. Complete the sale
On the agreed date for completion, you’ll have to pay for the property, and it becomes yours, legally. Once the payment is transferred, the property deeds will also be transferred to you, along with the keys. The property is now legally yours!
13. Move into your house
Once done with completion, the seller moves out, so you can now move into your new home. If you have any work planned out, you can start after this time. You may, however, need permission to park delivery vans, if required.
14.Pay stamp duty
You’ll be required to pay your stamp duty not later than 30 days after completion.
Your solicitor will notify you of what this will cost, along with details about disbursements and costs of their services. The solicitor will have to take care of this for you to facilitate the change of ownership with the land registry.
Buying a house in the UK can seem complicated and challenging, but being prepared will help you take the stress and difficulties out of this process.
You’ll have to make many critical decisions along the way, working with different professionals from real estate agents to surveyors, solicitors, movers, and more.
Whether you’re a first-time home buyer or an experienced buyer, having an in-depth knowledge of what is involved will help you simplify the process, make informed decisions, and get maximum value from your home purchase.
Hopefully, this guide will help you understand what’s important so you can have a great home buying experience.