Purchasing a property can be a stressful and confusing process. There are several different processes involved, from viewing your property to completion.
- Do I need a mortgage before I start looking at properties?
- What questions should I ask the estate agent?
- Should I sell my current property before offering on a new one?
- I’ve found a property, what do I do now?
- If my offer is accepted, have I secured the property?
- How much does conveyancing cost when buying?
- What is Stamp Duty Land Tax?
- How much does Stamp Duty Land Tax cost?
- How long does it take to complete a property purchase?
- How much do I need to save for a deposit?
- When do I pay my deposit?
- What surveys do I need?
- What happens if the surveyor finds an issue with the property?
- Do I need insurance?
- What searches are carried out?
- When am I bound to my property purchase?
- When will I get the keys?
- Can I exchange and complete at the same time?
- Will the seller leave anything in the property?
- Can I buy a house that hasn’t been built yet?
Do I need a mortgage before I start looking at properties?
Beginning to look at properties is often one of the most exciting parts of the buying process. But do you need to have your mortgage in place before you start looking? The answer is that, in theory, you don’t. However, most people choose to have a mortgage in principle in place.
A mortgage in principle is a declaration from a lender that they would be happy to lend you a certain amount of money to purchase a property. Having one in place will ensure that estate agents and sellers take you seriously. The property market is competitive, so it’s essential to ensure you have everything in place to give you the biggest chance of success in securing the property you want.
What questions should I ask the estate agent?
When viewing properties, it’s a good idea to come prepared with a list of questions to ask the estate agents. This will allow you to get a better feel for the property and whether you want to purchase it. Some of the questions you may want to consider asking include:
- Why are the owners selling?
- What exactly is included in the sale?
- What is the local neighbourhood like? (Make sure to do your own research on this as well).
- How long has the property been on the market?
- When are the sellers moving, and is there a chain?
- What work has been conducted on the property, including extensions?
However, it pays to do your own research on the property and area too. Plenty of information is available online to tell you about the property, neighbourhood, and nearby sold properties and their prices – for example, the Land Registry website and sites such a Rightmove and Zoopla.
Should I sell my current property before offering on a new one?
You do not have to sell your home before you make an offer on a new one. However, some people may prefer to do so. Ultimately, it is up to you, and there are pros and cons to each option. For example, selling before you buy a new home will make you a more attractive buyer, but it may also mean you will need to rent a home while waiting for your new one to be ready.
In reality, most people try to sell their current property simultaneously as looking for a new one.
I’ve found a property, what do I do now?
Finding the house that you want to buy is the best part of the process for many people. But what happens next? Firstly, you will need to agree on a purchase price with the seller. This is usually done through the estate agent. From there, you will need to apply for your mortgage (even if you have already been offered a mortgage in principle). And you will need to contact a solicitor to act on your behalf throughout the process.
If my offer is accepted, have I secured the property?
It’s a common misconception that an accepted offer means the property is secured and will definitely be yours. At this stage, the property is considered sold subject to contract. In other words, the exchange of contracts needs to take place before you have legal ownership.
Other buyers may come in and make an alternative offer, which the seller is free to accept up until exchange. This is called ‘gazumping.’ Although it is frowned upon, it is legal and relatively common. So, be prepared for this to be a possibility.
How much does conveyancing cost when buying?
There are two main parts to the conveyancing fees you will pay. Firstly, the legal fees are what the conveyancer or solicitor charges for their work. Secondly, there are disbursements – charges for services carried out by third parties, for example, searches.
The amount you pay for conveyancing will vary on a wide range of factors. These factors may include:
- Whether the property is leasehold or freehold. Leasehold properties often include more work, so fees may be higher.
- The price of the property.
- Where the property is located. In certain locations, such as near a river, flood plain, or mine, additional searches may be needed at a further cost.
- Other fees may appear throughout the conveyancing process, such as fees to do with gifted deposits or Help To Buy ISAs, or additional Land Registry fees.
- The fees you pay may also depend on the area the solicitors are located in, as some areas tend to be cheaper than others.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax that the UK government charges to buyers when purchasing a piece of land (which may or may not include a property) that costs £125,000 or more. It applies to leasehold, freehold, shared ownership, and non-residential or mixed-use transactions.
How much does Stamp Duty Land Tax cost?
The amount you pay is based on a sliding scale. It varies between 0% and 15% of the purchase price. It depends on several factors, such as whether you are a first-time buyer, the property is a second home, or the property is non-residential. You will be advised of the exact amount of Stamp Duty you will need to pay at the start of the transaction.
How long does it take to complete a property purchase?
Once you have had your offer accepted on a property, the time it takes to complete your purchase can vary. Some property purchases can run smoothly and only take a few weeks to complete. On the other hand, some transactions can take several months if issues arise. It is hard to predict how long a particular transaction will take. But, a rough estimate is that most transactions are completed within six weeks to six months.
How much do I need to save for a deposit?
The absolute minimum amount of deposit you will need is 5% of the total purchase price. However, 95% mortgages, which are where the mortgage lender lends you the other 95% of the purchase price, are less common and not always available.
Most people aim to save at least 10% of the total purchase price. Indeed, most lenders only tend to give 90% mortgages. For example, if a property is sold for £200,000, you will need to save £20,000 for your deposit. However, you can also contribute a higher percentage. This means that you will be borrowing less from your mortgage lender, which can make it easier to secure a mortgage with better rates.
Don’t forget that you will also need to pay other fees when purchasing your property, such as solicitors fees and searches. So, it’s a good idea to ensure you have enough to cover these expenses in addition to your deposit amount.
When do I pay my deposit?
You will pay your deposit upon exchange of contracts. This is when the transaction becomes legally binding for both parties. Exchange can happen anywhere between the same day and a few weeks before completion, which is when you get the keys and the property is yours. However, this gap can often be longer, especially in the case of new builds where you may exchange before the property is built.
What surveys do I need?
When buying a property, there are all sorts of searches available. It can be confusing to work out which ones you need. The overall aim of a survey is to look at the house’s condition and flag any potential issues before you move in.
Surveys are carried out by professional surveyors, most of whom are members of the Royal Institute of Chartered Surveyors (RICS). There are several different levels of survey. Which one is right for you will depend on several factors, such as the property’s age. A professional surveyor will advise you on the most suitable type of survey for you.
The cost of surveys varies, depending on the level of survey and size of the property. Getting a survey on a property you are purchasing is not a legal requirement, but it is usually recommended to make sure there are no issues with the property that would put you off from purchasing it. So, you’ll know exactly what you’re buying.
Please note that the mortgage valuation carried out by your mortgage lender is not the same as a survey. This is designed to check that the property is sufficient collateral for the loan. It may bring up issues, but a proper survey will need to be carried out to discover the full extent.
What happens if the surveyor finds an issue with the property?
If your surveyor uncovers an issue with the property you want to purchase, there are a few options open to you. For example:
- You could choose to proceed with the purchase as usual. For instance, if there are non-urgent, non-serious issues that will not cost very much to fix, it may not be worth it to you to try to renegotiate the purchase price.
- If more serious problems are uncovered, you may want to renegotiate the property’s purchase price. For example, if the survey reveals £10,000 of work to rectify the issues, you may want to ask the seller to lower the asking price by £10,000. Or, you could try and negotiate to have the works done as a condition of sale before you move in. However, bear in mind that the seller is under no obligation to do either of these options.
- As long as you haven’t exchanged contracts, you can pull out of the sale if you are too concerned about the survey’s findings to continue.
Do I need insurance?
Legally, you do not need any insurance when buying a property. But, before you exchange on your property, most mortgage lenders will want you to have buildings insurance in place as a condition of the mortgage offer. At the point of exchange, you become legally responsible for the property, including any damage that may occur to it.
Buildings insurance typically covers issues with the entire structure of the property as well as permanent fixtures and fittings. If something was to happen, such as a fire, burst pipe, or flood, the insurance could cover the cost of repair or even rebuilding. Bear in mind that it does not cover your possessions; you will need contents insurance for this.
You may also want to consider taking out life insurance, which will help pay off the mortgage if you die during the term of the cover. And you may also want to consider homebuyer’s insurance, which will help you recover some of the costs (such as conveyancing fees) in the event of the seller changing their mind or you being gazumped (somebody else making a higher offer on the property).
What searches are carried out?
Your conveyancer will carry out several searches as part of the process. These include:
Local authority searches
These searches take a look into all of the local authority’s information about the property. This includes who is responsible for maintaining roads and paths bordering the property, planning permission, and restrictions.
Land registry searches
Your conveyancer will check that the vendor is the legal owner of the property by checking the title register and title deeds with the Land Registry.
Your lender may request these searches as a condition of the mortgage offer. They will check that your property is not, for example, built on an old landfill site, on or near contaminated water, or is at risk of subsidence.
Water authority searches
Your conveyancer will enquire with the local water authority about factors such as drainage, where your water comes from, sewer locations, and who owns the sewers, drains, and pipes.
These searches come at a cost, which can vary depending on your location. However, if you don’t have them carried out by your conveyancer, you may be at risk of not getting a mortgage offer or buying a hazardous or otherwise unsaleable property.
When am I bound to my property purchase?
You are legally bound to your house purchase after you have exchanged contracts. After this point, you are very likely to incur some form of penalty if you pull out of the sale. For example, you may lose your deposit. However, the seller is also bound to the sale at this point. So, it is highly unlikely to fall through from either side.
When will I get the keys?
You’ll get the keys to your new property on the day of completion. This is the point at which the money is transferred to the seller, and the property becomes yours. Your conveyancer will also deal with the transfer of funds, deeds, and other required documents on completion day.
Can I exchange and complete at the same time?
Yes, in theory, it is possible to exchange and complete on the same day. It isn’t widespread, as it can be hard to plan for, especially if your transaction has a chain. And, some mortgage lenders may not permit it due to the risks involved.
Will the seller leave anything in the property?
This depends. If you wish for the seller to leave something in the property (such as white goods or certain furniture items), you may be able to negotiate this with them. You may be able to get them included in the purchase price, or the seller may request you to pay extra for them if you want them. However, bear in mind that they are no obligation to leave anything in the property.
On the other hand, most people will expect that their new property is left vacant when they move in. As part of the conveyancing process, you should receive a checklist (the TA10 Fittings and Contents Form) that sets out everything that will be left in the property.
If you find that the seller has left items in the property that were not specified on the form, your first port of call should be to contact them to remove them. If they refuse, you can dispose of them. If this incurs any costs, you can request to recoup these costs from the seller. If they refuse again, you may be able to take them to Court to pursue it.
Can I buy a house that hasn’t been built yet?
If you are looking to buy a new build property that has not yet been built, you may be wondering if this is even possible. The answer is that yes, you can. This is frequently referred to as buying a property ‘off-plan’. It means that you are purchasing a property based on the plot and plans instead of the fully built property.
Download our conveyancing guides now
If you’re looking for more in depth information about the conveyancing process, we have free downloadable guides aimed at both buyers and sellers. Whether you’re a first time buyer or have done it all before, these guides are designed to help you. Click the buttons below to download one or both of the guides now:
Guide to conveyancing for buyers:
Guide to conveyancing for sellers:
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