You have decided to buy a home
Whether it is your first, second or umpteenth purchase, a property acquisition can be daunting. Buying a house is likely to be one of the biggest financial transactions that you make. It can be a lengthy and complicated business, equally exciting as fraught with stress and worry. Fortunately there is a lot of good advice around and this is where The Law House comes in.
After finding a home you like, which can take anything from a few days to many months, the process from having your offer accepted to completion of the sale takes, on average, about 6-8 weeks. This is about twice as long as in many other countries – home buying in Britain is a notoriously drawn-out business but quick sales/purchases can be achieved.
Whilst always acting for the seller, it is in the interest of all parties for us to make your home-buying experience as easy and problem-free as possible.
How much can I afford?
It may sound obvious but it is surprising how many people start looking without considering sensibly what they can afford to spend. In today’s market conditions, most sellers require their agent to establish the purchasing ability of the buyer.
If you require a mortgage you may be asked to produce a certificate to show a mortgage has been agreed in principle. If you are a first time buyer, proof of a deposit may be required. If you have a house to sell, you need to know its value to establish the equity available for your next purchase. Expect to be asked whether you have had it valued, whether it is on the market and if it is, for how long and what interest you have had from buyers? If you are not yet on the market, why not request a free valuation now? If you are a cash buyer (do not require a mortgage and/or and have nothing to sell), you may be asked to provide proof that the funds are available for your proposed purchase. So at the outset, where appropriate, see a mortgage advisor. Not every Bank and Building Society offer matching products and terms. Shopping around can save £££’s. An Independent Mortgage Advisor will look at many mortgage products for you. If you would like to discuss your mortgage requirements with a Financial Advisor, request an appointment here.
What other options do I have?
The ever-rising cost of housing and current mortgage availability has made it difficult for first-time buyers. As a result, many are increasingly seeking other means to get on the property ladder. Buying with your friends or family are two popular options, but you could also take part in a shared ownership scheme. These schemes allow you to buy a percentage of your home, and pay rent on the remainder, with the option of increasing your share as and when you can afford it. Many of these homes are new-builds, with initial shares starting from around 25%, and the eventual option of owning the whole property.
Different housing authorities have different criteria for who can participate in shared-ownership schemes. To find out if you are eligible, take a look at the Communities and Local Government website.
What to consider when buying your first home?
Once you have decided to buy a house and found out how much you can afford, it is worth sitting down and thinking hard about what you want from your new home and what your needs are. We have made a list of some of the things you should consider when house hunting. All too often buyers, in their anxious state to get started, consider only the locality they like without thought for how many boxes that locality ticks in relation to their other requirements.
You will save a lot of your time and that of the sellers and their agents if you give consideration to things such as the whereabouts of:
• Local shops and supermarkets
• Doctors and hospitals
• Schools (junior and senior – children grow up!) and their Ofsted reports
• Transport for all occupants, roads and motorways, buses and trains
• Sports and leisure facilities
Other questions buyers often forget to consider between viewing properties and negotiating a purchase are:
• Is the property freehold or leasehold?
• If leasehold, what ground rent and service charge payments are there?
• If leasehold, how long does the lease have to run?
• Is parking on site or allocated?
• Is the property in a chain?
• How quickly do the owners/rest of chain wish to move?
• Has the vseller found a property yet?
Making your first offer on a home.
Ask sufficient questions of the selling agent to help satisfy any queries you may have and then put in an offer. Agents often ask a set price for their client’s property but sometimes that price may be qualified by words such as “Guide Price”, “Offers in Excess Of” (O.I.E.O.) or “Offers in the Region Of” (O.I.R.O.).
Depending on your personal views about the property and the price qualifier, you may choose to offer the asking price in full or perhaps above or below.
Quite often purchasers offer the full asking price if the property really suits their needs, is new to the market, and of a type which is rarely available. A full asking price offer signifies your intent – serious haggling gives off other vibes and gives time for another purchaser to move in. Don’t lose out on that dream property or rare opportunity for the sake of a few pounds. Having had your offer accepted you may well find yourself in a chain. You will also need to consider the appointment of solicitors, the arranging of the mortgage and the appointment of surveyors.
I am in a chain, what does that mean?
Nationally, on average one in three property chains fall apart. This can happen for numerous reasons, from one party not having their finances in order, to an unpleasant surprise in the survey or legal documents.
The best way to ensure a sale progresses smoothly is through good communication. Solicitors who stay in regular contact help to make sure everything possible is being done to speed things along. It can also help to stay flexible. Nothing upsets a chain more than one party trying to dictate everyone else’s plans. Be prepared to move in with your family or rent as a short-term measure if it means you can keep the chain going.
What sort of survey should I have?
If you require a mortgage to fund your purchase, both you and your mortgage lender need reassurance that the property is worth the amount of money you have agreed to pay.
All lenders require a basic valuation, but in addition you may be advised to have an independent, more detailed survey carried out as the basic valuation will only show up any obvious problems that you will probably have noticed yourself.
As well as what is known as the basic valuation, there are two main types of survey:
• The homebuyer’s report – A more detailed inspection and report than undertaken for the mortgage valuation but less detailed than the building survey.
• The building survey (also known as the full structural survey) – A thorough inspection and detailed report.
The level of survey you need depends a lot on the individual property you are buying. Naturally, they differ in cost but a saving may be achieved if the surveyor conducting the mortgage valuation is able to undertake the more detailed report from the same inspection.
The legal process and choosing the right solicitor
A conveyance is carried out by a firm of solicitors or a specialist conveyancing company. Some provide online tracking and reporting and others adopt the more traditional approach. A good solicitor, like a good estate agent or mortgage broker can be worth their weight in gold.
Once appointed, your solicitor will investigate paperwork relating to the property that has been sent by the seller’s solicitor. They will raise any questions if necessary. This may be a good point to inform your solicitor of any questions you have so that they can incorporate your questions with their own. Your solicitor will also liaise with your lender (if you are obtaining finance) and order searches relating to the property. The searches provide information about the locality of the property, any planning permissions and works carried out, drainage and water details and environmental considerations such as contamination and flood risks. Once your solicitor is happy with everything they will prepare a report for you, which will contain details of the investigative legal work carried out, together with copy documents for your retention. If you are happy with everything, you will then be asked to sign a copy of the contract and transfer over the agreed deposit, which is usually 10% of the purchase price.
Your solicitor will then exchange contracts to set an agreed completion date. Exchange is the point where the transaction becomes legally binding. On completion your solicitor will transfer the funds to the purchaser’s solicitors. Once completion has taken place, the keys will be released to you so that you can move into your dream home!
The Law House has a conveyancing department which provides excellent communication and a personal service to make your transaction as smooth as possible. If you are looking to purchase a property, please feel free to talk to us about the process, the timescales involved and the likely costs of your proposed transaction.