The purchase process simplified
Buying a home can be a long and complex process, but there are certain steps you can follow to make it as smooth as possible.
1. Find out how much you can borrow
Call a mortgage broker to get an idea of how much you can borrow. He or she will be able to search the market for the best available deal and to help you maximise your borrowing power. But don’t stretch to more than you can comfortably meet in monthly repayments and remember to keep some savings aside to meet stamp duty and other fees, and to furnish your new home. Get information about the different mortgages on offer, and start thinking about whether you want to go for a fixed or variable-rate deal.
2. Define your criteria
Decide what you are looking for in a property – whether you need parking and a garden, how many bedrooms you need, if it’s a flat, whether you want it to be freehold or leasehold – and pick an area on which to focus your search. Consider what you want out of the location – are local schools, transport links and shops important to you?
3. Beginning the search
Start scanning the internet and local newspapers and register with estate agents. If you see a property you want to look at, call the agent and arrange a viewing.
4. Out and about
Visit some properties. You are unlikely to find the home you want straight away, so don’t despair and don’t be tempted into edging over your budget. This is probably going to be your biggest financial outlay, so it is worth waiting until you find the right place.
5. Home information pack (Hip)
A home information pack gives you information about the property to consider before you make an offer. From 6 April 2009, the Hip must be available on the first day that a property is put on the market. A Hip contains a number of compulsory and optional items. For buyers, the Hip is free of charge. The seller pays for the pack.
6. Making an offer
When you find somewhere you like, make an offer. Before you do so, try to glean as much information from the estate agent as possible. Ask how long it’s been on the market and if the seller wants a quick sale. Many buyers initially make an offer below the asking price, and often this is accepted. You may want to start low and negotiate with the agent to find a price that satisfies both parties. But if you want to be sure you get the property you like – and you think it is worth the asking price – you may want to offer the full amount straight away.
If your offer is accepted, ask the estate agent to take the property off the market and find a solicitor. If you need to find a solicitor, ask for a few quotes and follow up personal recommendations.
8. Getting a mortgage
Once your offer has been accepted, call your broker or a lender to sort out your mortgage application. At this point you will need to provide paperwork showing your income and outgoings.
Instruct your solicitor to start working on a contract.
Your lender should arrange a surveyor to value the property within a few days of agreeing the mortgage in principle. Its valuation will be very simple and you should arrange your own survey to get an idea of what problems there may be with the property. To save money, it’s worth asking if the lender’s surveyor will also put together a homebuyer’s report for you – you will have to pay for that, but not the valuation on top.
11. Next steps
Read the survey when it arrives. If there are a lot of problems with the property and you are not happy to carry on with the purchase, then act quickly to let everyone know, before you incur any other costs. If you do want to pursue the purchase, but the survey advises that you get quotes for work that needs doing, arrange for that to be done. If a lot of work needs doing, you may want to go back to the seller and renegotiate on the price you are paying for the property.
12. Exchange of contracts
After your solicitor or conveyancer has completed all the necessary checks you’ll be asked to sign a contract legally committing you to the purchase. At this point you will need to pay a deposit for the property – usually at least 5% of the price. At this point you will usually agree a date to complete the sale.
13. Book a removal van
When you know your moving date you can start organising how to get your possessions to your new home. This could involve hiring a van and doing it yourself, or hiring professional removal men. Either way, you should act fast to give yourself the best chance of finding a company to help when you need at a good price.
14. Buy buildings insurance
Your lender will expect you to have buildings insurance in place for the date of completion. It will quote a rebuild cost in its valuation – this is the amount you need to cover.
This is when the property finally becomes yours. When your solicitor tells you that the sale is completed you can pick the keys up from the estate agent.
16. Move in
Brace yourself for a house full of boxes.
Buying overview courtesy of theguardian.com.