First Time Buyers’ Guide to Buying a Home
Are you planning to buy your first home? Not really sure how it all works? Here is a step-by-step guide written by our conveyancing paralegal, Laura Unite.
Being a homeowner is the big dream of many and one of the most important decisions one makes. The reason is because it can be very expensive and taking on a mortgage is a major financial huge commitment. So here is a brief step by step guide on how to go about it.
1. The first step is to save, save, save! You will most likely be paying a 10% deposit and will therefore need to have this in the bank along with all the other fees and taxes involved. The additional cost includes, among other things, Stamp Duty Land Tax and Land Registry fees to change the title.
2. Look for a property that falls within your budget (based on how much savings you have). Remember, if you buy a flat then you will also have ground rent and service charges to pay. If the block has a well kept communal garden, a secure car park, a lift and other conveniences then the service charges are more likely to be higher.
3. Go and see a mortgage broker or any bank/building society to find out how much money you could borrow. Martin Lewis’ Money Saving Expert website is one of the places you may find useful to browse as it provides information on what it considers to be good rates and good services.
4. Register with agents within the local area and make sure you are on their mailing list. You can also set up email alerts with Rightmove and Zoopla, to name a few, so that you get notified as soon as a property comes on the market.
5. Make appointments to view any properties that may be of interest. They say you’ll know when you’ve found ‘The One’ and you may find that acting quickly and decisively may help you in securing an offer on a property. Estate agents would be able to provide guidance although it is to be borne in mind that the estate agents act as agents on behalf of the sellers and in the sellers’ best interest. Don’t forget that if you are looking to buy a flat to find out exactly what the extra costs will be.
6. When your offer is accepted, you need to go back to the lender so that they can formally offer you the mortgage.
7. Instruct a lawyer and ask them to explain what the fees and taxes will be. For example, you will need to pay Stamp Duty Land Tax to the HMRC. If you have been left a part of Great Auntie Mabel’s house then you may need to pay a higher stamp duty because you already own a property. Check out our articles for advice on this or ask your lawyer.
8. Consider whether you would like a full survey done on the property. This will cost you more but the surveyor will examine the physical and structural condition of the property and be able to identify any risk of subsidence (sinking), for example.
9. During this time your lawyer will be going through documentation on the property that explains who has owned it before or if there have been any disputes with neighbours that you might end up inheriting, to name a few. Your lawyer will also need to carry out a local authority search, environmental search and drainage search. A highway search may also be undertaken. If you are buying near a disused mine, parish land or an old printing factory, for example, you may need to obtain specialised searches to deal with any potential issues arising as a result of the location of the property. It is likely that you would be asked to give the solicitor money in advance to do this.
10. Make sure you keep your deposit funds intact as you need to be able to transfer it to your lawyer before contracts can be exchanged.
11. Once your lawyer is happy that they have all the information you need they will report to you so you get to see everything that we have collected and have this explained to you. You will also be signing the sale contract. You will then agree when you want to complete your purchase and actually move in.
12. The next step is exchange. In a nutshell, this is where you make a legal agreement to buy the property. There is no turning back now. What happens on exchange day is that your lawyer will speak to the seller’s lawyers on the phone, each with an identical (signed) contract in front of them, and insert the agreed completion date in the contract. They then say date the contract at which point this becomes a legally binding document and you are committed to the transaction. Your 10% deposit will be sent to the seller’s lawyers or it may be held by your lawyer to the order of the seller’s lawyers. This means your lawyer will need to send the deposit on the completion day, along with the rest of the completion balance.
13. You will be required to obtain building insurance for the property from exchange. If you are buying a flat however, it is expected that there will be building insurance in place organised by or on behalf of the freeholder of the property. Your lawyer will advise you of this.
14. You will also need to book your removals lorry, unless you are looking to make other arrangements involving friends and family that will help you do this yourself.
15. Generally speaking, completion can take place a week after exchange. In this time your lawyer will ‘draw down’ your mortgage by asking the lender to send mortgage funds to them in readiness for completion. If there is any more money required from you to complete the purchase then you will have been given a completion statement that shows exactly how much this is to enable you to send the money into your lawyer’s client account.
16. On the day of completion your lawyer will send the purchase monies to the seller’s lawyers and when they receive it then voila – you are a homeowner! You can then pick up the keys, usually around lunchtime.
17. Almost there… your lawyer will be contacting the Land Registry to register you as the new owner and once that is accomplished you will be sent the new title document in evidence of your property ownership.
When buying a property, it is essential that you stay focused on the process set out above and are not the cause of any delays. Follow the steps, put your trust in your solicitor and try and enjoy this exciting time in your life!
Our guide is just a simple overview, so if you are a first-time buyer and you would like to speak to one of our lawyers, then please do not hesitate to give us a call on 01494 773377 or email email@example.com where we would be delighted to assist you.