This month has focused on ‘getting on’ the property ladder but I often find that people who have previously bought a house sometimes forget what happens and in what order.
Here is a 12 step process to show you what to do and when:
Step 1: Speak to a mortgage broker to work out what you can borrow as a maximum (don’t get carried away!!) This really is the maximum – your dream home will always be that extra few thousand/tens of thousands/hundreds of thousands away. You can estimate your affordability and monthly payments at different purchase/deposit ratios by using online mortgage calculators.
Step 2: Think about costs and worst case scenarios. You may be able to afford the new house, but, can you afford to turn the lights on and the season ticket to work? Lots of property websites can now provide estimates of what the bill will be. Do a FULL budget planner imagining your new outgoings in the new house.
Step 3: Work out what’s important to you. What could you compromise on and what will you not? But be flexible. Every property that I have bought has always been at the edge of my predetermined comfort zone. When buying my first flat I was set on a garden, but I ended up ditching the garden idea in order to have a bigger place, 2 minutes’ walk from the station. What about schools? This might not be on your radar right now but it might well be before you sell the property. A good school in the area is also a great reason for someone to buy the property from you in the future.
Step 4: Sell yourself to the estate agent. I always find it helps to be proactive when dealing with agent’s and letting them know that you are a serious buyer. They will meet lots of buyers (especially in boom times) so it is important that you stick out in their mind as someone reliable and who turns up to appointments on time and has a clear idea of what they want and an afford. Importantly too thought, don’t let the estate agents lead you astray. Be clear about what you are trying to achieve and in which areas.
Step 5: Putting in an offer. Once you have found a property you would like to buy it is now time to put the offer in – usually via an estate agent. You can put the offer in verbally but I think that it is sensible to follow this up with an email too. The agent is then obliged to pass this offer on to the vendor. When putting in the offer it can help if you remind the estate agent about why you are a good buyer – don’t always assume that vendors choose on price alone. Important things to mention are if you are chain free & how quickly you want to move. Whether you offer is accepted or not, the estate agent must send confirmation of the offer to you in writing.
- If your initial offer is not accepted don’t panic, if you can afford to, perhaps you can offer more, or perhaps your offer will become more appealing if the offer that was accepted doesn’t work out.
- Final note of warning! Don’t get swept up in an offer frenzy! If you can’t afford the property at the new price, it obviously was not meant to be.
- If your offer is accepted, make sure the estate agent has taken the property off the market and that it is no longer advertising the property to new prospective buyers.
- Now it is time to move fast!
Step 6: Get the mortgage broker back on the case. The mortgage broker will then complete the lender’s application form and let you know a list of all the documents they need. If you aren’t using a mortgage broker you need to do the application for yourself (the lender will send them to you) and in some cases they can do them over the phone with you. Make sure that you do not make any errors on the form as this can delay the mortgage approval.
Step 7: Choosing a solicitor – the first port of call is to see if your mortgage deal comes with free legals and if so there will be a panel of solicitors that you can choose from. The solicitor will be in charge of doing the conveyancing and this is the process that enables a property to change ownership. Next thing to do is to ask for recommendations for family and friends and perhaps the estate agent too. Make sure you are choosing someone who is a meter of the Law Society and also a member of the Law Society’s Conveyancing Quality Scheme.
Step 8: Valuation – the mortgage lender will now want to carry out a valuation on the property. This will give the lender an idea of if your offer was too high or if it was fair. Keep on top of this to ensure that it is completed and keep the estate agent informed.
Step 9: Surveys – you may want to consider getting a comprehensive survey done on the property, especially if you are buying an older property. These are called Homebuyer surveys and they can avoid unforeseen repair costs down the line. Worryingly, according to the Royal Institute of Chartered Surveyors, only 1 in 5 people get this survey done.
If your survey reveals problems with the property don’t be afraid to speak up. If you pull out, other buyers are going to find the same thing (assuming they get a survey done). Firstly check if any of the problems are covered by a guarantee. Then ask the surveyor what they think it will cost to solve the problem and for major works also speak to a few builders. These estimates can then be used to renegotiate your offer to take them into account. It is important to remember that the cost of the repair work may not be just financial. You could end up living in a building site for months! So could the vendors complete the work before you move in?
Step 10: Keeping the momentum going – keep all lines of communications open especially if things aren’t going to plan.
Step 11: Exchange – this is the last time that you can still pull out! Make sure you are certain. Make sure all the queries have been answered then you can go ahead and sign the contract with the legal advice of your solicitor. Once you have exchanged, you will need buildings insurance in place to cover the building.
Step 12: Completion – This is money time!! You now need to transfer the money that you owe to your solicitor’s account. Make sure you are transferring the money to a legitimate account as this has been a ripe ground for fraudsters in the past. You will also need to pay the mortgage account fee (if applicable), your solicitor’s bill and once this is done the solicitor can register the sale with the land registry. Finally you need to pay your stamp duty – this can be a very painful amount so make sure you have worked it out in advance!!
Good Luck and wishing you a pain free experience!
Please don’t forget to pass on to family and friends who you think will benefit.
Lots of Love
Miss Lolly xx