The Process Of Buying A House
Buying a home is one of the most important decisions you will ever make. This is a huge step financially and requires great commitment. Understanding the process of buying a home will help you have a more pleasant house-buying experience. The following steps describe the house-buying process in England and Wales.
Determine how much you can comfortably spend on a home
Your lender can help you calculate your price range, or you can use online calculators on mortgage Web sites to determine what range of prices you should be looking at. You will need to know the net amount you expect from the sale of your current home, the amount from savings or other investments you can use to purchase a home, and the amount a lender will allow you to borrow. These three items will comprise “Total A.” One-off expenses, such as arrangement fees, survey fees, legal and conveyancing fees, Land Registry fees, stamp fees, search fees, your estate agent’s commission, and local search fees must all be considered. Ask your lender and estate agent for a comprehensive list of extra expenses included in your home purchase. The total amount of one-off expenses will be “Total B.” Subtract “Total B” from “Total A” for an estimate of the house price you should be looking for. Remember that you will have moving costs in addition to the one-off expenses.
Obtain a mortgage agreement in principle
It is best to work with a lending institution to determine how much you will be approved to borrow and get this agreement in writing. You will be able to prove to the seller that you can actually secure a loan to buy the home, and it is more likely that the seller will accept your offer if you show serious intent.
Decide which home you want to purchase
There will probably be at least several homes within your price range for you to choose from. Determine your housing priorities and narrow down your possibilities to one particular house. You will want to consider the house’s location, the condition of the house, and whether it is the type of house you prefer. You should know upfront if the property is a freehold or leasehold property. A freehold property means that you will be the sole owner of the property and will be responsible for any maintenance and repairs. If you purchase a leasehold property, you will be the owner for the length of the lease.
Choose and hire a solicitor or licensed conveyancer
The purchase of a house requires quite a bit of administrative and legal paperwork. Although it is possible for you to complete the necessary paperwork yourself, it is usually recommended that you hire a solicitor or licensed conveyancer. Look for an experienced professional that you feel is trustworthy. A referral from a friend or family member is particularly valuable. You can also use the Law Society’s solicitor directory to choose a solicitor.
Make an offer on a house
Carefully research local house sale prices, determine how motivated the seller is to sell the house, consider the overall condition of the house, and make a reasonable offer to purchase the house. Except in booming housing markets, final sale prices can be negotiated. The more information you can gather about the house and the seller, the more power you will have if the seller comes back to you with a counter offer.
Arrange for a survey and valuation to be completed
A valuation will be required by your lender. A valuation compares your property to similar properties and determines its value, taking into considering characteristics such as age, location, and general condition of the property. Buyers are typically responsible for the cost of the valuation, even though it is the lender that benefits from the information. Lenders do not want to lend more money than a property is worth. The average cost of a valuation is between 100 and 300 pounds and normally takes about 30 minutes to complete.
A homebuyer’s report is a more detailed survey of the property than a valuation. Houses between fifty and seventy-five years old that are in good condition and conventionally constructed are good candidates for these one-to-two-hour surveys. The buyer is responsible for the arrangement and payment of this survey. For convenience and cost savings, the lender’s valuation surveyor can be employed to do this. The report will contain information regarding the condition of the house, repairs needed immediately or in the future, and specialty surveys required. The cost of the homebuyer’s report depends on the cost of the house and runs between 250 – 500 pounds.
If the house is older than seventy-five years old, constructed from unconventional materials, or has had numerous alterations, a building survey is required. The cost of the survey depends on the cost of the house and can be as much as 1,000 pounds. The inspection will be extensive, and the resulting report can take as long as two weeks to complete. The report will contain every repair and maintenance item discovered by the surveyor along with estimations for completing the work required.
Complete required legal work
If you have hired a solicitor or conveyancer, he or she will be responsible for completing any necessary paperwork. If you have decided to handle the legal work yourself, make sure you give yourself enough time to complete all the paperwork in a timely manner.
Secure life assurance
Basic life assurance will cover the cost of your mortgage in the event of your death. Your family will receive a tax-free payout that can be used to repay your mortgage and ensure that they will still have a home. Work with a life assurance agent to determine the coverage and term that best fits your situation.
Sales contracts are exchanged, the transfer document is written, mortgage documents are finalised, and final searches performed
Solicitors are typically responsible for all of this paperwork. The buyer must submit a non-refundable deposit along with the sales contract. Once both the buyer and seller have signed each other’s contracts, the parties are legally bound to the sale. The transfer document moves legal ownership of the home from the seller to the buyer, and final searches will reveal any problems relating to the sale of the home.
