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Buying a property is always stressful, especially when you don’t know where to start or what to look for. Knowing the key steps involved in this process can help you understand where you are, what you need, and what is still left to complete from the legal side of things before you get your dream home.
Step One – Mortgage pre-approval and budget
This is the first and essential step to complete before buying a house. It is important to have enough savings to cover your deposit (usually 10% of the purchase price, though some mortgage products allow 5%), legal fees, and other costs, like searches, Stamp Duty Land Tax (first-time buyers may qualify for relief depending on the price), and Land Registry fees. After considering that, you can start searching for solicitor options and obtain a quote from your chosen solicitor to get an understanding of their fees and associated costs to help you with budgeting more efficiently.
The second thing that is important is to understand your mortgage situation and agree on it in principle. That involves speaking with your lender or mortgage adviser, providing them with the information they need, and receiving confirmation from them on whether they will approve there quired mortgage for you.
And the third thing to consider in the first step is the budget for repairs. Depending on the state of the property you want to purchase, it is important to budget for any immediate repairs you might need to carry out after buying your house.
Step Two – Offer
This step is probably the most important part of the process.
Your offer is critical to your success, as the price you’re offering should be attractive to the seller so that they feel inclined to accept it. It can be a stressful “ping-pong” game – but here’s some unsolicited advice: if you want room to negotiate on the price, usually go for an older home; if you want a price that will likely stay fixed, then go for newbuilds. Want to know what changes legally between new builds and older homes? We’ve covered it here.
It’s important that if your offer is successfully accepted, you contact your estate agent and ask them to take the house off the market. Otherwise, you can be exposed to gazumping. That’s the process of the seller withdrawing their acceptance of your offer because someone else has offered a better price, even after your offer was initially accepted.
Step Three – Instruct a Conveyancing Solicitor
At this stage, your offer is accepted, but you will need to appoint a solicitor who will be advising and acting on your behalf until the completion takes place. If you have not obtained a quote by this stage, they will also confirm the costs involved in the legal process of purchasing a home to help you budget and meet the costs.
Your solicitor will also ask you to prove your identity and the source of your funds. This is a regulatory obligation solicitors must fulfil and is often a requirement of lenders.
If you have someone who’s helping you with the deposit, the conveyancer will ask them to provide proof of identity and source of funds as well.
Step Four – Searches
At this stage, your appointed solicitor will organise searches to ensure there is nothing negatively impacting the property. The searches will include:
1. Planning – local authority search to discover if there are any detrimental planning or other notices affecting the property.
2. Water authority – search to verify that the water supply and drainage serving the property are public.
3. Environmental – to check if the property is in a flood-risk area or close to potentially contaminated land.
This stage helps to identify any issues that might influence the property’s market value or how easily it can be sold. Searches can also reveal any unexpected expenses.
Please note that other searches may be needed depending on the property’s location (for example, mining or chancel repair liability).
Step Five - Reviewing the Contract
At this stage, your solicitor will review the contract for your purchase. This will include checking the title to the property and confirming that the person selling the property has the legal right to do so. Your solicitor will also check the rights and obligations affecting the property and how these might change the way you can use the property. There will also be checks on planning permission and building regulations.
It is usual for your solicitor to raise additional questions with the seller to ensure all blank details are completed and that you have full information about the property. If you have any specific questions, you would like your solicitor to ask, you should immediately bring them to their attention.
Step Six – Conducting a Survey
Arranging a survey can help you establish the value of the property and can also indicate if there are significant repairs required or any remaining structural concerns before finalising the contract.
There are three main surveys available:
1. Valuation Report – You might hear this referred to as an RICS Level 1 Survey. This is a basic check, most suitable for properties in good condition or those that have been recently built. It will bring to your attention any significant defects or areas that need urgent repairs. A lender’s valuation is not a full survey and won’t highlight all defects - it only protects the lender.
2. Homebuyer Report – Referred to as an RICS Level 2 Survey. This survey includes an inspection of the property’s services, structural problems, damp-proofing, insulation, and the general condition of the property. This report is suitable for most standard homes that are in good overall condition.
3. Building Survey – Commonly known as an RICS Level 3 Survey. This report provides a comprehensive check of the property’s overall condition. This type of survey will:
- Identify defects, potential issues, or necessary repairs.
- Point out issues or defects that may need attention.
- Identify causes of past or ongoing deterioration.
- Provide an estimate of the cost of any works that may be required.
- Recommend conservation and maintenance.
You may want to choose this survey when buying a spacious, ageing, or neglected property, or if you’re planning big changes after buying.
The cost of the surveys is fully dependent on how detailed they are.
Step Seven - Setting up your buildings insurance policy
From the date of exchange, you are responsible for the property and must have buildings insurance in place. This protects your home if it’s damaged or destroyed.
Step Eight - Final review and exchange of contracts
This will be the stage where your solicitor will prepare a report on title for you. This reviews the information the solicitor has received so far and discusses the terms of the contract with you. This report will include all the documentation that you need to sign to proceed with buying the property.
It is crucial for you to read through that report carefully and talk through any last questions or worries with your solicitor before you sign.
Once signed and exchanged, the contract is legally binding on you as well as on the seller, so you will be obligated to proceed with the purchase.
After the contract has been signed, you will need to pay a deposit (normally 10%, unless a lower deposit is agreed with the seller) and agree on a completion date.
Step Nine – Preparing for completion & completion
Your solicitor will arrange for the release of your mortgage funds in preparation for completion. In addition, you will receive from your solicitor a completion statement setting out the balance required for completion – this includes any extra money you’re putting towards the property and the costs of buying it, such as Stamp Duty (SDLT). This payment must be made before your solicitor can finalise the purchase with the seller’s solicitor.
On completion, your solicitor will pay the balance of the price to the seller’s solicitor. As soon as the seller’s solicitor receives the money, they’ll let the estate agent know to give you the keys.
Step Ten – Post-Completion
Once completion is finalised, your solicitor will pay the SDLT and register you as the owner with the Land Registry. Your solicitor will also serve any required notices on the freeholder or management company if the property is leasehold, or if the property is a freehold within a managed estate.
If all of the steps in this guide are complete, then congratulations: you are now the owner of your new home. Now it’s time to relax and enjoy your new home until it’s time for your next move!
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