Buying A New Home

GUIDE TO BUYING

Buying a property is a substantial, long term financial commitment where prior research and preparation will help achieve the most successful and stress free outcome. The following guide is a brief summary of the steps in the buying process.

1. Arrange Finances
2. Prioritise your Property Requirements
3. Start the Property Search
4. Arrange Viewings
5. Negotiate and Make an Offer
6. Instruct a Solicitor or Licensed Conveyancer
7. Complete the Mortgage Application Process
8. Exchange Contracts
9. Complete the Purchase

Finance
Before starting your property search you will need to decide how much you can afford. Calculate your household budget, listing all incomings and outgoings, and review any savings or proceeds from the sale of a property you may wish to use. Additional finance may be required via a mortgage which is simply a loan secured against the property. It is highly desirable to have your mortgage agreed in principle by a lender before starting your search. A good estate agent will be able to direct you to sources of mortgage finance. Aside from the purchase price there are other costs in the buying process that you may need to take into account.

BUYING COSTS CHECKLIST

Mortgage Costs
Arrangement Fee: generally dependent on interest rate, type and size of loan.
Valuation/Homebuyer Report/Buildings Survey Fee
Higher Lending Fee or Mortgage Indemnity Charge: usually required if the deposit is less than 10%
Mortgage Broker Fee: payable if an intermediary arranges the loan; typically 1% of the loan value.
Purchase cost of any Life Insurance Policy
A small checking fee may be required for a buildings insurance policy not arranged via the mortgage lender.

Conveyancing Costs
Charges for the legal work
Any Local Authority Searches
Land Registry Fee
Stamp Duty Land Tax
Bank Transfer Fees

Additional Costs
Removal Costs
Fee for Redirection of Mail

The Property Search
The most popular ways to search for property are via estate agents, the internet and property guides. You will find plenty of information regarding each property including photographs, floor plans and general area descriptions. Regular communication with estate agents is key to finding the ideal property. Prioritise your requirements such as location and size of the accommodation, as well as transport links and access to good schools and local amenities. Arrange to view the shortlisted properties and take a checklist to ask any relevant questions of the seller or the estate agent.

Negotiate and Make an Offer
The estate agent will be pivotal in the negotiating process and will be able to offer advice regarding the seller’s position and likely outcome of any offer you wish the estate agent to put forward on your behalf. Consider current market conditions, the state of the property, and the position of the seller. Once an offer has been accepted it will be necessary to appoint a solicitor or licensed conveyancer to carry out all necessary checks and undertake the legal transfer of the property. It will also be necessary to contact the mortgage lender and complete the paperwork for the loan.

The Conveyancing
The Home Information Pack (HIP), paid for by the seller, will contain basic legal information including a local authority search and energy performance certificate. The solicitor will make enquiries and searches regarding ownership of the property, fixtures and fittings, boundaries, rights of access, future development, disputes and any other enquiries he deems appropriate. He will also check any guarantees, planning permissions, buildings’ regulations certificates, as well as local authority searches. He will confirm that the seller is the legal owner of the property and prepare a “Report on Title”. Contracts will be drawn up for the purchase and sale. On exchange of contracts the completion date will be set, and the purchase and sale will be legally binding. The property will be registered in the name of the new owner and the solicitor will be responsible for ensuring payment of land stamp duty tax. On completion the rest of the purchase price will be transferred to the seller, including any mortgage monies from the lender.

CHECKLIST FOR EXCHANGE OF CONTRACTS

Organize the transfer of funds for the deposit.
Arrange buildings insurance cover to commence.
Confirm the completion date to the removal company.
Arrange to redirect mail.
Inform all relevant parties of your new address.
Give notice to utility and service providers.
On completion day take meter readings for the new property and inform the utility companies. Useful additional information regarding the property buying process can be found at www.direct.gov.uk