The Home Buying Process Explained
Are you planning on buying a house? It can be a long process which can entail quite a lot of paperwork, which is why we built this checklist for you: everything you need from your first step through to completion.
Step 1: Speak to your mortgage adviser
You need to speak to your mortgage adviser to make sure that can afford to buy a property. Our financial partners SPF Private Clients can help by giving you a detailed overview of your financial situation. They take all details into consideration – your income, debt, gym membership, grocery spending, etc. and calculate which mortgage you could get and then finalise the budget for your new property.
They will lay out all other fees for you as well, such as stamp duty, survey fees, registration fees, solicitor fees, moving fees and so on.
What you’ll need:
- Last 6 months’ payslips (typically you are only asked to produce the last 6 months at the time a mortgage application is submitted)
- 2 years of bank statements
- Proof of employment contract
- Your passport
- Proof of address
- Proof of any debt
- Proof of help to buy scheme (if applicable)
- Proof of anyone lending you any money (if applicable)
- Proof of your savings
Step 2: Looking for a property
What you need to do:
- Think about what you want and what you need in your property. How many bedrooms do you need? Is it necessary for you to have outside space? What transport options do you require? It might be helpful to make a list of your wants and needs
- Search for properties online. If you’re looking in London, James Pendleton is the best place to start your search; you can sign up for an account and store properties in your wish list to keep tabs on them, book viewings and sign up for alerts
- Book in some viewings. On the viewing, ask the agent lots of questions and really get a feel for the property. See how many of your requirements the property matches and see how conveniently the property is located for you
Step 3: Get a Solicitor
Hiring a conveyancing specialist before you decide on a property will make the process smoother because after the offer is accepted, the legal process will take place right away.
Our partner Elite Conveyancing can connect you to expert conveyance specialists.
What you need:
- Your identification documents
- Your visa (if applicable)
- Whether you are buying with a mortgage
- Property address and details
Step 4 (optional): Homebuyer Survey
This is an optional step, but you could hire RICS Surveyor to evaluate the property before you make an offer. You’ll have to pay around £400 for the survey. They will do a visual inspection of the property and report on the condition of the property and flag any potential ‘red lights’.
Step 5: Before making an offer
An offer is essentially a statement that you would like to buy the property, and how much you are willing pay. You are not legally committed to the offer until exchange of contracts.
At this stage, the estate agent will need to confirm whether you can afford the offer you would like to make. At James Pendleton, all offers have to pass through our broker, SPF Private Clients, regardless of whether you have a broker elsewhere. You will need to have the details of how much your deposit is, and your solicitor’s details at this stage.
Understand the seller’s position, are they buying another property? Is the property you’re buying tenanted? Are there any other time constraints on the completion?
Step 6: Making your offer
Put your offer forward to your agent. Remember you don’t need to offer the full asking price. Your agent will speak with the vendor regarding your offer. It’s the agents’ job to negotiate on your behalf, and they will relay all conversations between you and the seller. It may be necessary to increase your offer to secure the property – remember to check with your broker what the maximum you can borrow is, and ensure you don’t increase your offer to a level which is unaffordable for you.
If your offer is accepted, your agent will cross check the timetables between you and the seller to make sure all information is transparent to both of you. At this stage, you’ll put together a loose time-frame for the purchase of the property.
What you need to do:
- Ensure that your broker is aware that your offer has been accepted and the purchase price that has been agreed. Your broker will then commence all the paperwork necessary
- Contract your conveyancing solicitor to work on your behalf. You’ll need to ensure that your solicitor has money in their account to complete the Local Authority Searches, and that you have sent all the forms and proofs of identity and address across
Step 7: Sales Process
Completing the conveyancing is the longest process of the buying journey. There are usually two processes taking place in parallel: the legal process which is mandatory, and the financial process if you’re purchasing with a mortgage.
We will walk you through it.Legal Process:
- Your agent will issue a memorandum of sale, a document that addresses everybody and conditions of the property offer
- The seller will fill out three questionnaires (Protocol form, leasehold form (if applicable), and a fixtures and contents form)
- Seller’s solicitor will then draft a contract, and send it to your solicitor
- Your solicitor will cross-examine the legality of the contract and decide if they agree with the legal position of the contract
- Your solicitor will apply for different types of searches (environment, local authority, etc)
- Your solicitor will send you the final contract once they are satisfied with the legality of it
- You sign the contract and return it to your solicitor
- You propose a completion date (the date you move in)
- The seller accepts the contract
- Exchange contracts
In order to exchange contracts, you will need to pay the deposit on the property, which is usually 10%, though it can be more or less, with agreement from your vendor’s solicitor. This is done by securely transferring the money to your solicitor, who will transfer the money to your seller’s solicitor.Financial Process:
- Your broker will look at the different options available to you. You will then decide which mortgage option you would like to proceed with based on your eligibility and requirements
- Apply for your chosen mortgage
- Agree on the terms with the lender (amount to be borrowed, duration of loan, interest rate etc)
- Underwriters will then perform mortgage valuation, check the value of the property and check that you can afford the repayments
- Send a surveyor to look at the property to make sure it’s structurally fit
- If all the lenders’ criteria are adhered to, a mortgage offer will be issued
If you are not purchasing the property with the help of a mortgage and are buying using 100% cash, the financial process will not need to be adhered to.
If you would like to, you can also commission a survey whilst the conveyancing is taking place. There are several different types of survey, so it’s wise to ensure you’re getting one which looks to cover your requirements and to obtain a survey from a reputable company. Your agent should be able to point you in the direction of a suitable surveyor.
Step 8: Completion
For the last step, you need to:
- Pay for the rest of the property via your solicitor (usually 90%)
- Pay Stamp duty to your solicitor (I.e. tax on the price that you paid for the property)
- Move in!
That’s it! The whole process usually takes 3 to 6 months, but if you are well-prepared, it could be cut down to a shorter time.
Remember, communication is key. Communicate with your agent, your solicitor and your broker frequently to make sure you know what’s happening and so that you can anticipate what you need to do next. Pro-activity and communication are the keys that will make the whole process go quickly and smoothly.
At James Pendleton, we are more than happy to support you, just call or email us anytime, we would love to have a chat with you.