Whether you’re preparing to buy your first home or your tenth, understanding the intricacies of property purchasing is crucial. While the process of buying a property can feel overwhelming, breaking it into manageable steps makes it significantly more approachable. Here are some essential steps to guide you through buying a property:
1: Buying a Property: Financing & Costs
Before you dive into homeownership, it’s crucial to grasp the financial aspects. From the initial down payment to ongoing costs like repairs and maintenance, homeownership comes with various expenses. You’ll also need to determine how you’ll finance your purchase, whether it’s through a traditional mortgage or alternative lending options.
Upfront Costs
A crucial step in the home-buying process is the earnest money deposit. Once your offer is accepted, you’ll need to provide a deposit, usually between 5-10% of the purchase price. This deposit signifies your commitment to the purchase and is typically held in escrow until closing, where it’s applied to your down payment.
Valuation Fees:
The lender requires a valuation fee to assess the property’s value. This appraisal is carried out by a professional appraiser and is used to establish the property’s worth. The fee typically ranges between £300 and £500. The primary purpose of the valuation is to safeguard the lender by ensuring the property is not worth less than the sale price, which could put them at risk if you default on your mortgage.
Stamp Duty
Stamp Duty Land Tax (SDLT) is a tax imposed by the UK government on the purchase of property. The specific amount of SDLT you’ll owe will vary based on the property’s value, with higher-priced properties generally incurring higher taxes. First-time buyers might be able to get a discount on SDLT or complete relief.
Mortgage Costs
If you’re using a mortgage to fund your property purchase, there are additional costs to consider. These may include an application fee, typically ranging from £100 to £200, and the valuation fee previously mentioned. If your deposit is less than 20% of the purchase price, you might also need to pay for mortgage insurance. Additionally, lenders may charge a product fee for providing the mortgage, which could be as high as £2,000.
Survey Costs
Another potential cost is the survey, conducted by a professional surveyor to evaluate the property’s condition. Unlike a valuation, which focuses solely on the property’s value, a survey provides insight into any necessary repairs or potential issues. Survey costs generally range from £250 to £500 and are well worth the investment to identify problems before committing to the purchase.
Step 2: Search For A New Home
To streamline your home-buying journey, register on leading property portals like Rightmove and Zoopla. Given the potential speed of the selling process, it’s beneficial to have a clear vision of your ideal home. Once you’ve shortlisted a few properties, contact the estate agents to arrange viewings.
What to Look For in Your New Home:
When viewing a property, pay attention to the first impression. Does it feel inviting and align with your lifestyle? While exploring, be mindful of signs of dampness, cracks, peeling paint, mould, or musty smells. Remember to consider the surrounding area’s safety, accessibility to public transport, and nearby amenities before making an offer.
Once you’re ready to make an offer, your agent will submit it to the seller. The seller can then accept, reject, or propose a counteroffer. Agents often act as intermediaries, balancing the seller’s expectations with the buyer’s budget.
Step 3: Viewings & Making Offers
Viewings allow you to assess the property in person and determine if it aligns with your needs. In today’s competitive market, acting quickly is crucial. Properties can receive multiple offers and even sell before official listing. If you’re interested in a property, don’t hesitate to ask for a second viewing.
Ask the seller about the property’s history, including the age of the boiler, window replacements, and any past issues with dampness or mould. Honest answers are crucial. For leasehold properties, inquire about the lease length, service charges, and any restrictions.
Step 4-: Legal Aspects: Solicitors and Conveyancing Lawyers
A conveyancing solicitor is essential for the legal side of your house purchase. They’ll conduct comprehensive checks, including verifying planning permissions for any extensions and confirming the property’s connection to the public sewer. Your solicitor will also review the title deeds to ensure the seller’s ownership.
Step 5: Waiting For Your Offer Acceptance
You’ll typically hear back on your offer within a day. Once accepted, your solicitor will request a draft contract, and your mortgage lender will conduct a valuation and survey. You’ll need to choose a survey level, ranging from a basic condition report to a comprehensive building survey.
Step 6: Finalising & Contracts
The legal process, handled by your solicitor, can take at least eight weeks. During this time, your solicitor will finalize the contract and conduct property checks to ensure everything is in order.
Get in Touch for more information on Buying a Property
Nikki Homes are happy to help and advise you every step of the way when buying a property, as it’s one the most stressful experiences in life. We want to make it as stress-free as possible.
