Whether you’re a first time buyer or looking to move on the property ladder, there’s a lot to think about throughout the whole process of buying a house and it may seem daunting. It should be an exciting time though, so to help you out, we’ve identified the 5 main steps (with a little more info) so you can go into it knowing as much as you can. Hopefully this will make the whole process of buying a house a smooth one for you!
(If you’re a first time buyer you might also find our first time buyers guide a useful read.)
Step 1 – Finding a house YOU want to buy
So, you’ve decided you want to move? The first step in the process to buying a house is to find the house of your dreams. However, you do have some things to think about before you start your search, the first of these being to work out your budget.
This is the foundation of the process and will pretty much affect everything going forward. Make sure you’ve accounted for everything, for example:
- Mortgage repayments and fees
- Moving costs
- Renovation or decoration costs
- Conveyancer fees
- Survey costs
- Stamp Duty Land tax etc.
You’ll then need to use these to help work out your budget for buying a house, keeping in mind what would happens if your circumstances change.
What deposit will you need?
Deposits traditionally had to be 20% of the property value, but in more recent years you could get a mortgage with only a 5% or 10% deposit (subject to affordability). Due to the increased lending risks as a result of coronavirus however, mortgage lenders might not be able to offer you a mortgage if your deposit is less than 20%.
Deposits can be from your own savings, with or without government Help to Buy schemes, or they can be gifted. If you’re looking to buy a house, but are struggling to get the deposit value you need to start the process, you can read our top tips here to help you save up for your deposit goal.
Mortgage fees and repayments
For your initial research, you can use free tools on websites to help calculate roughly what your mortgage repayments would be. These are great tools to point you in the right direction when you’re thinking about buying a house, but often they aren’t too accurate as they don’t factor in all of the costs.
The best way to find out how much you can afford to borrow is by getting an agreement in principle (sometimes known as AIP, mortgage in principle or decision in principle) from a lender. This is a statement from a lender setting out how much they are willing to lend you. These searches are usually only soft searches and in most cases they won’t leave a negative footprint on your credit history/ score if you are declined.
However, doing too many searches could have an impact on it. It’s also important to note that your agreement in principle is still subject to affordability and cannot be finalised until your actual mortgage application is submitted and approved.
Although you can apply for a mortgage directly through the lender, you can also use an independent Mortgage Adviser. They will go through some basic questions to assess what mortgages and rates might be available for you. When applying for a mortgage, it is always a good idea to seek independent advice and you should look for an FCA registered mortgage broker or financial adviser to lead you through the process.
You can get quotes for conveyancers before you’ve decided on which house you’re buying, so do this initially to get a rough idea of how much it will cost you. Try to make sure the information used for the quote is accurate as possible, as small changes could increase the cost. For example, there are usually additional fees when gifted deposits are used, if the property is a leasehold or if you’re looking to buy a new build etc. Visit our quote page if you would like to receive an all-inclusive quote for us to act on your behalf.
There are always other costs to think about in the process of buying a house. Even when you think you’ve thought of everything, something usually crops up! Try to think of as much as you can up front so there are no shocks along the way. Will you have to pay Stamp Duty Land Tax? Are there any leasehold fees? Will you need to renovate the property or will you want to redecorate? Read more on the cost of buying a house here to make sure you account for everything.
Finding a house to buy
There are so many ways in which you can look for your new house. You could use nationwide portals that market properties. These sites include houses which aren’t listed through them, but host properties from many other estate agents (usually as part of the seller’s package).
These sites are an easy way to see the wide variety of properties on the market, although it won’t necessarily show them all. Some local estate agents will exclusively advertise on their own site, so remember to browse the local sites too to make sure you’re viewing all of your options.
Make an offer on the house you want to buy
Once you’ve decided on the house you want in your price range, you’ll then have to make an offer. This is where the process of buying a house gets a bit more intense and really begins. The way you make an offer will be done differently depending on the estate agent. Sometimes the offer goes through them, whereas other estate agents remove the middleman so you deal with the sellers directly (usually through a portal).
Depending on the market and the seller, this could be as straightforward as making an offer and it being accepted. However, there could be a bit more back and forth, for example if the price isn’t right or if there is a lot of interest in the house. As part of your research, include looking into the property market in your area of interest. If it’s a competitive market you may be expected to make an offer quickly and closer to the asking price (no ‘cheeky’ or low offers), but always make sure to do what’s right for you and remember your budget.
Step 2 – Find a conveyancer for your house purchase
After you’ve made an offer, the next part of the buying a house process is to instruct a conveyancer. Your conveyancer will look after everything for you. They will start by looking at the contract and ironing out the detail and will finish with transferring funds and register the purchase with the Land Registry, so make sure you use a conveyancer that’s right for your needs.
Hopefully you will have looked at quotes previously, so you can now just instruct the conveyancer you want to use. Remember, now that you know which house you are buying, check all the details you provided for your initial quote are still correct. You may need to get a new quote or speak to your Quote Adviser if there are any changes.
Find a conveyancer and company that suits your purchasing needs
There are some traditional firms, usually local to your area, where you will have to go into the office to send and sign documents (such as ID verification). However, there are also conveyancing companies with online portals as well, such as the eWay portal which My Home Move Conveyancing clients benefit from. Online portals can give you more transparency and visibility, while giving the ability to receive, sign and send documents online. This removes potential postal delays and means you are able to complete forms at a time suitable to you, instead of working around your conveyancer’s office hours. Using an online conveyancer doesn’t necessarily mean you won’t receive a personal approach – at My Home Move Conveyancing you still get allocated a dedicated conveyancer who will look after you and your case, from beginning all the way through to the end.
For more information on comparing conveyancers, you can read our helpful guide.
Can the same conveyancer help with buying and selling?
When buying and selling a property at the same time, people often want to know if both parties can use the same conveyancer, in the hopes of saving both sides some time and money by reducing the number of parties involved.
In most cases it is possible to use the same conveyancer, providing you meet their specific criteria. This is designed to protect both parties from any potential risks associated with using the same lawyer.
If this is something you’re looking for, you can find more information in our guide here.
Trust recommendations and look at reviews
You can get quotes to compare prices but bear in mind that the cheapest doesn’t mean best. See if you can get recommendations from friends and family, on top of your own research, and read online reviews and check the pros and cons of each conveyancing firm.
Step 3 – Finalising your mortgage offer
By this point you would’ve already received your agreement in principle (although watch out for the expiry date as it’s usually only valid for a certain amount of time). The next step in the process of buying your house is to complete a full mortgage application. You can do this directly through your lender, or through your Mortgage Adviser who will look to try and get you the best deal/rate possible.
You will now have to decide on the details of your mortgage, for example:
- How many years you want to repay it over
- Whether you go for a fixed or variable rate mortgage
Your mortgage adviser or lender will ask for a lot more information and will go through your application in detail. It can be a lengthy process and involves sending lots of documents to them such as proof of ID, payslips, bank statements etc.
For more information read the mortgage process explained.
What are surveys and will you need them when buying a house?
Your lender will complete a valuation of the property (sometimes known as a valuation survey) to determine how much they consider it to be worth and, in turn, how much they will lend you for the specific property. This is another example of where potential complications in the house buying process can arise. Sometimes a lender will value the property less than you are willing to pay and have offered. In this scenario you would either need to make up the gap yourself, with other savings, or renegotiate a price with the seller.
As part of this process, you will also sometimes be advised to carry out a structural survey on the property, which you will have to arrange yourself. This is to unearth any minor or major issues with the property which will require looking at now or in the future. You can usually get different levels of surveys, with some more detailed than others. When buying an older house, it’s generally advised that you get the most detailed survey as there are often more structural complications. Once you get your survey back, you should make sure you read and understand the report. Again, if a problem is uncovered in the survey (such as roof damage or damp), you could ask the seller to fix the issue, or you may want to renegotiate the price if you still want to proceed with buying the house.
For more information on surveys read our helpful guide for what to expect.
Step 4 – Completing the forms and exchanging contracts
Now that you’ve instructed your conveyancer, they can begin to start the legal process for buying your house. This commences with them reading through the seller’s contract, ironing out any issues and agreeing to the terms. Your conveyancer will ensure that the purchase of the property is fully legal and will send you all the forms you need to read and complete, so that it can eventually be transferred into your name.
What searches will you need
The required searches may depend on location of the property you are buying and if your mortgage provider requires anything specific. But there are three main searches in this process:
- Local authority search
- Environmental search
- Water and drainage search
Your conveyancer will confirm which searches need to be carried out for your purchase. The searches need to be completed before you can exchange contracts. For more information on conveyancing searches and which ones are necessary, read our helpful guide.
Setting a completion date for your house purchase
When you’re nearing the end of your purchase, you will be asked to agree on a completion date. Although there are still some tasks to complete after this date, this is one of the last steps in the process of buying a house. The completion date is the date in which the property is transferred into your name and you become the legal owner – you’ll usually move in on this day too.
If you’re involved in a chain, you will have to agree a date between you, as you all have to complete on the same day. This can sometimes cause frustrations amongst the chain as it can be hard to agree a date with more people and properties in the chain. Usually people tend to opt to complete on a Friday, but you can move any day of the week as long it’s agreed with the buyers and sellers and the conveyancers are open so they can transfer funds.
This is where you sign (exchange) the contracts. Although at this part of the process the house is not legally yours, neither you nor the seller will be able to pull out of the transaction without a significant cost as a consequence. You will usually exchange 1-2 weeks before the agreed completion date, but this is just a guide.
When you exchange, you provide a contractual deposit which is usually 10% of the property value. This is different to the mortgage deposit, but the value that is transferred here is then deducted from your final balance.). This means you just need to transfer the remaining amount for the mortgage deposit, SDLT and conveyancing fees in time for the completion day. You usually pay this through a CHAPs payment, which your bank will charge you a small amount to do. Also, make sure to allow enough days for the money to be transferred, so it is ready ahead of the agreed completion date.
Step 5 – Completing your house purchase & final steps
This is the last part in the process of buying a house. You can probably see the finish line right in front of you! There are only a couple of things your conveyancer will need to do after you’ve signed and exchanged your contracts, and these steps are to legally transfer the property into your name.
What happens on the completion date?
The date for completing will have already been agreed when you signed and exchanged the contract. You are contractually obliged to complete on the day stipulated and you usually cannot change this day. If you are buying and selling, then you will need to ensure you move out on this day. Of course, you don’t have to move into the house you’re buying immediately, maybe you want to renovate, but you will own and be responsible for, the house from this day.
If you’re purchasing the house using a mortgage – just before the completion date (usually a few days before) your conveyancer will contact your lender to arrange getting your money released. Your conveyancer will arrange the transferring of this money on your completion day, along with the remainder of your mortgage deposit (remember you would’ve already paid some in the previous step for the house deposit). Your conveyancer will have already confirmed the balance, but you will need to ensure you have the funds ready. This then enables your conveyancer to be finalise the completion of the purchase, which means you now legally own the property.
If you have Stamp Duty Land Tax to pay, you will have already paid this to your Conveyancer and they will, within the 14 day deadline set by HM Revenue and Customs, ensure this is paid and the correct forms submitted.
The final steps for buying a house
You now legally own the property and will be contributing towards the repayments and bills. The final step to complete is updating the data held by the land registry, which your conveyancer will sort out for you.
After completion, you will also need to arrange for your bills such as council tax, insurance, gas and electricity etc. as the house is now owned by you. For a checklist of everything else involved with moving in and what to do, you can read our helpful moving guide.