Home buyers looking at their new house (Source: Wylie and Washburn)
In our blog from earlier this week, we answered some of the internet’s most common questions about the mortgage process when buying a property. A lot of new home buyers have questions around the process outside of mortgages too. So we thought it would be useful to answer some of the most common home buying questions in another blog. Lets get started!
What’s the first step in the home buying process?
Getting your mortgage approved in principle! Ok, so we will try to answer questions on the elements of home buying aside from mortgages but this really is the best place to start. Speaking to a mortgage advisor and getting a mortgage in principle (affordability and credit check) carried out before setting your heart on a property is definitely the best thing to do. A mortgage in principle will check how much mortgage you are eligible for and check your credit to make sure that you won’t get rejected for a mortgage later down the line. Once you know both of these things, you can get an idea of what value property will be in your budget.
How Long Does it Take To Buy a Home?
Well the simple answer is….there isn’t a set answer. The home buying process and the length of time it takes to buy a home depends on a lot of factors. It could take a few weeks, it could take a few months, or in extreme circumstances a few years. If everything goes smoothly, it could take around 3 months to go from offer accepted to actually moving into the new property. That is, if your mortgage application goes through quickly, your solicitor paperwork is all completed quickly, your deposit is available immediately, and the person selling you the property has sorted everything out on their end in a timely manner.
Some of the things that could hold up a house purchase are:
- Delays with your mortgage application
- Delays with your legal paperwork
- If the person selling the property has a long chain ahead of them i.e. if they are buying another property and they are delayed
Do I need to buy through an estate agent?
The majority of home sales are carried out through an estate agent (or a realtor/real estate agent in other areas of the globe) and they are a really important part of the process. An estate agent markets and manages the sale of a property, often elevating the stress of trying to sell your property on your own. They arrange for viewings of the property and act as an intermediary between the buyer and seller.
However, not all people decide to sell through an estate agent. Some people sell the property independently. There can be a lot of reasons why people do this, perhaps to avoid any fees associated with an estate agent or perhaps just so that they can retain more control of how the property is sold. Either way, it won’t really matter too much who you buy the property through. Although if you do by the property independently, you will be dealing directly with the seller.
Do I need a solicitor when buying a property?
Yes, definitely. Instructing a solicitor to act on your behalf when buying a property is an essential part of the home buying process. A solicitor is a legal professional who acts on your behalf to ensure that everything being done and transacted is carried out legally. They will check documents, deeds, titles, deposit, mortgage amounts, completions, tax, pretty much anything you can think of associated with legally owning a property.
The person selling you the property will also need to have an appointed solicitor and yours solicitors will liaise with each other to resolve any issues and ensure that the purchase goes through smoothly. Without legal representation you will not be able to get a mortgage and will not be able to go through all the necessary legal paperwork and processes that go along with buying a home.
What fees do I need to consider?
Other than the mortgage and deposit, you will most likely have several other fees to consider.
- Stamp duty: Stamp duty is a tax by the government on new home purchases. For all home movers who will only own one property at one time, you will pay a percentage of the value of the new property as a tax (between 2, 5, and 10% up to £1 million). For first time buyers, you will not be taxed at all on purchases below £300,000. You can calculate how much stamp duty you will need to pay, by using our stamp duty calculator here.
- Solicitor fees: Most solicitors that you instruct yourself to carry out the legal work of your buying process will charge a fee. Each solicitor varies with their fees and you will need to get a quote from them before you make a decision to instruct. But, on average you could property look at fees of anywhere between £1,000 and £3,000. Some mortgage products offer free legals as part of their package, so if you select a mortgage product with your advisor that offers free legals, you may not have to pay any fees.
- Valuation fee: Your mortgage lender, as part of the application process, will need an independent valuation of the property carried out so that they can make sure that the property is worth what you are paying for it and that there aren’t any issues with the property that could impact them negatively. A lot of the time, valuation fees can be added to the loan but equally, a lot of valuation fees will need to be paid separately by you. Again, these vary but are usually £100-200.
- Reservation fee: If you are buying a new build property, you will normally need to pay a reservation fee to the builder which will officially enable them to take the property off the market for you. Dependent on the builder, the area of the country, and the type of property, the reservation could cost between £100 and £1,000. Sometimes this is refunded by the developer once you have completed your purchase, but not always.
- Moving costs: You may want to do all the heavy lifting and moving yourself however, if you do decide that you would like some professional moving help, you may want to hire a removals company. These companies will move your furniture and boxes out of your old property and into your new one for you. These costs really do vary greatly so it is not possible to give an idea of how much they will charge however you can find some companies for quotes here.
When can I move in?
Normally, you can move into the property when the sale has officially completed. Your solicitor will arrange a completion date with the seller’s solicitors where all mortgage funds, deposit and any other fees have been paid. All legal paperwork will need to be completed on both sides and the seller will need to have cleared and vacated the property. This completion date can be delayed and pushed back by either side if something has not been completed on time.
Once completion has occurred, you should be able to move it to your new property without any trouble. Sometimes, if pre-arranged with the seller, you may be able to unofficially move in earlier however, this is entirely up to the seller.
What details do I need to change when I move?
When anyone moves home, not just when they buy a new home but when you move to a rental property too, you will need to make sure that you update your address where needed. Some of the most common places people forget to update their address are:
- Your bank
- Your driving licence
- Your phone bill
- Your electoral register
- Your car insurance
- Your car registration
- Any other insurances
- Your TV licence
- Your utilities bills
- Your council tax
If you forget to change any of these, there could be negative repercussions. For example, if you get a parking or speeding fine and your car is not registered to your new address or your driving licence is still at your old address, your fine will more than likely go to your old address. If you don’t pay your fine, the severity of the fine could increase. This is the same with utility bills. If you are still listed as living at your old address, you could be charged incorrectly.
We hope that this has answered some of your questions around the home buying process. If you have any other questions, please give our team a call and we will be more than happy to help.
