Buying a house is a lengthy process and may come as somewhat of a shock to the system, especially if you’re a first-time buyer. We live in a world where one-day deliveries are the norm, so having to wait between six weeks to three months to get the keys for your new home might seem unnecessarily long.
However, the home buying process is complex (and costly) with many layers. You need to find somewhere you like, get an offer accepted, arrange a mortgage, hire a solicitor and fill out plenty of paperwork. There’s a lot to unpack – and that’s before the actual unpacking begins once you’ve moved.
However, having an understanding of what the home-buying process involves will help you be more prepared for the steps along the way. As a result, the lengthy process will seem more straightforward, and the entire experience becomes easier.
Guide to buying a house
We’ve created this guide to buying a house so that you can feel more confident about understanding the home buying process; the various stages; the costs involved; as well as the timeline of how long it might take to buy a home.
In this article, we’ll cover each stage of buying a house, which includes:
- Step 1: Finding a home
- Step 2: Making an offer
- Step 3: Instructing a solicitor or conveyancer
- Step 4: Conducting a property survey
- Step 5: Exchange of contracts
- Step 6: Particulars for moving in
- Step 7: Completion
Step 1: Finding a home
The house-hunting process starts before any negotiations have taken place or paperwork has been filled in. At this stage, it’s important to work out what you can afford, how much deposit you have and the amount you can borrow if you’re taking out a mortgage. The costs of buying a house can quickly mount up!
The minimum deposit for a mortgage is usually 5%. However, a deposit of 15% will make the process of borrowing funds much easier. There are also help to buy ISAs for first-time homebuyers, as well as some 0% deposit offers – though the latter is rare.
It is best to arrange a mortgage as soon as possible and get a DIP (decision in principle), which tells you how much money a lender is likely to offer. This will give you a clearer idea of what you can afford and the type of property you can buy.
Your credit is another factor that should be taken into consideration early on in the process. Check your credit report to see the score and whether there are any errors that need fixing. Lenders will always perform a credit check before offering a mortgage, and you want to make sure everything is in order before applying for finance.
Searching for a home
As for finding your new home, the majority of buyers start their search on property portals like Rightmove and Zoopla. Portals display all of the latest properties on the market in one convenient place so that you can search in your desired area and see all the homes available.
It’s also possible to go to the estate agents’ websites directly. However, doing this will only show the stock they have rather than everything available in your chosen postcode. More than six in 10 buyers find their home on a portal.
After identifying properties that interest you, it’s time to go on viewings. Arranging a viewing will be through the estate agent advertising the property or with the seller (also known as a vendor) directly. The latter is more common with online estate agents.
There’s no limit to how many viewings you go on, as it’s entirely down to how long it takes to find somewhere that you think could be your next home. That’s why it’s important to ask plenty of questions during the viewing, such as who are the neighbours, what is included in the sale and how long have the current owners lived there.
Home purchases tend to be long-term investments, so you want to make sure you’re making the right choice.
Step 2: Making an offer
Once you’ve found somewhere that you’d like to buy, the next stage involves making an offer. The offer process typically happens through the estate agent – though, again, it can be with the seller directly if you’re using an online agent.
As the buyer, you won’t pay any fees – whether you’re using an online or estate agent. The seller covers the agent fees, meaning you only pay for the home you’re buying.
When it comes to purchasing a house, it’s common practice to offer less than the asking price. However, you shouldn’t go too low as the seller might not think you’re serious about buying their home.
It’s a good idea to research sale prices for similar properties in the same neighbourhood. Doing so will give you a clearer indication of the amount you should offer. There may also be a scenario where you need to offer more than the asking price, especially if there is plenty of interest in the property.
There is no one-size-fits-all approach for offering on a property, with the results coming down to your desire to buy and the vendors’ need to sell.
Step 3: Instructing a solicitor or conveyancer
The most lengthy part of the home-buying process, conveyancing is the legal action undertaken by a solicitor or conveyancer. A conveyancer might not be a qualified legal professional, but they will specialise in property transactions. If you opt for a solicitor, be sure to check that they have experience in property law.
A conveyancer or solicitor will:
- Conduct searches on the property, such as checking with the local council to see if any planning issues might impact the home’s value.
- Liaise with the vendor’s conveyancer, your mortgage lender and estate agent
- Check all documents provided by the seller, such as leases if you’re buying a leasehold or freehold details
- Draft and check contracts for exchange
- Pay any stamp duty owed
- Transfer money to the seller for completion
A solicitor or conveyancer costs between £500 and £1,500, depending on the cost of the property and the difficulty of the transaction. You will also have to pay for the searches they conduct, such as local council checks. These cost in the region of £250-300.
Step 4: Conduct a property survey
While the solicitor or conveyancer are doing their searches, it’s worth conducting a property survey. Surveys are optional, but they can highlight any potential building or structural problems that might not be detectable during a viewing.
Doing a survey will make you aware of any potential issues, at which point you can decide whether or not to renegotiate the offer or budget for any minor work that needs undertaking. You can also ask the seller to fix any problems before the transaction completes. A surveyor will conduct a property survey, and they charge between £200 and £1,000 depending on the type of surveyor you want.
Step 5: Exchange contracts
The exchanging of contracts means the finishing line is in sight – the point where you’re ready to set a date for moving and officially buy your new home. Exchange happens when the buyer and seller’s legal representatives have conducted their checks and are happy with the results.
For the exchange to take place, the following must be completed:
- A written mortgage offer from your lender
- Thorough information about the property, such as fixtures and fittings forms from the seller
- Results of local council searches
- A designated completion date
Once your solicitor or conveyancer starts talking about completion dates, the home-buying process is almost over. The agreement to buy the property is now legally binding and the chance of last-minute hiccups – like gazumping – is incredibly unlikely.
Step 6: Particulars for moving in
Your new home is on the horizon, and you can start to imagine the first time you turn the key. But there are still a few particulars to sort out that coincide with completion.
Buildings insurance covers the structure of the building and is often required to be in place by mortgage lenders before they hand over the funds. The cost depends on the size and style of your property. It’s unlikely, however, that you will pay more than a couple of hundred pounds for 12 months’ worth of insurance.
Contents insurance isn’t mandatory for completion, but it’s something that you should think about while you’re moving in. It covers the contents of your home: elements like fixtures and fittings, plus furniture and other items that are kept around the house.
Hiring a removal van
Once you have gone through the lengthy home-buying process, it’s time to think about moving your stuff into your new home. Research van removal companies to see which deals are available for when you move in. Of course, you can hire a van and do it yourself. However, if you have a lot of furniture to move, it’s worth looking into hiring a removals company.
Step 7: Completion
Completion is the final step on your journey to buying a new home. It typically takes place around two weeks after contracts have been exchanged and involve the transfer of funds to the relevant parties.
- Vendor – your solicitor will transfer the funds for sale over to the solicitor of the property seller
- Stamp duty – your solicitor will oversee the Stamp Duty Land Tax payable on the property. There is an extra 3% due on second homes and buy-to-let properties
- Solicitor legal fees – this is the amount due to the solicitor for overseeing the transaction
The solicitor will then register the property with the land registry and, voila, it is officially in your name! You’ve just bought a new home.
All that’s left to do is collect the keys and start a new adventure.