How to buy a home
Whether you’re moving out for the first time, upsizing for a new family member, or relocating to start a new adventure, buying a property can be a really exciting time. Unfortunately though it can come with its own special type of stress as well…so we’re here to help you feel more prepared for the journey. This guide explains the ins and outs of the buying process so you’ve got more of an idea of what to expect.
Apart from the home, what else would I need to pay for?
Before you even start viewing properties, it’s a good idea to understand how much the ‘other stuff’ is going to cost you, as this might affect your overall budget to move.
- Stamp Duty/Land & Buildings Transaction Tax
As with many things in life, there is a tax associated with buying a property. This is usually paid on the day of the completion, with the amount depending on things such as whether this is your first home, the price of the property and any government incentives. For more details click here if you’re buying in England or Wales, and here if you’re buying in Scotland.
- Mortgage fees
If you’re getting a mortgage to pay for your new home, these are the fees you’ll pay to the mortgage provider. They include arrangement fees, booking fees, valuation fees, telegraphic transfer fee, mortgage account fee, higher lending charge and broker fees (if you choose to use one).
- Legal fees
You’re almost definitely going to need need a solicitor or conveyancer when you buy your new home. It’s worth taking a bit of time to find the right company for you, as there are quite a range, with some even completely online. As you’d expect their fees can vary too. You might also have to pay an additional fee on top of your solicitor costs for local and land registry searches.
- Removal costs
These can vary quite a lot depending on just how much you want to do yourself. If you don’t have much to move and have a few willing friends, then it could cost as little as hiring a van and a few cups of tea for their help! However, for the bigger moves, a removal company can help take one more thing off your plate on the day. You can just get them to do the actual moving and pack everything yourself, or some companies offer a full packing service too, depending on your needs.
- Buildings insurance
Some mortgage providers might want you to have buildings insurance in place before you exchange contracts on the property, so it's best to check with your lender.
What about the deposit?
We’d always suggest you have a chat to either a financial adviser or mortgage adviser when deciding how much to save for a deposit. In a lot of cases, if it’s possible for you to have a larger deposit, your mortgage repayments should be lower, with a better interest rate, and you’ll have paid off more of the property up front. An adviser will be able to advise what’s right for you. So, how can you maximise your deposit?
- Saving for a deposit
This can feel hard as a first-time buyer when you might have a lot of other living costs too, but if you can set aside some money each month towards the deposit, this can really help you on your way. One thing to bear in mind if you’re at this stage is to keep an eye on the property market – if you have a goal amount and you’re not quite there, but house prices are starting to creep up, you might want to consider whether it's time to take the plunge and go ahead with the smaller deposit. Otherwise you could end up paying more for your home than you might have needed to. This is something to discuss with your mortgage advisor.
- Money from your current property
If you’re already on the ladder and are taking the next step up, any balance outstanding at the date of sale after payment of all costs, fees and any applicable capital gains tax could count towards the deposit on your next home. Make sure you speak to your mortgage advisor about this when planning the loan for your next home.
- Money from another property
If you’ve got another property that you’re planning to keep as well as buy your next one, you may be able to re-mortgage that property to pay towards the deposit on the one you wish to buy. Once again, this is definitely one to discuss with your mortgage advisor before making any plans.
Where should I buy?
It’s not always all about the property, as Kirsty and Phil would say, Location, Location, Location…! Have a good think about where you’d like to live, what’s around locally, and how important these things are to you compared to the house itself.
- Transport links
If you need to commute to work, make regular long journeys on the motorway, or need good travel links for whatever reason, make sure you check these out.
Could you pop to the shop on foot, or will you have to get in the car – and how convenient/inconvenient would this be?
If you’ve already got kids, or they’re just part of the future plan, the schools (and possibly nurseries) in the area are another thing to consider. It could be a new school is even what’s driving your move – if so, be sure your new property is definitely in the catchment area for the one you like.
- Leisure spaces and venues
Do you enjoy popping out for a pint of an evening, or does a pub around the corner sound a bit too loud…this could influence whether living around the corner from the local is a good idea or not – as could the type of local it is! Similarly, if you love your fitness a gym nearby might be top of the list, or maybe you want some green space on your doorstep instead.
- Healthcare services
While you’ll always be allocated to a GP when you move to a new area, it might be a good idea to check out the local surgeries so you know what to expect. If you’re needing to make regular trips to hospital or specialists for more specific care, the location of these could be something to bear in mind too.
- Any local planned construction works or flood risks
You can check out the local Council’s website or local newspapers etc. for details of any large building projects on the (sometimes literal) horizon. It’s also a good idea to check if there are any local flood risks
If you’re moving to a new area but want to get a feel for it first, if you’re able to rent there for a short term before buying, this can be a great way to see if it works for you.
You’ve got the where, now for the what…
So you’ve picked where you want to live and found a house that gets the butterflies in your tummy going…now comes the head over heart part! Make sure you keep an eye out for these things:
A beautiful home won’t be very beautiful for long if the structure isn’t up to scratch. Keep a look out for any signs of structural movement, like large cracks in the walls. You’re most likely to see issues where extensions join the main property, end of terrace walls and bay windows, but you can get structural issues in other areas of the property too. It’s also a good idea to see if the roof and chimneys are in good condition, and if many other houses in the road have had their roofs replaced. If you have any concerns but do decide to go ahead, getting a survey could be a sensible option.
There’s cosy and there’s just too small, so make sure the rooms are big enough for you – and if you’re planning on staying put for a while, will they be big enough for future plans too? It’s a great idea to bring a tape measure along to a viewing so you can double check your furniture will fit – especially if the property is empty when you view, as it can be hard to visualise the true size of a space without any furniture in it.
- Property position
If you love the sun, a north facing garden could be your worst enemy, so check which way the property’s facing when you visit, or by a quick check on Google maps satellite view.
- Sound proofing
While it’s nice to say hi to the neighbours no one wants to know them too well, so try and note what’s easily heard from next door (or above/below if in a flat) during your viewing. Similarly if you’re thinking of taking up the drums, or just like loud parties, you might want to know you won’t inadvertently disturb anyone either.
If you enter a property and it has a mouldy smell, flaking plaster or water marked walls then this could be a sign of damp. You can ask about any damp treatment that has been carried out.
No one wants to have all their dirty laundry literally on display, so make sure the new place has enough storage for your needs. If you’ve got outside space too, is there a shed, or room to put one up, if you need it?
If you can try to go for at least two viewings on a property – it’s easy to get excited on the first viewing, so your second one should be more practical. Going back on a different day and/or at a different time is also a good idea as both the house and neighbourhood could feel quite different.
How to get an offer accepted in England and Wales
So the house ticks the boxes, the neighbourhood’s perfect, and you’ve got your finances in place – what happens next?
- What should you offer
Whilst the seller will have set an asking price based on things such as similar house sales in the area, market conditions, and condition of the property, you can of course make an offer on this. Consider both your and their position, as well as how much interest the house has had, when thinking about the price you go in with.
- Begin negotiations
Once you’ve decided what you’re going to offer you can start negotiations with the estate agent, or person selling the property if they’re not using an agent.
You might want to start with an offer lower than the price you aim to pay as this gives you some wiggle room if you need to bargain later on. You might even get lucky and pay less than you expected if this lower offer’s accepted.
- Take advantage of your situation
If you’re a first-time buyer, a cash buyer (chain free), or have a mortgage in principle, this could help your position. The seller may be looking for a quick sale, in which case your ability to move faster might be on your side.
- Bidding against others
An estate agent has to inform you of any other offers made on the property, but not how much. It’s highly unlikely a reputable agent would make up other offers as this is part of the Property Ombudsman’s Code of Practice. Some estate agents will operate a sealed bids process, so ask about the date by which you must make a bid and how many bids you can make.
However, if you have agreed a price for a property and after this the agent contacts you to say another offer has been received, you can ask for written proof of this from the agent. This will usually come in the form of a signed letter from the other buyers’ solicitor.
- Walk away
If other offers or bids get too high, don’t be afraid to walk away. It can be easy to get caught up in the emotions of buying your new home, but you don’t want to over commit yourself financially. Don’t forget to allow for the cost of any repair or renovation works.
What happens when your offer has been accepted
Once your offer has been accepted, you’re not quite there just yet – now you’ll need to start the buying process for your new home.
- Engage legal services
You’ll need to hire a solicitor or a conveyancer to manage the purchase for you and commission surveys and searches on your behalf. They can also help with a mortgage specialist to arrange the mortgage if you need one or don’t already have your own. You can ask your solicitors or conveyancers if they provide insurance for the fees in case the sale doesn’t go ahead.
- Open communications with the seller
This can take a while, and there’s often other things to work through, such as fixing items that come up on a survey and potential purchase of fixtures and fittings. The good news is your solicitor can manage this all for you, so make sure they’re involved in all discussions so any decisions and agreements can be recorded.
- Get ready for the move
While there’s already a lot to think about at this time, you also need to remember to arrange a removal company and to contact the gas, electricity, and other suppliers at your new home when you’ve got a date to exchange contracts. Don’t forget you’ll need to arrange property insurance to take effect from the date the property becomes yours.
How to get an offer accepted in Scotland
Buying a property in Scotland and making an offer is quite a different process compared to in England and Wales. Some homes are sold at a “Fixed price", which usually means that a seller wants a quick sale and is willing to accept the first offer matching their price. Most however use a blind bidding system where the seller specifies the minimum price and, if you’re interested in the property, your offer is submitted by your solicitor as a sealed bid. Here's more info on how it all works.
- Home Report
If you find a home that seems to tick all the boxes, the first step is to ask the estate agent, the seller, or their solicitor for the Home Report. This gives details on the property and is split into three sections: a single survey and valuation, a property questionnaire and an energy report. This must be given to you within nine days of your request. There are some properties that don’t need a home report – you can review these here
- Find a Solicitor
Unlike in England and Wales where you generally appoint a solicitor after an offer has been made and expected, in Scotland if you find a property that you would like to purchase and you are happy with the Home Report, you’ll need to appoint a solicitor before you make a formal offer.
- Making an offer
To make the offer your solicitor will firstly formally note your interest with the seller. If a number of people note their interest a closing date will be set by the seller for offers to be made, giving the interested parties time to arrange the finances to purchase the property.
If no closing date is set this could indicate that you are the only bidder, instead of making an offer it might be possible to negotiate the price with the seller.
If you decide to make an offer, it should include:
- A brief description of the home
- The date you would like the keys for moving in
- The price you are willing to pay
- Any items that you would like to buy from the seller
- Any other conditions you have
The offer must be sent as a letter from your solicitor allowing the seller to consider it. If your offer is the one that is accepted you will receive a letter from the seller's solicitor called a “Qualified Acceptance” meaning they accept your offer dependant on certain conditions. Yours and the seller's solicitors will then send each other letters negotiating the conditions, these letters are called missives. Once both parties are agreed on the terms you have a binding contract, and if you try to go back on the deal after this, you’ll be liable for damages to the seller. It’s therefore important to be sure this really is the property for you before you start the missives process.
After the missives your solicitor begins the process of conveyancing, going through the legal process of transferring ownership of the property from the seller to you.
What happens on completion/settlement day
You’ve now reached Completion day, or Settlement in Scotland – congratulations! This is the day you can move into your new home, and is the final step of the process.
- Legally own your new home
On this day, ownership is legally transferred to you from the seller. You’ll get the keys to the property and the seller must vacate if they haven’t done so already, and you’re free to move into your new home.
If you’re doing any renovations before actually moving in, this is the day when the workmen are allowed in.
This is also the day to take the meter readings as the responsibility for the utilities has now passed to you.
- Begin moving in
When you start moving your belongings into your new home you may want to add contents insurance to your policy if you haven’t arranged it already. Once you’re in make sure you re-evaluate your contents insurance after a few months, you’ll want to ensure any new items you’ll be buying are covered in your new home. Make sure you inform your insurer in advance if the property will be empty for a period as this may affect your insurance.
We hope this guide has given you all you need to know about buying a home. Now you just need to find the right one…when you do, why not take a look at our Home Insurance?