How do I buy a house?!(19 Posts)
We are first time buyers and despite reading everything I can get my hands on, I'm still confused about what we have to do when we find the right property! I know we need a mortgages, solicitor etc but in what order? Arghh, why is it so complicated?!
Can someone, with infinite patience, explain it to me step by step?
Step one- find house you like
Step two - decide on an offer price
Step three- what do I do now?!
I don't know if it's the 'right' way to do it, but we always get a mortgage agreed first, then you know your budget so you can start looking. Factor in some money for solicitors, moving costs, stamp duty etc. Find a solicitor. Start looking in estate agents/online. Then your solicitor can answer lots of questions for you. I dunno. Don't overthink it, IMO you don't really need to know all the steps beforehand, as estate agents and solicitors will promt you and do stuff for you. But then, maybe we're irresponsible. Always works out for us though! Have fun!
Thanks for coming back to me.
We have a mortgage in principal as we wanted to know the price bracket to look in but haven't got a solicitor in mind.
Do you think I need one sorted before we offer?
When we offer, do you have to pay a deposit or anything there and then?
I'm sorry I'm being such a dope! Normally a reasonably bright person but this has got me all up in knots!
There's a really good book by Which? Called 'Buy, sell and move house' which DP and I relied on heavily as first time buyers. It's really good at explaining the steps.
Based on your post, I'd say decide your offer price, get a mortgage 'decision in principle' for at least the amount you want to borrow, then call the EA and put your offer in. Once accepted, full mortgage application and instructing solicitors both need doing at the same time.
We used a mortgage broker who basically held our hands through the entire process, even advising on a solicitor (they were brilliant). All my naïve questions were thoroughly answered and I'm certain we wouldn't have gotten our house without him!
In England/Wales you don't pay your deposit until exchange of contracts, and that is when you are committed to the sale.
Estate agents will recommend solicitors but not necessarily the best. Ditto mortgages. Word of mouth for solicitors I'd say.
Stamp duty ?
Moving costs (£800)
Mortgage fee (if you use a broker the broker gets paid by the mortgage company. Brokers will get you a better deal than nipping down to the high street and going in A Bank)
Survey £800 - get a full one if it's not a new house
Fixing all the broken things etc (even in a perfect house) £1k++++
Also if you get a broker they will work out as far as possible before actually applying if you will get the mortgage - so you won't apply to loads and have it on your credit reference.
Step 1 - make an appointment to see a mortgage adviser (Estate Agent's usually have one) to find out how much they will lend you.
Step 2 - Armed with this figure plus any savings you have, you can then make appointments to view properties in the appropriate price range.
Step 3 - When you find a property you lobve, you can make an offer. Typical offer might be 10% under asking price, but would depend on location and demand. First time buyer properties in my area sell quickly at over the asking price.
Step 4 - Once you find out if your offer has been accepted (or you've renegotiated the price), you will be expected to instruct a solicitor to act on your behalf for the purchase.
Step 5 - The Estate Agent sends a Memorandum of Sale to the seller's solicitor and your solicitor to get the ball rolling.
Step 6 - The seller's solicitor will send your solicitor a draft contract pack with initial information about the property.
Step 7 - You decide on the type of survey you want i.e. valuation, home buyer's or full structural and arrange for it to be done via the Estate Agent.
Step 8 - Hopefully you would have decided on a mortgage lender and they will make a formal mortgage offer to you and instruct your solicitor to act on their behalf as well.
Step 9 - You will need to decide on searches, which must be paid for in advance. If you are taking out a mortgage then some searches are obligatory, i.e. Local Authority, Environmental and Water/Drainage.
Step 10 - You have time now to let the solicitors do the legal bit. You can get quotes for removals (if you have any furniture, of course!). If you have a Help to Buy ISA, let the solicitor know so that they can set the ball rolling with getting the bonus paid (but be aware this cannot be used as part of the deposit). You will need to close the account and get a closing statement. If any funds are being gifted to you, then the person gifting will need to write a letter to the solicitor stating the gift is not a loan, and that they will have no rights over the property. Also make sure the solicitor has received your ID and is happy with it.
Step 11 - Assuming all enquiries and paperwork are satisfactory, your solicitor should send a report to you with information about the property, as well as instructions regarding paying stamp duty and the deposit. You may also receive the Contract and Transfer for your signature (and witnessed) which you will need to return.
Step 12 - Once the signed Contract and Transfer are in, deposit received and satisfactory responses to queries, the solicitor is ready to exchange contracts and set a completion date. Be aware though that if there is a chain above you, they all need to be ready too.
Step 13 - Exchange Contracts. This is legally binding. If you back out now, you will lose your deposit. Now you will need to insure the property and if you do have belongings to pack, now is the time to do it. You can advise people of your new address - including the utility companies, council (council tax), DVLC, Banks/Building Societies etc
Step 14 - Completion. Once monies are received by the buyer's solicitor, they will release the keys and you can go and collect them (usually from the Estate Agent) and move in.
Hope the above is helpful. Obviously not all house moves are smooth but generally this is what is supposed to happen!
I was exactly like you last year when we started looking, totally clueless but wanting to be taken seriously.
We did have a solicitor lined up prior to our offer, however shes awful so without a doubt, find someone local and who comes with recommendations. Have any of your friends bought recently that can suggest someone? If not speak to people, see how the firms respond when you say you are a first time buyer, do they speak in plain english? (Ours quoted latin at me) and that should have been enough of a warning!!
You dont pay the deposit at the offer.
If you ffind a house you like, I would stress your position, first time buyer (aka no chain) plus mortgage agreed in principle, the estate agents should check but it helped us negotiate a discount because the seller wanted a quick sale.
Once the offer is accepted, the estate agents will want proof of the mortgage/deposit to be sure your offer and position is genuine.
From then, you would organise a survey of the house, which you pay for. The mortgage company will also want to do a survey, you will likely have to pay for their survey BUT whilst they offer you a variety of options it is their surveyor and their report which means if they miss something you can't later make a claim against them, personally I'd find my own surveyor and have that as well as the cheap mortgage company one if the house is unknown to you. (were buying a neighbours house and my step Dad has done all the work on it so im pretty confident of the condition so we just had the mortgage survey)
Your mortgage company should then confirm they are willing to lend the money against that house (their survey ensures it is worth what you are paying to protect their investment)
If that comes back and you are happy to proceed you would then ask your solicitor to start searches. Typically takes 2- weeks
The seller would prepare a property information pack which has details about the house and send that to your solicitor. Your solicitor should review, you can also look at this and put forward any questions you might have.
Its then down to the seller to respond. Assuming you are still happy with the answers and wanting to proceed you would arrange a day to exchange. It's at this point it becomes incredibly difficult to back out without then having to pay all sorts of legal fees. I believe you will also need to pay a deposit at this point. A date is then set to complete, which is the day you sign contracts, get the keys and move in!
If the house is empty, like the one we are buying you can exchange and complete same day.
Hello!! It is indeed daunting. I bought my first house in 2015 and here is step by step what I did
Found out if i could get a mortgage by taking to the bank.
Got an agreement in principle so vendors would take m seriously and knew my budget
Looked at houses
Made an offer on my favourite house
Spoke to bank who firmed up amount of mortgage needed and told me about surveyors etc
Instructed a solicitor who took care of all the rest of it and just told me what to do
Completed sale and spent all my time and money decorating
Thanks so much to everyone for taking the time to reply! Really appreciate it.
Just got to find a house now!
I would say don't go to an in-house mortgage broker in an Estate Agent's. Use an independent whole of market broker instead. You don't want the EA to know how much you can afford as opposed to how much you want to offer and it's in their interest to get their clients (vendors) the highest possible offers.
When buying her first house, my dd did see the EA's in house mortgage broker - and then found exactly the same deal online for a much lower fee. The in-house bloke said he'd match it, so always worth trying.
In her case she used the in house solicitor as well, and although I wouldn't have thought this best before (unless you already know a good solicitor) I have to say it worked really well. Obv. it's in their interests to get a sale wrapped up quickly so they get their money. (Solicitors can be dreadful ditherers - speaking from experience here...)
Dd's purchase was all done and dusted in 6 weeks - I'd warned her to expect 3 months!
Update- found a house today that we love! Going to see it again on Monday and then will probably offer on it in the afternoon!!
Thank you all again for all your help. Good old MN!
Do not use the services of anyone recommended by the estate agent. Get your own solicitors, your own mortgage broker, your own surveyor, and certainly your own tradesmen when getting quotes. I've heard way too many stories of estate agents being in collusion to recommend otherwise.
If the EA asks for proof of deposit - direct them to your mortgage broker first, and if that's not good enough, then your solicitors. Do not let them know how much deposit you have - they will use it against you. Do you let them know the maximum mortgage approval you have. If they claim they need to know you can afford the offer, direct them to your mortgage broker (with an email stating the offer price, so the broker doesn't give the game away).
If the EA says another offer has come in, don't believe them.
Make all offers by email/letter, and get written/email to say they've been rejected.
My default position as a buyer is "don't trust estate agents" - they work to ensure the vendor is in the best position possible. But be very nice to them - keep it as friendly and informal as possible while sticking to the above.
I think people have covered the process pretty well, but I just wanted to also support using a mortgage broker. She didn't get us a better deal than we could have got ourselves (although she had a much better search system to look st what was available and also included costs of surveys etc, so really easy to see everything in one place) but honestly the whole mortgage process was SO EASY. Not for her I gather because there were some queries over my DHs salary (very confusing payslips...), but we literally just had one meeting with her and then emailed her scans of documentation and that was that.
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