Buying a house is a big milestone; huge in fact! My mum has always told me it’s one of the most stressful milestones in life. I’ve just googled ‘most stressful life milestones’ and yes, moving house makes top 5. No surprise then that you’re going to need some help along the way. Knowing where to start is often the hardest part. Hopefully this step by step guide should help you along the way.
Our Story
In 2019 my now husband, Matt, and I decided it was the right time to buy our first house together. Before 2019 there was never the right opportunity; I’d been a Uni student and moved away for my first job, whilst Matt was studying for his accounting qualifications. Finally, we were living and working in the same place, so we went for it! Neither of us had any experience with buying a house, which made the process feel even more daunting. I don’t think we ever realised we were about to embark on an almost year long journey! But we finally made it and we couldn’t be happier with our little home.
Before we get started..
This step by step guide will go through all the stages of buying a house. Before you get started make sure you’re ready to buy a house. Check out my guide on the things you should consider before you buy a house.
Overview
1. Sort Your Finances
Money is a big part of buying a house, after all it’s not cheap. You need to find out how much you can afford. It’s best to do this at the start of your house buying process; you don’t want to get your hopes up by looking at properties way out of your price range.
There are so many calculators online to help you figure out approximately what you can afford. Bare in mind this is a rough estimate, it’s important to get specific quotes from lenders. Lenders provide ‘how much you can borrow calculators’ on their websites. MoneySavingExpert have a really simple, easy to use calculator to get you started.
Mortgage advisors can help you throughout the buying process. Meeting with a mortgage advisor at the start will set you a property budget. Many estate agents will have mortgage advisors in house. Be wary, mortgage advisors can charge you for their service so it’s always worth asking about their fee. This can range anywhere from £300- 1% of the mortgage loan.
Check out my blog post for more information on mortgage advisors.
Two things will make up your property budget; mortgage loan and cash deposit. Often estate agents will ask if you have a mortgage in principle. This is a statement from a mortgage lender (i.e. bank) saying that they are willing to lend you a certain amount and is not the same as your mortgage! Either a mortgage advisor will arrange this on your behalf or you can directly seek this from a lender. Estate agents will ask you for this to determine how serious you are about buying a property.
*A mortgage in principle is not a guarantee you’ll be approved a mortgage as it’s a low level financial check and doesn’t have to be from the same lender you get your mortgage with*
2. Find Your Dream House
Start looking for your dream house! There are 2 places to start; your local estate agents or property websites. It’s a good idea to get to know your local estate agents; they might inform you about properties before they come onto the market. Make sure to tell them about your property wish list and your budget.
There’s a huge range of property websites available online:
Rightmove is one of the most popular property search websites. There’s a huge amount of properties listed. It plots listings on Google maps making it really easy to see properties for sale in your desired location.
Zoopla was my favourite search site. You are able to view previous sold prices and estimation of bills/mortgage.
As soon as you’ve found a property you’re interested in make sure to book a viewing. There’s no harm in viewing the house more than once if you’re seriously interested. Even ask family or friends to come on a second viewing, having other people’s perspectives can be really valuable. Make sure to check out my guide on 12 things to look out for when buying a house.
3. Make An Offer
A huge milestone in the buying process! You’ll be guided by the price the property is listed at, that isn’t the price you have to go in at. There are a few things which might influence your offer:
- Amount of interest in the property
- How much properties (similar in size, style, etc) in the nearby area have sold for or are listed at
- How much the property has previously sold for
- Results from your survey
- What’s included in the fixtures and fittings (always check what the vendors are taking with them/leaving for you)
Fingers crossed your offer is accepted!
4. Offer Accepted
Congrats! Mini Celebration! Although there is still a long way to go. Even though your offer has been accepted it does not mean you or the seller are legally bound to complete the purchase.
Be wary of two things:
Gazumping: someone makes a higher offer than you even though your offer has been accepted and your seller takes the higher offer. Unfortunately there’s little you can do to prevent this, the best thing to do is ask for the property to immediately come off the market
Gazanging: the seller decides to pull out of the sale. Again there is little you can do to prevent this, the best thing is to keep the time between the offer being accepted to exchanging contracts as short as possible.
After your offer has been accepted you should receive a memorandum of sale. This is written confirmation of the sale including important details, such as agreed sale price.
5. Find Lawyer/Conveyancer
Conveyancing is the legal transfer of a property between one owner to the next. You will need to instruct a property lawyer to do this work for you. Your estate agents may put in contact with a lawyer- otherwise you can research for one online. From personal experience the lawyer your estate agents recommend are more expensive, in fact our quote was double the price of an independent lawyer.
Your lawyer will be very busy in the background. They do all the legal paperwork, request Land Registry and local council searches (local authority, drainage and environmental), draft the contract and arrange the exchange of money. This can take a minimum of 6 weeks, the searches can take 6 weeks alone. As soon as you have your offer accepted instruct your lawyer to request the searches.
Conveyancing fees are one of the most expensive parts of buying a house. It can cost up to £1500. Your lawyer may ask you for an upfront payment so that they can request the searches on your behalf.
Check out my blog post on all the fees you’ll be expected to pay whilst buying a house.
6. Start Mortgage Application
You’ll already have your mortgage in principle. This is usually valid for 30 to 90 days. After your offer has been accepted you need to apply for a mortgage. You can do this through a mortgage advisor or you do the research yourself. MoneySuperMarket allows you to compare mortgage deals.
When researching mortgages watch out for interest rates, the lower the better. It will make a big difference to the overall amount you pay back (including interest). For example, paying 3% interest, instead of 4%, on a £150,000 mortgage (over 25 years) will save you £24,000.
Also watch out for arrangement/booking fees, in other words the lenders admin fees. Typically this is around £1000, although lenders can hide this in the interest you pay back. Some mortgage advisors may be able to do you a deal, meaning you don’t have to pay an arrangement/booking fee. An added benefit of using a mortgage advisor is better interest rates.
Once you’ve found a mortgage you’re happy with then you need to fill out an application. Which from memory is a very long document! If you have a mortgage advisor they will usually arrange a meeting to help you fill in the form. A mortgage illustration is drafted, which is an outline of the proposed mortgage and details of the loan. Once you’ve applied for the mortgage it can take anywhere from 2 weeks to over a month to receive an offer.
7. Decide If You Want To Do A Survey
Now it’s time to check the property you’re buying is in good condition. That is exactly what a survey takes care of!
It will be a requirement your mortgage lender carries out a valuation. This costs £200 and is a one off payment. A valuation is NOT the same as a survey!
A valuation is done in the mortgage lender’s interest, not yours! Your lender needs to check in case you can’t afford your repayments and they have to repossess the property, they can sell the property for AT LEAST the value of the mortgage. Sometimes the valuation is as little as a drive by; in other words they’re just checking the property exists. How much can you see from the car window?!
For reference our valuation didn’t pick up on structural problems in the loft or issues with the gas or electrics. If we hadn’t chosen to do a survey we would have lost thousands of pounds.
Unless you are knowingly buying a house in need of major work, then you can never be confident there won’t be issues with a property.
You apply for a survey at this stage in the house buying process once you’re more confident you’ll receive a mortgage offer. A survey is a detailed inspection of the property’s condition. It evaluates the structural integrity of the property, highlighting any major issues and also comments on the electrics/gas. There are different levels of survey:
Homebuyer’s Report: We were advised this is most suitable for properties less than 50 years old. It typically costs between £300-£400. You can pay a mortgage lender to carry out a Homebuyer’s Report in addition to the valuation.
Full Structural Survey: This is more suitable for much older properties or properties with obvious problems. This is more expensive as it comments on everything in the property and in more detail. This can be up to £1000.
8. Feedback From Your Solicitor and Mortgage Lender
Hopefully you hear back that your mortgage has been approved! Congratulations! Another big milestone in the house buying process.
You should receive copies of your mortgage conditions, read through these carefully. Also check all the details in your offer are accurate and if there are any errors make sure to highlight them. It’s a good time to fish out your mortgage illustration and compare it to your mortgage offer, make sure everything looks the same. Again any discrepancies make sure to highlight them either to your lender or mortgage advisor.
Hopefully all your searches are completed as well; your lawyer will notify you when they are. If they aren’t completed at this stage it might be worth ringing your solicitor to chase them.
9. Arrange Buildings Insurance
Buildings insurance covers your home from any structural damage encountered during a flood, storm, fire, subsidence or vandalism.
It might seem strange to have to arrange this before you own the property but it can be a requirement of your mortgage offer. Plus it’s always better to be safe than sorry, as soon as you exchange contracts you are legally obliged to complete the sale.
10. Arrange Completion Date
Your completion date is the day you finally get the keys to your new house! Therefore it will have to be a day that suits both you and the seller. Often sellers might prefer to arrange this at the start/end of the month- to tie in with their mortgage payments.
11. Send Your Deposit To Your Solicitor
You’re getting towards the end of your house buying process so the time has finally come to hand over your deposit! Deep breath needed!
Usually your solicitor will ask you for your deposit and for you to sign the contract (and possibly the transfer title deeds- which you need to sign witnessed). The contract is the document making the sale legally binding.
Typically banks won’t allow you to move more than £25,000 out of your bank account in one day. Therefore if your deposit is more than this you will need to contact your bank, in advance, and arrange a CHAPS payment.
12. Exchange Contracts
You’ve made it! The sale is officially legally binding! Up until this point either you or the seller has the opportunity to pull out. If you decide to pull out once the contracts have been exchanged then you lose your deposit money and any fees you’ve paid. Ouch!
There’s nothing for you to do at this stage as your solicitor will exchange on your behalf. You should get confirmation though that this has been done! You should also be sent final statements from your solicitor, including an invoice of any money you owe for their legal work.
13. COMPLETION DAY!
Hooray! The big day has arrived! You can go fetch your keys!! It’s common practice nowadays to collect the keys from the estate agents.
On completion day your solicitor will transfer the money (deposit and mortgage loan) to the sellers solicitor. Your solicitor will have requested the mortgage loan amount from your chosen bank ahead of completion day. Your solicitor should receive confirmation that the seller’s mortgage has been cleared.
14. After The Sale
After the sale your solicitor will register your details with the Land Registry. Typically you will have paid for this before this point, commonly on the invoice your solicitor sends you (see section 12). Once you’re registered as the new owners your solicitor should receive the new title deeds, and forward a copy on to yourselves.
How long should all that take?
The typical time frame is anywhere between 6 weeks to 8 months. There are a lot of variables; how quickly you find a property, how long the searches take and if any problems are picked up on the survey.
After all that time it’s finally over! Congratulations– you’ve made it! Time to celebrate, crack open a bottle of bubbly and enjoy your new home!
For more information about the fees involved when buying a house check out my other post:
