1.How long will the buying process take?
Below is a typical timeline for a purchase in Wales, but timescales vary depending on the buyer's and seller's circumstances, plus conveyancing problems can arise and add delays:
Find a property: Research the area, scour estate agents and search websites.
Put in an offer: Tell the seller what you're willing to pay and any conditions.
This can take anything from 6 weeks to 8 months
It's accepted: Now get a survey to check the property's condition. Your solicitor. checks any legal issues.
Offer to Exchange: 2 to 6 weeks.
Exchange: You pay your deposit and can't back out without major cost.
Exchange to sale: Instantly to 4 weeks
Completion: You hand over the rest of the cash in exchange for the keys and deeds. The property's now legally yours.
Important: nobody is legally bound to complete the deal until exchange of contracts.
2. Can you afford the property you want?
There's no point getting excited about the property of your dreams if you've no idea whether you can afford it. Avoid unnecessary disappointment
a. Have the upfront funds you'll need, and...
b. Can borrow the additional cash you'll need.
If you have, pat yourself on the back and skip to step three.
3.How Much Can I Borrow?
To be more confident (and make yourself more attractive to estate agents and sellers), find the mortgage that's right for you early on and get an application in principle (AIP) done. Then you can find your dream home and really start your house hunt.
4.Make the right offer
Don't spend more than you can afford! Don't over-extend yourself - remember all the additional costs you'll need to cover.
Get fixtures and fittings in writing to avoid getting the keys to a stripped-bare house, ask the seller for a list of all fixtures and fittings that are included in the purchase. Are to light fittings included? Are any of the appliances included? Will the carpets be included?
5.MILESTONE - offer accepted
Mini celebration time! But there's still a lot to do (and nobody is contractually obliged) so don't get carried away yet.
Watch out for gazumping and gazanging!
You and the seller are not legally bound to complete the purchase until you have reached exchange of contracts. Until you reach that milestone, there is always a risk of being gazumped or gazanged.
What is Gazumping? When another buyer offers more money than you and your seller reneges on your deal. You could ask for them to 'take it off the market' as a condition of your offer, reducing the chances of them attracting another buyer (though it's not foolproof).
What is Gazanging? When your seller decides to cancel the sale and stay, usually because prices are going up, and they can make more money if they wait a few months.
Sadly, there's little you can do to avoid either of these, as they're both dependent on the actions of the seller, and can end up losing you a lot of money, especially if it happens just before exchange of contracts where your solicitor (and possibly your surveyor) have already carried out a lot of work.
The most you can do is to be as quick as you possibly can be between having your offer accepted and exchanging contracts - and this means getting your solicitor and mortgage lender or broker to hurry things up.
6. Find your best mortgage
An agreement in principle (AIP) is usually only valid for 30 or 90 days depending on the lender so if your search took a while, it might have expired.
Don't worry though, if you got accepted before, you'll probably be accepted again.
You shouldn't automatically go back to the first lender anyway. The range of mortgage products on offer can change on a daily basis, so it's definitely worth a quick check of the market again to see if you can find a better deal.
It's worth the extra effort to do another check. Getting a 4% deal instead of 3% on a £150,000 repayment mortgage over 25 years will cost you £24,000 more.
We can recommend a facial advisor/mortgage broker if you want?
Get a mortgage illustration - Make sure you get a personalised mortgage illustration. It'll detail all the key features of the mortgage. You'll need this later on. Scan it, keep it and file it.
7.Don’t just go direct to your bank
There are many lenders and only one has the best deal for you. What are the chances it's your bank? If you have a good credit score, then another lender is likely to want you just as much as your current bank. Visit an independent mortgage broker. - It’s one of the biggest financial decisions of your life, so get it right. If you want our help - Lloyd Financial Management Ltd offers a Full independent mortgage service.
10.Your solicitor will carry out searches for you
While your mortgage application is being looked at by the lender, your solicitor will start to carry out the necessary searches. Searches and prices vary based on the location.
Although some of them are optional, it's advisable to get them all carried out. Your mortgage lender will insist on some of them. For example:
Local authority searches - check to see if there is anything you need to be aware of, such as any building control issues, enforcement actions and nearby road schemes.
Drainage searches - check it is connected to sewers
Environmental search - checks land isn't contaminated.
These searches cost money and your solicitor will usually charge you for these early on in the process, so they are not out of pocket. There's usually no way to minimise these costs.
Chase your solicitor - To put it politely, some solicitors work at their own pace. Make regular phone calls to get papers processed quicker. Remember, you're paying them. If they don't meet your expectations, try writing to a senior partner.
11.Do you need to do a property survey? If yes, book it now
Once you're sure you can borrow what you need, it's time to make sure the property is in good condition too. You can delay doing this until after your mortgage offer has been made but always do it before exchange.
A mortgage valuation is NOT a survey!
Yes, the mortgage lender has carried out a basic valuation to assure itself it's happy to lend on it. But this gives you no protection at all. If the property were to fall down the day after you bought it, it would be tough luck. Yet too many people rely on the mortgage valuation.
Still not convinced a mortgage valuation isn't good enough?
Did you know that sometimes the valuation carried out is limited to a ‘drive by'? Here, the valuer drives past the house and the inspection is limited to what can be seen through the car window! OK, they might get out the car and have a look, but they certainly don't go inside. Often it’s just to check the property actually exists.
Unless you're an expert, get a professional opinion. If a problem is found, it's a good reason to go back to the estate agent and renegotiate on price. This may seem a bit late in the process, but a survey is an additional cost so there's no point in shelling out until you know you can definitely get the mortgage.
There are 3 main types of surveys:
Homebuyer's report - £300-£400- Is suitable for conventional properties less than 50 years old. Sometimes you can pay your mortgage lender to get a homebuyer's report carried out at the same time as the basic valuation.
Full structural survey - up to £1,000 - More relevant for older or quirkier residences, these are much more detailed, covering everything and can cost up to £1,000, but often are well worth the expense. It could well give you ammunition to haggle down the purchase price of the property.
Whichever you choose, just be sure you are clear on what they cannot check. They should try to access attic space, etc, but they can't start knocking lumps out of walls, or lifting the carpet in someone else's house (unless the seller agrees).
Snagging survey - can be free - Even those buying new-builds might still have to get out their wallets. A snagging survey pinpoints defects and unfinished bits, so you can push the developer to correct them before completion. These can cost £300 upwards depending on the size of the property.
We can recommend a surveyor if you want us to?
12.MILESTONE - You've got a mortgage offer!
Another celebration point. You now have a formal offer that says the lender is willing to lend you the money to buy that property. Get the bubbly on ice and then carefully check it:
Go & find your mortgage illustration - Cross-reference the new mortgage illustration and the offer document your lender has sent with the illustration you safely put away. If there are any
discrepancies, go back to your broker (or lender if you went direct) and question it.
The mortgage offer must be accurate - Everything on this document needs to be accurate, especially your personal information and the figures. If not, raise it with your broker or solicitor to get it resolved ASAP.
A serious mistake could mean the lender insists on credit-checking you again or you end up borrowing too little and there's a shortfall when it's time to complete the purchase. Even something like a misspelt name could cause delays, expense, and at worst, could mean the mortgage offer is withdrawn.
Check the mortgage conditions - The mortgage offer will state what conditions need to be met before the lender will hand over the cash. It's your solicitor's job to check these have been met, so don't think you can ignore any of them.
13.Sort out your buildings insurance NOW.
"But I don't even own it yet!" you cry! You might not own it, but once you've exchanged contracts you're legally bound to purchase it, so it's better to be safe than sorry.
Check your mortgage valuation report for the rebuild value the surveyor estimated. It might not be anything like the purchase price, but you need to be sure that you'd have enough cover to rebuild it if something did happen.
14.Negotiate a completion date.
Your solicitor will update you on the results of the searches. If all is good, the next step is to come to an agreement on a completion date with the seller. The completion date is the date the keys get handed over. This needs to be a date that suits both you and the seller.
Try and be flexible here. Many sellers will want to time it for the start or end of a month to chime in with their mortgage payments. Of course, if you're selling your current property too, you'll need to take into consideration when you're completing with your buyers.
15.Get some quotes from a couple of Removal companies.
Moving is not as straight forward as you think! Professional removal companies are a God send, however their prices vary greatly, get some quotes, but wait till you’ve exchanged contracts before you part with any money.
16.Get your deposit money to your solicitor!
You're almost ready to exchange contracts, which means you need to get your deposit to your solicitor. It's easiest to spend the couple of weeks before moving your deposit money into one bank account (ask your conveyancer for advice on this).
Banks don't usually allow you to move more than £10,000 out of an account per day, so if you want to move more than this, you'll need to call your bank and arrange a CHAPS payment to your solicitor.
A CHAPS payment (it stands for Clearing House Automated Payment System) is usually made the same day. You'll need to pay your bank per CHAPS payment, so factor this into your costs (check with your bank their fees). Your solicitor will also get you to sign the contract at this point - this is the point where you commit to buying the vendor's house.
17. MILESTONE - exchange contracts.
When your solicitor and the seller's solicitor swap signed copies of the contract this is known as the exchange of contracts. Now you can really celebrate.
There is now a legally-binding contract between you and the seller. Once this has happened, you can't pull out from the sale. If you do, you'll forfeit your deposit money. But, on the plus side, the seller can't back out either.
After this point, a lot of simple paperwork happens relatively quickly - so the next few steps are all quick hits.
18. Book & Confirm the removal company.
You are now safe to commit to a removal firm. The date is now set! We can recommend a couple of companies if you want us too?
19. Get a completion statement from your conveyancer.
Your solicitor will give you a completion statement with a clear breakdown of the money you need to give the solicitor. This will include any outstanding deposit, land transaction tax, solicitors' fees etc. You'll usually have to pay these on or before your completion date.
20.Your solicitor will carry out MORE searches...
Before completion, your solicitor has to check that the seller still owns the property and that you haven't been made bankrupt since your mortgage offer. You now need to sign the transfer deed.
Your solicitor will prepare the transfer deed. You need to sign it, and it needs to be witnessed. It confirms you're willing to take ownership of the property. Your solicitor will send it to the seller's solicitor.
Some buyers won't need to sign this. If you're unsure, or haven't been asked to sign one, check with your solicitor.
21. Your solicitor draws down the funds from your lender.
Your solicitor will request the mortgage money from your lender so that payment has time to clear in the solicitor's account. It's at this point you (well, your solicitor) actually get the mortgage money you've agreed to borrow.
22.Paying for the house.
The solicitor will send the full payment to the seller's solicitor and receive their title deeds and proof that the seller's mortgage has been cleared (this means their bank no longer has a claim on the property).
23.MILESTONE - completion! You have a new home.
The keys are finally yours. Now you have the joy of moving. That's the bit of the process that's supposed to be the most stressful - good luck!
24.Pay your land transaction tax (through your solicitor).
You have 30 days for your solicitor to send the Welsh Revenue Office your transfer deed and for you to pay your land transaction tax, though usually they'll have asked for the cash before completion.
25.Officially register your ownership.
Your solicitor will register your details with the Land Registry. You'll need to send them a £200-£300 fee to cover this (it can be larger or smaller depending on the price of the property you're buying). Again, this is usually detailed in the statement of completion, and paid by completion day.
26. Get the title deeds, and that's it...!
Your solicitor will get the new title deeds from the Land Registry and forward them to your mortgage lender (or you if you're mortgage-free). Sometimes they'll keep them on file if you don't request them, or don't want to keep such important documents in the house.