Buying your first property can be a daunting experience, from arranging viewings, to sorting a mortgage, making an offer and using a solicitor, there are lots of stages to go through. We've put together a simple guide below to help you on this journey.
The first thing you need to do is decide how much you can afford. You will need to look at how much money you have available yourself and how much you can borrow. There are a number of different financial institutions, which offer loans to people buying a property, for example, building societies and banks. At nest we have an adviser who can help guide you through the process, offering a certificate of a mortgage in principle to help you get your offer accepted
Before finally deciding how much to spend on a property, you need to be sure you will have enough money to pay for all the additional costs. These may include:-
• survey fees
• valuation fees
• Stamp Duty Land Tax
• land registry fee
• local authority searches
• fees, if any, charged by the mortgage lender or someone who arranges the mortgage, for example, a mortgage broker
• removal expenses
any final bills, for example, gas and electricity, from your present home which will have to be paid when you move.
Making An Offer
Once you have decided on the property, we will guide you through the process. We will need your financial adviser details or if you are a cash buyer, we need proof of finance.
Once an offer has been agreed, we will need your solicitors details. nest have solicitors we use on a daily basis who we have a strong working relationship with, who like us are committed to getting your offer to go through completion.
The Legal Bit
Your sale becomes legally binding on both sides when contracts have been exchanged through your solicitor. On exchange a completion date is set by mutual agreement, sometimes with a bit of compromise. This is also legally binding.
Although it is impossible to give a precise idea of how long the legal work involved in buying a property, our job is to ensure this is pushed forward in a timescale that all parties involved agree with.
Next you will instruct your conveyancer to draw up a contract which will eventually be signed by you and the seller. However, before the contract can be signed, your solicitor or licensed conveyancer must make sure that there are no problems with the ownership of the property, rights of way, access, or future developments in the area that might affect the property. This is called ‘making enquiries and searches’. The solicitor or licensed conveyancer makes the enquiries and searches as follows:-
• local searches. These are enquiries made to the local authority (or in Northern Ireland, the appropriate government department) about any matters which affect the property which involve the local authority, such as whether there is a compulsory purchase order on the property. Local searches also include questions about any proposed changes or development in the area that might affect the property such as roads, housing, shops. During the local search, the local Land Charges Register (Registry of Deeds in Northern Ireland) is also checked. This gives information about any matter which affects the property such as tree preservation orders, if it is a listed building or in a conservation area; and
• enquiries made to the seller by the solicitor or, in England and Wales, a licensed conveyancer. These are a set of standard questions about the property, boundaries, neighbour disputes and fixtures and fittings that will remain in the property. There may also be additional questions that the solicitor or licensed conveyancer thinks are necessary, such as the transferability of guarantees for any work done on the house, for example, a damp proof course; and
• from the Land Registry.
Arranging to pay the deposit
Whilst the solicitor or, in England and Wales, a licensed conveyancer is making the enquiries, you should sort out how you will pay the deposit that has to be made when the contracts are exchanged. This deposit is often 10% of the price of the home but it can vary.
If you are also selling a house, it is usually possible to put the deposit on the property being sold towards the deposit on the property you are buying.
Insuring the property
You should make sure that buildings insurance is arranged from the date of exchange, because once contracts have been exchanged you are responsible for the property.
Exchange of contracts
The final contract between you and the seller is prepared when:-
• the solicitor (or licensed conveyancer) and you are satisfied with the final outcome of all the enquiries
• any surveyor’s report has been received and any necessary action taken
• the formal mortgage offer has been received
• arrangements about the payment of the 10% deposit have been made
• the date of completion has been agreed.
You and the seller each have a copy of the final contract which you must sign. These signed contracts are then exchanged. At exchange of contracts both you and the seller are legally bound by the contract and the sale of the house has to go ahead. If you drop out, you are likely to lose your deposit.
You should make arrangements for the supply of gas, electricity and telephone service and make sure that the seller is arranging for final meter readings to be made.
Nest will get a call to allow us to release keys. This is the moment you have been waiting for. The keys are released from the bottom of the chain upwards so a bit of patience and compromise is needed.
• the mortgage lender releases the money
• the deeds to the property are handed over to your solicitor or licensed conveyancer
• the seller must hand over the keys and leave the property by an agreed time.