Guide to buying a property
Our guide lists the typical steps involved in buying a home.
- What service can I expect from an Estate Agent?
- What are the steps involved in buying property?
- What house buying costs do I need to consider?
- What is the difference between freehold and leasehold property?
- What type of home buyer’s survey will I need?
- What does the solicitor’s role involve?
- What happens at ‘exchange’ and ‘completion’?
- What do I need to arrange at exchange of contracts?
- Professional Associations
What service can I expect from an Estate Agent?
Estate Agents are paid by the seller (vendor) to introduce a buyer to the vendor’s property and oversee the sale by liaising with all parties including solicitors. An Estate Agent will act in the best interests of the seller, and is not obliged to highlight any negative aspects of the property to you. It can often be difficult for Estate Agents to please both buyer and seller, though many experienced agents will do their utmost to assist both parties as fairly as possible.
Professional Estate Agents will belong to the The Property Ombudsman (TPOS). Member agents must comply with these associations code of conduct or face fines and penalties. Agents must advise the seller of all ‘offers’ they receive from potential buyers.
What are the steps involved in buying property?
- Find a property
- Secure a mortgage
- Appoint a solicitor
- The mortgage company will carry out their valuation on the property
- You instruct a surveyor to do a home buyers report or full survey (you decide)
- The Vendor’s Solicitor supplies draft contract, title deeds on the property to your Solicitor
- Your solicitor arranges for local search and raises any queries with the Vendor's solicitor.
- Once your solicitor is satisfied you proceed to sign contracts and agree a completion date.
- You provide the Vendor with the deposit via your Solicitor
- Signed contracts are sent to you from the Vendor via your Solicitor
- Contracts are exchanged and you arrange buildings and contents insurance
- Completion takes place on agreed date
- Your solicitor pays remainder of purchase price to Vendor's solicitor
- The Vendor’s solicitor confirms completion of sale and arranges for keys to be handed over.
- You move in!
What house buying costs do I need to consider?
When you buy a property you will typically incur these costs:
- Solicitor's fees (including stamp duty, local authority searches)
- Part payments on council tax, ground rents, service charges
- Purchase deposit (typically 10-20% of purchase price)
- Property insurance and house contents insurance
- Mortgage (including indemnity premium and fees - often added to the loan)
- Surveyor's fees
- Removal firm
- Services (any utilities that need to be reconnected, mail redirection)
- Life assurance and mortgage insurance (if relevant to your requirements)
What is the difference between freehold and leasehold property?
Freehold: You will solely own the property and have full responsibility for the maintenance and repairs of the property.
Leasehold: You only own the property for as long as is stated in the lease; you are granted the right to live there by the freeholder. At the end of the lease the property ownership reverts to the freeholder.
Many leases are set for 999 years. Mortgage lenders are unlikely to lend for a lease with less than 60 years to run. Most lenders require that at least 20 years left on the lease after the end of the mortgage term.
The lease stipulates:
- Who is responsible for maintaining and repairing different parts of the property
- The rules you must adhere to as a resident.
- The ground rent due to the owner of the land (the freeholder)
For further information visit the Leasehold Advisory Service
What type of home buyer’s survey will I need?
The home buyer’s survey you will need depends on the age and type of property you are buying and the lenders requirements:
Mortgage Valuation Report - This is carried out by the mortgage company to determine that they are prepared to lend you money to buy the property.
Home Buyer's Report - This was made available by The Royal Institution of Chartered Surveyors in the 1980's to bridge the gap between the basic Mortgage Valuation Report and Full Structural Survey.
Full Structural or Building Survey Report - This survey can be a very detailed report depending on what is agreed with the surveyor. It goes a few steps further than the Home Buyers report and is often recommended for property that is particularly old e.g. listed.
What does the solicitor’s role involve?
When the buying processes begins the Vendor's Solicitor will obtain the property title deeds from the Vendor's Building Society or Bank in order to prepare the contract of sale. The buyer’s Solicitor will then examine the papers and raise any queries based on the title deeds, and related matters about the property.
When your Solicitor is in receipt of the following you can proceed to exchange of contracts: replies to queries, a satisfactory local search, a copy of a mortgage offer, a signed contract, deposit monies.
What happens at ‘exchange’ and ‘completion’?
Exchange means the transaction is legally binding, at which point you are obliged to proceed with the sale. At exchange, a deposit of around 10% of purchase price will be transferred to the Vendor’s solicitor.
Completion is normally 28 days from the date of exchange but it can be sooner or later as required. It is possible to exchange and completion on the same time if desired. On completion your Solicitor hands over the remainder of the purchase money to the Vendor's Solicitor.
What do I need to arrange at exchange of contracts?
Arrange removals- The British Association of Removers (est. over 100 years) can give you a list of removal firms in your area.
Arrange insurance - Buildings & Contents - You will need to arrange insurance for your property usually when contracts have been exchanged. Your solicitor will be able to advise you.
Services, Maintenance Contracts and Council Tax - It is important, in order to avoid unnecessary costs/avoid disconnection, that you notify the service authorities - gas, water, telephone, electricity - of the date that you will be moving from your property to a new property.