Deciding to buy a new home is one of most significant financial commitments most of us will make in our lifetime. Whether it’s a first step onto the ladder, a move to something larger or downsizing for your golden years, it can certainly seem daunting and a little stressful. There is a lot to think about for sure, but with a good understanding of the process, a little time spent researching the market and the appointment of good advisors, most of the stress should be alleviated. To help you prepare, we answer below some of the questions we are frequently asked by buyers. If there is anything we haven's covered, then please feel free to give us a call. We are here to help.
How much does it cost? – there are a number of costs involved in purchasing a home. Before starting your search, take the time to prepare a detailed budget of what expenses you will incur. The budget should include both the deposit/purchase price and any ancillary costs such as stamp duty, conveyancing fees, moving fees, new furniture etc. In addition, prepare a further budget for the annual running costs of the property including mortgage payments, property taxes, utilities, commuting to work, expected annual maintenance costs and the like. If you are buying a leasehold property ensure that your budget also allows for ground rent and the annual maintenance charge.
Should I buy a freehold or leasehold? – the are pluses and minuses associated with both and the final decision will largely depend upon your own personal preference. For further information, our additional blog explains the differences between freehold and leasehold.
What is a financial advisor or mortgage advisor? - these are professionals who will offer independent advice on financial matters and will help determine the most suitable financial product for you based on your preferences and needs.
There is a log of jargon involved, what does it all mean? – we agree there is a lot of “property speak” involved in buying, selling and letting out property. To understand what this jargon means, please refer to our “jargon busting” blog where we explain some of the terms you are likely to encounter when buying a property.
What is an Energy Performance Certificate? – any property that you are buying should have an Energy Performance Certificate (EPC) which gives you information regarding the energy efficiency of the property and what the energy running costs are likely to be.
How do I make an offer? - if you have found what you are looking for and it ticks all the boxes, it’s time to make an offer. Making the right offer is a delicate balance of offering enough to secure the property versus not paying more than you need to. In this respect, again make sure you do your homework. Try to understand if the property has received much interest. How long has it been on the market? Has there been a price reduction? Have there been any offers put forward that have been rejected? What are the motivations of the seller? How is the property priced against others on the market? Is there a lot of work to be done on the property and is this factored into the price? An offer that is well thought through and based on good information should initiate a sensible negotiation. For more information, see Aspire's guide to making an offer.
Do I need to use a solicitor? – yes, you will need to use a solicitor or conveyancing firm to complete the legal aspects of the purchase on your behalf. The seller will also need to appoint their own solicitor or conveyancing firm.
How much deposit do I need? – different lenders and mortgage products will require you to contribute a certain amount to the purchase. Working with a mortgage broker will allow you to quickly understand all of the options available to you.
What are title deeds? - title deeds provide proof of ownership of the property and are normally held by the mortgagor of a property. As part of the conveyancing, the title of the property will be transferred to you and once complete, this will be registered at the Land Registry.
What are searches? - your solicitor will undertake “searches”. The most common searches check for any potential developments near the property and also provide information on drainage, flooding and mining near the property.
What are “enquiries”? - your solicitor might raise a number of enquiries/questions about the property based on the draft contact, search results, survey or any other matter. Ideally, all enquiries will be raised at one time, however practically, they tend to be raised sporadically as more information is received by your solicitor.
What are property information forms? – the seller will provide you with a number of “property information forms” which give further information on the property, the fixtures and fittings to be included in the sale and, where relevant, details regarding leasehold property.
What will the seller leave in the property? - any fixtures and fittings identified in the property information forms as being included in the sale should be left at the property on completion. Some additional fixtures (such as white goods) might be sold between the parties for an amount in addition to the agreed purchase price of the property.
How long does it take to buy? – once you have an offer accepted there is a lot to do to complete the sale. This process is called “sales progression” and is further described below. You will have to be patient as property searches, lending agreements etc all take a considerable amount of time to complete. You should expect sales progression to take 1-2 months and maybe a little longer if there are any complications with the purchase.
How can I check on the progress of my purchase? – we are available at any time to answer any questions that you might have. We know that buying a home can be stressful at times and communication is critical.
Do I have to pay stamp duty? – it is likely that you will have to pay stamp duty on the purchase. The exact amount that you will need to pay is determined by the value of the purchase and whether you already own a home. The Government has issued a useful stamp duty calculator that you can use to determine the amount payable;
Should I have the property surveyed? – we would certainly recommend it. Most lenders require a valuation of the property which usually involves a superficial inspection. In addition to this, you should consider engaging a Chartered Surveyor to undertake a detailed home assessment and inspection. For further information please read our blog on property surveys.
What is sales progression? - the period between agreement of offer and completion of the sale is called sales progression. There are a number of parties involved including solicitors, surveyors, mortgage companies, the buyer and seller and of course, the agent. While much of the work performed during this period happens “behind the scenes”, it still requires a considerable degree of coordination to keep things moving along.
When do I have to pay the deposit? – as a buyer you will have to pay a deposit (which is normally 10% of the agreed purchase price) on the date of exchange of contracts (see further information below).
From what date do I need to insure the property? – you should arrange for buildings insurance from the date that you exchange contracts. You should arrange contents insurance from the date that you move into the property.
What does exchange of contract mean? - once all enquiries and outstanding matters have been dealt with and a formal mortgage offer received, exchange of contracts can take place. Both the buyer and the seller will sign identical contracts and the “exchange” is undertaken between solicitors. On exchange, the buyer typically makes a “deposit” payment of 10% of the contract amount to the seller’s solicitor. The balance of the purchase price is paid on the completion date.
Can I pull out after exchange of contracts? - prior to exchange of contract, there is no obligation on either party to proceed, and either party may withdraw without penalty (other than paying the costs that they have incurred for solicitors, surveyors etc). However, an exchange of contract between solicitors creates a legally binding commitment on both buyer and seller to complete the transaction. If either party withdraws from the transaction after exchange, there will almost certainly be legal and financial consequences.
What is “completion”? - completion is the day that you or your lender will pay the purchase price outstanding and you will receive the keys to your new home. Your solicitor or agent will notify you when completion takes place. Depending on the mortgage company, this normally takes place in the morning of the completion date, however where there is a long chain or there are banking delays, it can happen slightly later in the day.
How do I get the keys? – once your solicitor confirms that the transaction has completed, you can pop into our office and pick up the keys to your new home.
How long will it be between exchange and completion? – on rare occasions, exchange and completion take place on the same day. However under normal circumstances there is normally a couple of weeks allowed so that the buyer, seller and lenders can get themselves ready for completion.