A simple guide to property purchases
So you’ve decided to buy a property – how exciting! Maybe it’s your first or maybe you have already got yourself on the property ladder and are now moving on. Either way, it can be a busy and stressful time, so we’ve put together some advice and a handy checklist of things to remember.
Financials
Before you start looking for a property to buy, you need to get your financials in order. We see many people looking online or even going on viewings before they speak to a financial adviser about what they can afford – big mistake, huge.
Make sure you get some advice from a professional, whether it’s your bank or a financial adviser who can tell you what your budget is. Consider extra costs, too. Such as:
- Stamp duty
- Solicitors or conveyancy fees
- Any grounds rent or maintenance charges that might be included in a leasehold property
Did you know that Outlet has a department dedicated to money matters? Call us on 020 3642 6875 and ask to speak to someone about Outlet’s financial services for expert advice on mortgages, insurance and more.
Stamp duty
Stamp duty is a tax on land and property purchases. You’ll pay a percentage of the value of the property you are buying at the time you buy. See below for a link to the current stamp duty rates.
Finding a property
There is no set timeframe in which you can expect to find a property. Some people get lucky and find the home of their dreams on the first viewing. Other see hundreds (yes, hundreds!) of properties before they can find a place. Chances are you will probably somewhere in between.
We recommend searching online using a property search function like Outlet’s, which will give you an idea of what’s out there. This will also mean you get to see things you love and others you really dislike so you can tell us what you’re looking for.
Found the perfect pad?
If you’ve found somewhere you’d like to buy, the next step is to make an offer. To do this, it can be helpful to come up with a bracket of costs that you are willing to pay. For example, you might be able to afford somewhere between £250,000 and £280,000.
The next stage is to carefully consider what you should offer. To come to this decision think about what you can afford as well as what would happen if the sellers reject your offer, which is quite common with a first offer.
If you make an offer at the very highest amount you can afford and it is rejected then you will have lost the property you want.
You should also do some research into the following:
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How much interest has there been in the property?
- How long has it been on the market for?
- Does the seller need to move quickly?
- Have they already found a flat or house to move to?
- Have they already received offers from other potential buyers?
- How much were they for and were they rejected?
- How long ago?
- How have prices in the area moved over the last few years?
- What planned developments in the area might influence values in the future?
Once you have all the details, you can make an offer, armed with all that useful information. You will usually do this through the seller’s property agent. It is quite common for this first offer to start a negotiation between the buyers and the sellers.
If your offer is accepted, it is becoming more common to request that the seller removes the property from the market. This will often depend on factors such as your current living arrangements (for example, are you able to move in soon?) or how in demand the property is.
Congratulations you’re offer is accepted!
Once the sellers have said the property is yours, it’s time to start making preparations to move and complete the purchase.
The legal stuff
You should appoint someone in the legal profession to handle the purchase and transfer of funds and deeds on your behalf. In property, the legal process is often called conveyancing and you can get their fees agreed upfront. See our link below for advice on finding a solicitor or conveyancing service.
Surveys
Your mortgage company will probably carry out a ‘mortgage valuation’ survey on the new property before they agree to hand over your money. However, this should not be confused with a building survey. It’s sensible to instruct a chartered surveyor, either before or after making an offer, to ensure the building is structurally safe and that there are no hidden risks to buying it. The survey they provide will usually highlight any areas where problems could arise in the future or parts that need immediate attention.
If the property is new built, it should be covered by a compulsory 10 year guarantee (NHBC) against building defects through an insurer. If you are purchasing a home which is less than 10 years old you may decide not to order a structural survey after discussing the matter with your solicitor.
What’s the difference between exchange and completion?
The ‘exchange’ when referring to a property purchase means the transaction is legally binding. At exchange, a deposit of around 10% of purchase price will be transferred to the Vendor’s solicitor.
Completion usually takes place 28 days after the date of exchange but it can be sooner or later as required. It is possible to exchange and complete on the same day if desired. On completion your Solicitor hands over the remainder of the purchase money to the Vendor's Solicitor.
As soon as you’ve ‘completed’ your property purchase, you can get the keys to your new home from the seller’s estate agent (or sometimes the previous owners directly) and move in.
Moving day
You’ve finally made to moving day, but not the real hardwork starts. The key is to get organised weeks in advance if you can. For plenty of other great tips, check out our guide on moving from one property to another, here.
Some useful links
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