The thought of buying a house can be daunting – it seems like there are a myriad of complicated stages before getting the keys in your hand.
If you break it down into simple, manageable steps and make sure you seek proper legal and financial advice, it’s actually easier than you think. Keep reading for five steps you need to take.
1. Determine your budget
First off, you have to know how much money you can actually afford to spend on a property. That includes having all details of your savings, as well as shares or investments, to hand. Plus, it’s important not to forget about stamp duty, registration fees and legal costs. Needless to say, betting transactions and missed loan repayments are red flags to financial institutions, so ensure that these do not apply to you. It is also necessary to have life insurance to buy a property, so get this sorted before the house-hunting begins.
2. Choose the property
Now you’re ready to pick a property. Once you’ve picked the right place, it’s time to appoint a solicitor, who will be able to help you with paperwork throughout the process.
3. Pay the estate agent booking deposit
The first step towards securing your property is paying a refundable booking deposit to the estate agent, after which they can issue sales details – such as the names and current addresses of the buyer and seller, the price and the proposed closing date of the sale.
4. Prepare and sign the necessary documents
Next, contracts are issued, as well as copies of title deeds. The contract is prepared by the Vendor’s solicitor. Your solicitor needs to check the terms of the proposed contract and review the title documents. This involves examining any issue which may affect the property such as planning issues, rights of way, mapping issues etc.
A completion date needs to be agreed, and set out in the contract. In the case of a second-hand property you should arrange for a building survey to be carried out. Your bank or building society will send you a loan pack, which needs to be completed and signed. After checking and signing the contract, it’s time to pay the contract deposit, which is usually 10% of the purchase price minus the booking deposit you’ve already paid. The contracts are exchanged and a binding agreement is made between the parties.
5. Close the sale
Next, the balance of funds are delivered and exchanged for the completion documents. Finally, it’s time for the close of sale. This is the time you get the all-important keys, the stamp duty is paid, and the deed is sent to the Land Registry for registration.
Buying a property doesn’t have to be an insurmountable hurdle, contact us if you’re looking at buying a property soon.
Our thoughtful, clear advice will guide you through the process to home ownership.
Article by: Ray Fitzpatrick, Partner
02 May 2019