Buying your home is both
an exciting and nerve-wracking process. As it is probably the biggest
investment you will ever make, it is sensible to familiarise yourself
with the basics of how the transaction will take place, the key
processes and what you can do to help yourself. You are not on your
own - Kings will guide you every step of the way and provide you
with the valuable support you need in order to find your dream home
and complete your purchase smoothly.
I want to buy a home - how do I go about it?
The first thing to do is decide on the key requirements for your new home. These include:
Price - It is really handy to know how much you can afford, so that
when you find a property you want, you can put in an offer straight
away. The best way to do this is to make an appointment with a fully qualified,
independent financial adviser and discuss what mortgage products are available
and what amount you can borrow. Many lenders will give you an 'Agreement
In Principle' (AIP), which means that you can start to search for
a property with the confidence that you already have a mortgage
agreed (subject to certain conditions, for example property survey
and credit search)
Property Type - Do you want an apartment or a house? Do you want
a garden or off-road parking? Is it important to be near a train
station? Take some time and work out exactly what you are looking
for in your new home, what you are prepared to compromise on and
what would be the absolute ideal. This way, you won't spend time
viewing properties that don't meet your criteria, and you get to
view more homes that may be of potential interest.
Start Looking - Register your requirements with Kings in your chosen
area, explaining clearly your requirements and price range. Another
thing to mention is how quickly you are looking to move, as this
becomes a primary factor in the moving process. It is also important
to mention that you are a First Time Buyer, as this means that many
homeowners will see you as an ideal candidates to buy their property,
because you don't have a home to sell (or are a Non Dependent Purchaser)
Keep In Touch - Estate Agents handle hundreds of calls a day. If
you want to stay on the top of their list to ensure they contact
you first when your ideal property comes onto their books, it pays
to call them once a week or drop in their office just to let them
know you are still looking.
Make Offers - As a First Time Buyer, you are in a great position
as you have no chain and therefore can move quickly, this can be
advantageous, but not always when negotiating on price with a Vendor.
Don't be afraid to make an offer on a property - speak to Kings
for advice about what would be an appropriate figure to put forward.
Whilst the language used during the course of a property transaction can be slightly
intimidating at first, once you understand the various terms used,
the process actually becomes a lot less daunting. Below we've
outlined some of the more common phrases and terminology that
you may come across:
Applicant - The person
who wants to buy a property. (In other words, you!)
Vendor - The person who
owns the property that you wish to buy from.
Conveyancing - This is
the legal term for the home buying process. You will have to nominate
a solicitor to act on your behalf in order to buy your property,
who will be referred to as a conveyancing solicitor.
Mortgage Valuation - A basic
inspection carried out by the Mortgage Lender to ensure that the
property you wish to buy is correctly priced and therefore suitable
collateral for your mortgage loan. This is conducted by a Chartered
Valuer or Surveyor on behalf of the Mortgage Lender.
Homebuyers Report - A
more advanced inspection than a Mortgage Valuation, the Homebuyers
Report looks in more depth at the condition and structure of the
property you are looking to purchase, and checks for key risks
such as damage by flood or subsidence, whether or not the building
is in good condition etc. Again, this is carried out by a Chartered
Full Structural Survey
- This is the most thorough form of check on a property, and you
can expect to receive a full and in-depth report from your Surveyor
which will detail everything including the state of the roof and
all external walls, the state of the internal structure and all
the component parts of the property. This sort of survey is very
valuable for those people who are looking to buy an older property
which requires modernisation or renovation.
HM Land Registry and General
Searches - As part of the conveyancing process, your solicitor
will request a copy of the deeds of the property that you are
buying from the Land Registry, to make sure that the property
actually belongs to the person who is selling it, and that no
'charges' (e.g. debts that are secured against the property) other
than a mortgage, relate to the property. Your Solicitor will also
run a series of other 'searches', which include environmental
surveys and planning applications. Your Solicitor will then be
able to advise you of any factors that are particularly relevant
to your purchase and what action (if any) needs to be taken.
Home Information Packs (HIPS)
- A new scheme that will be introduced formally by the government
soon, but is initially being trialled by some estate agents already.
This is aimed at reducing the time between 'Offer', 'Exchange'
and 'Completion' by putting the emphasis on the Vendor to have
a survey completed and the Land Registry and other searches undertaken
prior to putting their property on the market.
Non Dependent Purchaser
- This refers to anyone who wants to buy a property, but does
not have one to sell, e.g. First Time Buyers. Vendors see Non-Move
Dependent applicants as ideal because there are (normally) fewer
complications with this kind of transaction as there is no 'Chain'.
Chain - A common term
used to describe all of the Vendors and Applicants involved in
a property transaction. A First Time Buyer is normally at the
beginning of the chain, as they are buying the cheapest property,
whilst the Vendor of that property is (normally) buying a more
expensive property, again with the owners of the property they
wish to buy selling to purchase another property. This goes on
until the final buyer in the chain purchases a property where
the Vendor is not buying another home with the proceeds from the
sale (as happens with either a new property or an Executors sale)
The key issue with chains is that, if for any reason one of the
Applicants or Vendors drops out the whole chain can collapse.
Offer - The formal term
given to when a potential applicant approaches the Vendor's estate
agent to let them know they would like to buy a property that
they are marketing, and provides them with the price that they
are prepared to pay for that property. The estate agent will then
contact the Vendor and give them the details of the offer, including
the price that has been suggested by the Applicant and also the
position of the Applicant (this is where being a First Time Buyer
can be an advantage). The Vendor then decides whether or not to
accept the offer, and advises their estate agent accordingly.
Sale agreed / Sold Subject To Contract (SSTC)
- Generally, once a private owner has accepted your offer, the property is
withdrawn from the market, and you have commitment from both Vendor and
Applicant to proceed, although a sale is not legally binding to either
party until exchange takes place. Occasionally the property will remain
on the open market although your price has been accepted. This commonly
happens because the property is owned by a large corporate (i.e. a house
builder or bank/building society) and these are the guidelines the agent
has to adhere to. It is always worth asking the agent if the property
will be taken off the market once your offer has been accepted.
Exchange - Exchange of
Contracts happens when the acting Conveyancing Solicitors on both
sides literally exchange signed contracts. At this point, although
previously suggested in the contractual negotiations, the agreed
completion date is now set (and will apply) and you will be required
to hand over your deposit, which could be anything from 5 - 10%
of the total value of the property.
Completion - Completion
takes place when the remainder of your funds are transferred via
a secure banking process called Telegraphic Transfer (TT) to the
Vendor's Solicitor. Once these funds have cleared, the entire
process is said to be complete. Your Estate Agent cannot release
your keys until legal completion has taken place, and a call from
the Vendor's solicitor to the Estate Agent has been made to authorise
the release of the keys.