Buying a house for the first time can be a complex and often lengthy process. However, getting your head around the basics of how the process of buying a house works will make it undoubtedly easier.
So, how does buying a house work?
This guide to buying a house for the first time will outline each step you’re likely to take during the buying a house process. It will cover everything you need to know about the procedure for buying a house, including finding your dream home, getting a mortgage, making an offer, hiring a solicitor and much more.
By the end, hopefully, you will have a much clearer idea of the step by step process of buying a house. So, let’s get started!
The entire process of buying a house generally takes around 6 months to complete. However, this varies significantly from move to move.
Here are the average timings for some of the steps in the buying a house process:
Of course, these timings are largely dependent on various factors, such as whether the buyer or seller is in a chain, how fast the solicitor works, how complicated your financial situation is, and more.
So, now we know the timings, what is the process of buying a house?
We have divided the entire procedure for buying a house into a total of 13 steps, each outlining what needs to be done to get you that bit closer you living in your dream home.
The rate of homeownership among young adults has fallen substantially over the last 20 years – by 20% in fact.
While much of this change is likely down to rising house prices making it increasingly difficult for first time buyers to save a deposit and get their foot on the property ladder, for others, homeownership might simply not be the right choice.
To decide if buying a home is the right thing to do, it is a good idea to weigh up the pros and cons of buying and renting.
As well as determining whether being a homeowner is something you want, you will need to check that you can actually afford it.
The next step in the house buying process is deciding how much you want to spend.
This is largely dependent on how much of a deposit you can save. Once you know this, you can apply for a mortgage agreement in principle (AIP).
Having an AIP can help make you a more attractive buyer, showing the seller and their estate agent that you will be able to secure the money needed to buy the property.
When deciding on your house budget, don’t forget about all the extra costs that you need to account for when moving house, such as survey fees, solicitor fees, removals and furnishing your new home. Altogether, these extra costs can add another 15% on top of the price of your home.
If you’re planning on doing any major renovations or building work then these should also be considered.
Now you have all your finances in place, you can start the exciting process of house hunting.
This step in the process of buying a house starts with deciding where you want to live. This is a very important decision – get it wrong and you could either be unhappy with where you end up living or deal with the costs of moving again.
You will also need to decide what type of property you want to move to. Do you want to live in a new build house? An existing older house? Or, even a flat? Whichever property type you choose, this could help whittle down your house hunt significantly.
Once all these decisions have been made, you can start the house viewing process and eventually find the perfect property for you.
Once you’ve found your dream home, it’s time to put in an offer.
The first thing to do is decide how much you’re willing to offer for the property in question – you don’t want to offer too much that you end up wasting money, but you don’t want to offer too little that you risk losing the property.
After determining how much you’re going to offer, you should inform the estate agent via phone and follow it up in writing. The estate agent will then take your offer to the seller for them to accept or reject.
If your offer is accepted – congratulations! However, if your first offer is rejected, you can enter into negotiations with the seller until you reach an agreement or you pull out.
Although you should try to have all your finances in place as much as possible before making an offer, the next step in the process of buying a house is completing your mortgage agreement.
This is an important stage as you will need the lender to make you a formal mortgage offer before you can exchange contracts. This is also a good point to consider whether you will need life insurance with your mortgage.
Once you have agreed an offer on your house, you will need to get a solicitor or conveyancer to handle the legal work and transfer ownership of the property to you.
Some mortgage companies require you to go with a conveyancer that is on their panel, which will make the decision easier for you. Otherwise, you can make your own decision based on how much they charge.
The conveyancer will cover all of the necessary searches, including with the local authority and the Environment Agency, to ensure there are no major issues with the property. They will also check over the lease to ensure there aren’t any issues with property covenants or deeds.
The seventh step in the process of buying a house involves deciding which house surveys you will need.
Your mortgage lender will require a valuation by a surveyor to make sure that the property is in good enough condition to lend against. This is only a basic survey and will only look at the property superficially.
However, in addition to the valuation survey, you can commission your own survey to evaluate the condition of the property and alert you of any potential problems. It is usually worth getting a Homebuyer’s survey done to ensure you are paying what the property is worth.
Before you can exchange contracts, you need to arrange a deposit of 10% of the sale price of the property and transfer it to your conveyancer.
This next step in the process of buying a house is a big one – exchanging contracts.
When you exchange contracts with the seller, you become legally committed to purchasing the property – and they are legally committed to selling it to you.
After this stage, if you pull out without due reason, your 10% deposit can be lost. For this reason, you should only exchange contracts after you’re received the surveyors report and any necessary action has been taken.
You can only exchange contracts when the solicitor is satisfied with the searches, a formal mortgage offer has been received and arrangements for the 10% deposit have been made.
From the date of exchange, you need to make sure that you take out buildings insurance as you are now responsible for the property. It is usually a condition of the mortgage that you have buildings insurance in place.
Now we’re getting to the end of the process of buying a house for the first time, you need to negotiate any final things that have not yet been agreed or confirmed.
You need to make arrangements for your utilities, including the supply of electricity, gas, water and broadband. If you want to stick with your existing suppliers you update your address with them using SlothMove’s change of address service.
Now, you can even start purchasing all the new home essentials to fill your house with, ready for when you move in.
Meanwhile, the solicitor will inform the land registry that they are in the process of transferring the ownership of your property. They will also be liaising with the mortgage company to ensure the money will be ready for completion.
Completion is the next step in the housing buying procedure. This is when you pay for the property and take ownership of it.
On the day of completion, the money is transferred and the deeds of the property are transferred between each side’s conveyancer.
By the time of completion, the seller should have left the property and you should be able to collect the keys.
Finally, once you have the keys in your hand, you are free to move in! You can get the removal company to move all your belongings into your new home and start settling in.
The final step in the process of buying a house is paying your conveyancer fees. Your solicitor or conveyancer will send you an account covering all their costs and disbursements, as well as the purchase price of the house and stamp duty.
Your solicitor will normally pay the stamp duty for you, and ensure that the change of ownership is registered with the land registry.
And there you have it – the process of buying a house doesn’t seem that complicated after all, does it?
If you follow this step by step process of buying a house for the first time, you should have a fairly stress-free experience.
While buying your first house can seem incredibly daunting, with an endless list of things to do, breaking it all down into steps can make it much clearer.
So, if you were asking yourself ‘how does buying a house work?’, hopefully, this first time buyer guide has answered all your questions.
You shouldn’t forget, though, that the process of buying a house differs for everyone. There are numerous factors that can affect how the process works for you, such as whether you’re buying leasehold or freehold and whether the property is a flat or a house.
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