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Buying isn't necessarily the best option for everyone. You will need a regular income to afford your monthly mortgage payments. If you don't pay, you could risk losing your home.
There are lots of hidden costs involved in buying. You will have to pay various fees and expenses before you move into your home, and will have ongoing costs when the sale is completed. Buying a home can be long and complicated, particularly if you are involved in a chain of people who are trying to buy and sell at the same time.
Making an offer
You don't necessarily have to offer the asking price. Many estate agents will expect lower offers. The offer you make is not necessarily the price you will pay if the sale goes ahead.
You can make an offer verbally or in writing, but it should always say that it is subject to contract. This means that there is still room for negotiation about the conditions of the sale. This will be very important if a survey or homebuyer's report finds problems in the property that would be expensive to repair.
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Getting a valuation
Your lender will send a qualified valuer to assess the value of the property. You won't get a formal mortgage offer until after the valuation. Valuations assess the value of a property, not the condition it is in.
Your lender needs to know that the property is worth at least as much as you are borrowing. This is because if you don't pay your mortgage it may have to repossess your home and sell it to get back the money you have borrowed.
You will have to pay for the valuation. Even if the sale falls through you won't get your money back. If the valuer decides that the property isn't worth the price you have offered you may decide to:
- get the seller to fix any problems before you buy;
- negotiate a lower price;
- withdraw your offer.
Serious problems identified by the valuer may make it more difficult to get a mortgage.
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Getting a survey or homebuyer's report
Many buyers have a survey or homebuyer's report carried out before buying a home. You don't have to have one done, but it gives more information about the condition of the property and any structural problems.
Most surveys and homebuyers' reports will indicate that some repairs are needed. Some repairs are relatively simple and inexpensive, so this doesn't mean that the property isn't worth buying. If expensive repairs are needed, you may be able to:
- get the seller to get the work done, or
- pay less and use the money you save to get the work done after you buy.
Finding a surveyor
If you use someone approved by your lender you may be able to combine the valuation with the survey or homebuyer's report. This works out cheaper because you only pay one set of fees. Fees for surveys and homebuyer's reports are not refundable.
Homebuyer's report or a survey?
There are two types of inspection, which provide different levels of detail about the property. A homebuyer's report is less detailed than a full survey. The report detects visible structural problems and gives an indication of the general condition of the property.
Structural surveys are the most detailed type of inspection. They are more likely to spot hidden problems such as subsidence or dry rot. However, they may not cover plumbing, heating or electrical wiring in much detail. Your surveyor may recommend that a specialist looks at these areas.
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Doing the legal preparation (conveyancing)
Buying a home involves a complicated legal process known as conveyancing to transfer ownership of the property from the seller to the buyer. Most people hire a solicitor. It's possible to do the legal work yourself, but this can be complicated and risky.
The first thing your solicitor will do is contact the seller's solicitor to get a copy of:
- the Land Registry entry;
- the title deeds;
- the lease.
Any problems should be sorted out before contracts are exchanged. This might delay the sale, but is usually much easier than dealing with the problems after you move in.
Agree with the seller any fixtures and fittings to be included in the sale. For example, light fittings, carpets or furniture. These items could be:
- taken away by the seller;
- included in the sale price;
- offered for sale separately.
The seller should provide a detailed list of what is included in the price. Check the list and assume that anything not included will be taken away. If the seller takes away things that were included in the list, you can ask for them to be returned or claim compensation.
You can make a formal complaint if you get poor service from your solicitor or conveyancer. You may be able to get compensation, but will need help from a new solicitor.
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Energy Performance Certificates
All house sellers must provide an Energy Performance Certificate (EPC) free to any prospective buyer before entering into a contract for sale.
The EPC, which is valid for 10 years, is issued by an energy assessor who must be a member of an accredited scheme approved by the Department of Finance and Personnel (DPF).
A certificate is required by law and the penalty for not providing one can be as much as £5000. Find out more about arranging a home energy assessment and getting an Energy Performance Certificate.
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Exchanging contracts and paying a deposit
Before signing the contract check that:
- all the legal documents have been thoroughly checked;
- you have seen or received a copy of the Energy Performance Certificate;
- your survey or homebuyer's report has been done;
- any repairs arranged by the seller before the sale are agreed;
- your mortgage has been formally agreed;
- you have the money to pay the deposit.
Once all the details have been agreed, the contracts are signed and exchanged. The buyer pays a deposit, usually 10% of the sale price. It is sometimes possible to pay a smaller deposit but only if this has been negotiated in advance.
There is no more room for negotiation and neither side can pull out of the deal. You will have to buy, even if the property burns down. The sale will be completed between seven and 28 days after exchange of contracts.
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Completing the sale and moving in
You are the legal owner of a property when:
- the money for the sale is given to the seller;
- you pay any outstanding costs involved in the purchase.
The seller's solicitor will normally give the keys to your new home to your solicitor. However, you may be able to get the keys directly from the seller or the estate agent.
You may need to hire a van to move your possessions into your new home. You may also need furniture, appliances and household items. Save some money for these when working out your budget.
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