Buying a property
Now the fun part can begin – you know how much you can afford to spend on a property, you’ve budgeted for the whole process and you have your support team in place – the search is on!
Step-by-step guide to buying a property in England, Wales and Northern Ireland
- Have a mortgage/decision in principle in place
Once you’ve talked to your mortgage adviser and gone through your budget and aims for a mortgage, you’ll leave with a mortgage (or decision) in principle. This is a confirmation from the lender of how much they will lend to you. It’s a guide for you as to what you can afford and reassurance to a seller that you have the funds available to purchase their property.
- Make an offer through an estate agent
Once you have found a property you like, you will need to make the seller an offer through their estate agent. Make the offer over the phone or in person and follow up with the offer in writing. You can make your offer subject to survey (STS) which means that it might change following a survey that identifies problems requiring work. You can also make your offer subject to contract (STC), which means that the final sale will only take place when lawyers have exchanged legally binding contracts.
If your offer is accepted, ask for this to be confirmed in writing and for the property to be taken off the market straight away. This prevents it from being viewed by other potential buyers who may then make a higher offer (known as gazumping).
- Arrange surveys and secure a solicitor
This stage of the process is all about checking your property – its value, its condition and its paperwork. For the legal aspects, you need a solicitor or licenced conveyancer; and for the practical aspects, you need a surveyor.
All the legal work that happens between an offer being accepted, through the exchange of contracts and then the completion of the sale, is known as conveyancing. Most solicitors offer these services, but its best to work with one that specialises in property, or comes recommended for its conveyancing work.
Solicitors, or conveyancers, complete all the legal tasks related to the purchase or sale of a property. They draw up and assess contracts, provide legal advice, deal with the Land Registry, sort out payment of Stamp Duty and oversee the transfer of cash to buy a house. They also conduct searches on properties to make sure there are no planning or local issues that might affect the value of the property.
Surveyors help you find out about the condition of your property and, if they identify any problems, give you the evidence you need to re-negotiate the sale price or ask the seller to fix the issues prior to the sale. Most surveyors offer four different kinds of survey: a mortgage valuation survey, a condition report, a HomeBuyers report and a building survey. The HomeBuyers report tends to be the standard as it looks at both value and condition.
Mortgage valuation survey – This is normally required by the lender to check that the property is worth what you are proposing to pay for it. They will request it and you will pay for it, but some mortgage deals offer a free valuation survey. This survey won’t tell you anything about the condition of the property, just what it is currently worth.
Condition report – This is the most basic ‘full’ survey. It gives an overview of the property’s condition and highlights significant issues but doesn’t go into any detail or offer any guidance on how to address issues. This is generally suitable for relatively new properties.
HomeBuyers report – This is a good halfway house between a simple condition report and a thorough building survey. It highlights any major problems and gives advice on repairs and maintenance. However, it only looks at the surface condition of the property – no lifting floorboards or moving furniture is involved. This is a good choice for properties in reasonable condition.
Building survey – This is the most thorough survey there is and provides a comprehensive analysis of the structure and condition of the property. It lists defects and looks at recommended repairs and how much they might cost. It will look at every aspect of the property, not just what’s on the surface. This is most suited to properties that are more than 50 years old or in poor condition.
- Finalise the offer and mortgage
Once the survey is complete you may choose to go back and renegotiate the price with the seller. This may be because the property valuation is lower than the price you have agreed to pay, leaving you with a shortfall. Or it could be because the survey revealed problems that are expensive to fix.
You now need to make your full mortgage application, see the Applying for a mortgage section for a full breakdown of this process.
It’s this stage in the process that can be quite stressful and it’s where using a mortgage advisor becomes most valuable. Your advisor will handle the communication between the mortgage lender, the solicitor and the estate agent, taking the stress away from you. However, there are sometimes unavoidable obstacles that may set you back – a seller could withdraw their property from the market or accept a higher bid from another buyer.
- Exchange contracts
Once surveys are complete, the mortgage approved and contracts have been negotiated, you will be able to exchange contracts. This is the swapping of signed contracts between the solicitors representing the buyer and the seller. You will probably have to pay a holding deposit on the property at this stage. Exchanging contracts means that you are now committed to the sale and no-one can back out of the deal.
This is a good time to make sure you have insurance arranged for your new home. See our section on Protecting your income and your home for more information.
- Completion and final steps
The last steps in buying your home are to complete the sale. Completion is when you pay the seller the remaining money (via your mortgage lender) to buy the property. You will usually agree on a completion date when you exchange contracts; it’s also the date you’ll take ownership of your property if funds are transferred without any problems. If you are using a mortgage advisor, they will be working to make sure everything is in place and your completion goes without a hitch.
There are several payments to make at this stage of a property purchase. You will be charged for the transfer of money from your solicitor’s account to that of the sellers and most likely for further administration charges on your mortgage account. Your solicitor will handle and then charge you for registering your property at the Land Registry and paying Stamp Duty. See our Money timeline for a more detailed breakdown.
Step-by-step guide to buying a property in Scotland
- Have a mortgage decision in principle in place
Once you’ve talked to your mortgage adviser and gone through your budget and aims for a mortgage, you’ll leave with a mortgage in principle. This is a confirmation from the lender of how much they will lend to you. It’s a guide for you as to what you can afford and reassurance to a seller that you have the funds available to purchase their property. It is advisable to have proof of how much you can spend before you put in an offer on a property in Scotland.
- Research your property
When you have found a property you like, you will need to find out as much as you can about it before you put in an offer. The sellers Home Report is the best place to start.
Anyone putting a property on the market must have commissioned a Home Report first. This sets out all the key information about the property. The only exceptions to the rule are new builds, converted properties and Right to Buy houses. The Home Report includes the following:
Survey – an assessment of the condition of the house, what repairs are needed and a valuation of the property.
Energy Performance Certificate – detailing how energy efficient the property is and what could be done to make it more efficient.
Property questionnaire – giving information such as what council tax band the property falls into, any history of flooding, available parking, what improvements have been carried out by the sellers and details such as the utility suppliers.
Most offers in Scotland are made unconditionally so it pays to find out as much as possible about a property first. If the Home Report has flagged any areas of concern, it may be worth considering commissioning a further detailed survey into these areas. However, there is a risk that you will commission a survey and then not win the bid on the house.
- Make an offer
If you see a property you like, your solicitor will register a notice of interest on your behalf. This means that you will be kept up-to-date on anything relating to the sale of the property, such as when a closing date is set. Properties in Scotland are usually marketed as ‘offers over’ or fixed price and the process is usually for interested parties to register their interest with the seller’s solicitor.
It may be possible to make an offer on the property through your solicitor and agree on a price with the seller quickly. However, if there is a lot of interest in the property the seller is likely to set a closing date. All interested buyers are required to submit a sealed bid before the closing date. The seller will then review all the offers received and decide who they will sell to.
If your offer is accepted, the seller’s solicitor issues a qualified acceptance, which means that the property will be yours if contract details can be worked out. The solicitor will also hand over information about the property such as the title deeds and any planning papers.
Go through everything you receive with your solicitor as they may raise queries about the paperwork. Neither you nor the seller is committed yet.
- Agree the contract
Contracts and queries about the contracts will now go back and forth between solicitors. The two solicitors exchange letters, known as ‘missives’, where both parties negotiate on the terms of sale. Once all the terms have been agreed, this is the ‘conclusion of missives’, and the purchase becomes a binding contract. Both parties are now legally committed to the sale.
No money is paid at this stage unless it’s a new-build property, in which case a deposit may be required. Your solicitor will check the title deeds and talk you through any ‘title burdens’ – conditions attached to owning the property ranging from where you can park to more serious restrictions on how the property can be used and altered.
Solicitors and searches
Solicitors, or conveyancers, complete all the legal tasks relevant to the purchase of a property. They make offers for property on your behalf, draw up and assess contracts, provide legal advice, deal with the Land Registry, sort out payment of Lands and Buildings Transaction Tax and oversee the transfer of cash to buy a house. They also conduct searches on properties to make sure there are no planning or local issues that might affect the value of the property. They can do this before you make an offer, although some solicitors will charge for these regardless of whether you are successful in your bid or not.
- Completion of the mortgage and the sale
If everything has gone to plan, your mortgage advisor will contact the lender and finalise the mortgage. You will also transfer your deposit funds to your solicitor a few days in advance of the sale.
On the date of entry that has been agreed in the contract, your lender transfers the mortgage amount to your solicitor. The solicitor then pays the whole of the purchase price to the seller’s solicitor, and you’ll be given the keys to the property and the ‘disposition’ document transferring ownership to you. This is known as ‘completion’ of the purchase.
There are several payments to make at this stage of a property purchase. You will be charged for the transfer of money from your solicitor’s account to that of the sellers and possibly for further administration charges on your mortgage account. Your solicitor will handle and then charge you for registering your property at the Register of Scotland and paying Lands and Buildings Transaction Tax. See our Money timeline – Scotland for a more detailed breakdown.
What do estate agents do?
Estate agents market and sell properties. They will also help you find a property if you discuss what you are looking for. They are a useful source of information about the local property market and the types of property that come on to the market. As well as selling and negotiating with buyers, they follow up on paperwork, keep tabs on the chain of sale (who’s sold and is moving and whether there are any hold ups) and work with solicitors to make sure sales complete.
Top Rated Mortgage Advice
When you are ready to take the next step on your home buying journey, we have friendly advisors ready to take you through the whole process, step by step. Find your nearest branch here, or call us on 0345 603 1525.
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Property Law Centre
First Mortgage offers a dedicated conveyancing service through our partner organisation Property Law Centre. Their advisors will appoint a specialist solicitor from a carefully selected panel of legal firms who will then manage the legal process for you, working closely with your First Mortgage advisor. They work for a fixed fee, agreed before you buy your house. There are no hidden costs and the fee does not change even if there was more work than anticipated in the purchase of your property. As part of the service, you will have access to real-time tracking, allowing you to see updates on the progress of your property purchase.
Speak to you First Mortgage Advisor about the Property Law Centre and they will arrange for a solicitor to get in touch.