Buying a property and moving in is definitely up there on the list of life’s most stressful events. Anything you can do to make the process run smoothly is good news. Here are the main steps to follow.
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Obtain a mortgage offer in principle
Ideally, this should be done before you start looking for a home. That’s because it gives you an idea of how much you can afford. It also establishes you as a more serious home purchaser with estate agents you contact. If you haven’t obtained an offer-in-principle yet, do it now.
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Find a solicitor
The moment you make an offer and it is accepted, you need to tell the estate agent who your solicitor is, so that he or she can pass the details to the vendor’s own lawyers. Find a lawyer before you make the offer, or straight after. Always get a quote from several before choosing one. Make sure you are comparing like with like: does the quote include search fees, VAT, phone calls, letters and postage, or bank transfer fees?
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Find a house and make a bid
Offer what you think the property is worth. Make the offer subject to a survey of the property. If the price is marginally above a stamp duty cut-off point, offer slightly below this amount to save money. Where necessary, exclude the cost of carpets, curtains and other fixtures from the purchase price to do this.
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| Stamp duty | | | up to £60,000 | nil | | £60,001 to £250,000 | 1% | | £250,001 to £500,000 | 3% | | £500,001 and above | 4% |
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Contact lender and arrange survey
Once you have had an offer accepted, you need to finalise details with your lender and organise a survey. There are three main types of survey:
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- The lender will demand a Mortgage Valuation. You pay for this, but it is commissioned by the lender. It’s a brief report on the property you plan to buy, basically telling the lender whether or not it is worth the money you have offered.
- It’s highly advisable to commission your own survey, known as a Homebuyer’s Report. This is likely to cost several hundred pounds, but it’s much more detailed than the valuation and it’s a direct contract between you and the surveyor. This should pick up any problems that might lead you to lower the offer you’ve made on the property. You can ask the lender’s surveyor to make a homebuyer’s report at the same time he or she does the valuation. Or you can commission an independent surveyor.
- For those buying an older property, the top-notch Structural Survey may be useful. These are expensive (often more than £1,000) but they will include full details of all visible parts of the house, and highlight defects.
- All surveyors only look at visible things - they don’t lift carpets, for example- so you may well move into your new home and find things that have not been picked up.
- Some surveyors in ‘hot spots’ such as London will value property at less than its market price. This is a problem for you if you are borrowing a high percentage of the cost of the property, because the lender will go on the surveyor’s valuation - not what you have paid in the real market. You may end up losing the property, or being asked to pay a high lending fee (also known as a mortgage indemnity guarantee).
- Government proposals for Homesellers Packs could change the way surveys are organised. The aim is to shift responsibility for gathering information and getting a survey done from the buyer to the seller, and thereby speed up the buying process. The target introduction date is January 2003.
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Exchange contracts/complete
The standard gap between exchanging contracts and completion is 30 days, but it can be longer or shorter. You can ask your solicitor to put a clause into the contract stipulating a time limit. Points to check include the following:
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- Make sure that all the legal paperwork is properly sorted. Don’t be afraid to ask about any point you don’t understand. If you have paid a deposit (usually between 5 and 10 per cent) you will lose it if you pull out after exchange.
- Make triply sure the funds are ready to be paid by your lender into the vendor’s account, via your solicitor. Failure to do so means you won’t be able to move in. · You are now ready to move into your house. You should already have hired a removal firm. Be sure to compare prices and make sure your chosen firm is insured if anything is lost or broken.
- Contact electricity, gas, water and phone companies to let them know you are moving to a new address - give meter readings for both the old and new address. Now is the time to decide who you want to supply your energy, water and phone needs at your new address.
- Completion will take place when all legal questions have been agreed and the cash has been passed on to the seller from your lender, via your own and his/her solicitor.
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