BUYING A HOME – THE TIMELINE
Buying a home can be a stressful process but having a little understanding will make the ride much smoother. This, slightly longer than usual article, will help you know what to expect and when.
How long will the buying process take?
A typical purchase should take around 8-12 weeks to complete. A not so typical purchase can be completed in as little as 4 weeks or drag on to around an eye-watering 8 months. The most common factors that impact the timeline are client circumstances, arising legal problems and/or issues relating to funding.
MILESTONE 1: OFFER ACCEPTED / SALE AGREED
Your offer has been accepted and the SOLD sign is going up! It’s time to do a mini-dance!
But don’t get carried away, there’s still a lot to do and nobody is contractually obliged. Straight after the offer is accepted you need to apply for your mortgage and instruct a solicitor (conveyancer).
MILESTONE 2: FORMALLY APPLY FOR YOUR MORTGAGE
You should already have a Decision in Principle from a lender, if you don’t then it’s unlikely your offer will have been accepted.
You will need to submit a formal mortgage application within a few days of having your offered accepted.
The process differs from lender to lender and whether you are using an advisor. Make sure you have bank statements, pay slips and other information relating to your income/outgoings as the Lender may request these.
MILESTONE 3: INSTRUCT A SOLICITOR (CONVEYANCER)
Often done simultaneously with the mortgage application, you will have to find a solicitor that can handle the legal work.
Conveyancing is the legal process that transfers property from one person to another. The conveyancer you choose will handle the legal paperwork, land registry, local searches, contract and the exchange of money.
MILESTONE 4: SURVEY
There are various types of property surveys and being clear about the differences is important.
The mortgage lender will likely carry out a mortgage valuation, a basic valuation to assure itself it’s happy to lend. But beware, a mortgage valuation is NOT a survey.
If you are looking for something a bit more in-depth you should book a Condition Report, Homebuyer Report or Structural Survey.
• Condition Report
Condition reports are new and were introduced in 2011. It is the cheapest option and usually costs between £100 and about £250 depending on a number of factors including the property’s size.
Designed for newer properties and conventional homes, it provides a clear and concise report on the condition of the property, plus details of urgent faults and advice for legal advisors.
• Homebuyer Report
If a condition report sounds a bit too risky for your liking, the slightly more expensive homebuyer report, which does provide a market valuation and an estimate of the insurance rebuild cost, as well as all the information offered by a condition report, will offer greater peace of mind.
It costs between about £250 and £400 and includes advice on defects that may affect the value of the property due to repairs and ongoing maintenance, making it a good choice if you have some concerns about the state of the property and how much any problems could cost to fix further down the line.
• Structural Survey
If you have reason to be particularly worried about the structure of the building or are buying a period property, however, then it is probably best to go for a full structural survey.
It includes information on defects and repair and maintenance options and is also essential if you are buying a larger property or are planning to carry out major works.
As with the other two types of survey, costs will vary depending on the size of the property and where it is. However, you can expect to pay around £1,000 for a survey of this kind. This may sound steep, but it can be well worth paying if it identifies issues which could cost thousands to put right.
Survey Explanation Source – Money Supermarket
MILESTONE 5: DRAFT CONTRACTS & SEARCHES
By this point, you will have instructed your conveyancer and your lender will be reviewing your mortgage application.
Upon receipt of the draft contracts (provided by the sellers' solicitor) your conveyancer will be in a position to review the draft contracts and file for local searches. Price will vary based on location.
Some searches are optional but it’s advisable to get as many as your solicitor thinks is necessary.
Local authority searches
A local authority search will provide you with detailed information about your property and the surrounding areas. This will give you peace of mind before going ahead with the purchase of your new home and ensure you avoid any nasty surprises in the future.
There are two parts to a local authority search, a LLC1 result and a CON29 result.
The LLC1 results will tell you the following information about your property:
• If your property is a listed building
• Located in a conservation area
• Situated in a tree preservation order area
• Need an improvement or renovation grant
• In a smoke control area
Any future development plans that could affect your property are assessed by CON29. The CON29 results are broken down into two different parts (required and optional). The required results will reveal:
• Proposals for new roads or traffic schemes
• Contaminated land
• Planning decisions affecting your property
• Building regulations
• If your property is in a Radon affected area
From time to time, additional information may be required using the CON29 form. Examples include road proposals by private bodies, completion notices, land maintenance notices and environmental and pollution notice. CON29 works to assess any changes that could be made in the near future that may affect your property.
Drainage searches (approx £35).
It is also recommended for first-time buyers to apply to the local water company responsible for the property asking for confirmation that the sewers, drains and piping are maintained by them. A water and drainage search carried out by your conveyancer will also highlight the proximity of the property to public sewers and whether the property has a sewer running within the boundaries of the property.
Environmental Search (approx £30).
An environmental search identifies whether the previous land use of the property creates a potential environmental risk or is risk-free. This type of search will highlight issues including:
Contaminated land due to historic landfills and waste sites
The risk of flooding from nearby rivers or seas
In certain cases, your conveyancer may recommend carrying out the following non-routine searches, depending on the location of the property.
Explanation Source – Really Moving
Each case can differ in its early progression and sometimes the legal process may progress quicker than a mortgage application.
MILESTONE 6: MORTGAGE OFFER
Another time for a celebration, your lender has confirmed they are happy to lend you the funds to complete the purchase.
Make sure you read through your formal offer and mortgage illustration carefully, cross-reference to make sure there are no discrepancies, if there are, inform your broker or lender immediately. Something as small as a spelling mistake can cause delay.
MILESTONE 7: ARRANGE BUILDINGS INSURANCE
Just before the exchange of contracts, you want to make sure you have buildings insurance in place. Once contracts are exchanged you are legally bound to buy the property so it’s better to be safe than sorry.
You can find a rebuild value on a mortgage valuation report, which is often required when sourcing buildings insurance.
MILESTONE 8: ORGANISE A COMPLETION DATE
Once you solicitor is satisfied with the search results, they will contact you to ask preferable dates for completion (the day the keys are handed over).
Of course, this is a date that needs to suit you, the sellers and potentially others in the chain. Try to be as flexible as you can here, offer multiple options, avoid booking holidays that may clash and forewarn employers.
Most buyers/sellers opt for Friday’s to allow the weekend for moving.
MILESTONE 9: PAY YOUR DEPOSIT MONEY
Your solicitor may not give you forewarning so make sure you are ready to transfer your deposit quickly.
Most banks have a transaction limit of £10,000 per day, so make sure you prepared.
Upon receipt of the funds, your solicitor will ask you to sign your contract in anticipation of exchange.
MILESTONE 10: EXCHANGE
Now you really can celebrate!
There is a legally binding contract between the buyer and seller. After exchanging you cannot pull-out without forfeiting your deposit money. On a positive note, neither can the seller.
Following on from exchange there are a series of short tasks that you will liaise with your solicitor over:
• Receiving your completion statement – A full breakdown of the money you need to give to your solicitor.
• Your solicitor will carry out further searches to make sure the seller still owns the home – check the seller still owns the property or you haven’t been made bankrupt since your mortgage offer.
• You need to sign your transfer deed – Some buyers won’t need to sign this.
• Your solicitor draws down the funds from your lender – This gives time for the money to clear into the solicitors account ahead of completion.
• Paying for the house - Your solicitor will transfer the money to the seller’s solicitor and in return will receive their title deed and proof the seller’s mortgage has been cleared.
MILESTONE 11: COMPLETION
Congratulations! You now get the keys to your new home, now the hard work really starts!!
Following completion, there are still a few loose ends that need tying up by the solicitor.
• If applicable, stamp duty needs to be paid (done by your solicitor)
• Your solicitor will officially register your details with the Land Registry
• And finally, you will receive your title deeds.
When buying or selling property in the UK, it’s difficult to accurately predict a timeline from sale agreed to completion. This understandably can cause frustration for some. The process isn’t a precise step by step process, and there are many moving parts from unseen property defects to the speed in which a solicitor will return correspondence.
The one piece of advice we would give to most people during this process is to stay FLEXIBLE.
Matt Housley - Residential Sales
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