Buyers

Six Steps

1. Finding a property you can afford

Before you start house-hunting, it is a good idea to work out the amount you can afford to spend on buying a property and on your monthly mortgage payments. There are many mortgage affordability calculators online which can give you an estimate of how much you can borrow based on your income and outgoings.

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Think about Costs
Consider how you will cope if your financial situation changes, or interest rates rises, and be careful not to overstretch yourself. Your savings will have to cover not just the deposit but expenses such as mortgage fees (anything up to £2000) and Stamp Duty on properties costing more than £125,000. Before you fall for your dream home, make sure you understand the cost of buying property.

Choosing the right mortgage
It’s never too early for you to start thinking about arranging a mortgage as this can be time-consuming. You can get a mortgage from an Independent Adviser (IFA), mortgage broker or lender. VA has a panel of IFA’s who we can recommend for great advice and a whole of market deals. Ask a member of the VA Team.

Once you’ve found a mortgage, agree a mortgage “in principle” (MIP). This tells you how much money the lender is likely to offer and the interest rate you will pay.

You may have to pay a booking fee to reserve the mortgage product you want. Typical cost: £99-£300.

Check your credit report
Before you apply for a mortgage check your credit report for any errors and to get an idea of your score as lenders will look at it when making their decision on your application.

2. View Properties & Make an Offer

market every week so be sure to register your details so that you are the first to view new instructions. Once you have found a home you want to buy, the next step is to make an offer through VA Property Consultant. We will pass your offer to the seller and begin to negotiate on your behalf until the offer is accepted.

3. Organise a Solicitor & Surveyor

A solicitor will handle the legal work around the property (conveyancing) and the surveyor will survey the property to check the problems, which might impact on the cost of the home.
Your solicitor will tell you how much you can expect to pay and may ask for a deposit upfront – this typically 10% of their fee.
Typical cost: £250 - £300

VA has a panel of solicitors who we can recommend for great service and advice. Ask a member of the VA Team.

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Valuation Survey
This is carried out by the lender to make sure the property is worth the price you are paying before they approve the mortgage. It is not an extensive survey and will not identify all the repairs or maintenance that might be needed. Typical cost: £150-£1500 depending on the valuation of the property. Some lenders may not charge you for this, depending on the type of mortgage product you select.

The Types of Property Survey
You should commission a survey on the property to help you avoid hidden costly problems further down the line. For example, if the survey reveals a problem with the home that will need £5000 to pay for repairs, you could ask the seller to lower the price by that much.

Home condition survey: this is the most basic and cheapest survey. Typical cost: £250+ Homebuyer’s report: this is a more detailed survey, looking thoroughly inside and outside a property. It also includes a valuation. Typical cost: £400+

Building or structural survey: this is the most comprehensive survey. Typical cost: £600+

4. Finalising The Offer And Mortgage

Once the survey is complete you may want to go back and renegotiate the price of your home. There are two reasons for this:

• The lender may value the property at a lower price leaving you with a shortfall, meaning you will not be able to match the asking price or what you originally intend to offer
• Your survey may uncover problems with the property that will be expensive to fix. You can use this information to ask for a reduction in price

• The seller withdraws the property from the market
• The seller accepts a higher offer from another buyer (known as “gazumping”)
• Your mortgage application is rejected

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Finalising Your Mortgage
If everything has gone according to plan, contact your lender or mortgage adviser to proceed. There is often a fee, usually called an arrangement fee to set up the mortgage.

5. Exchanging Contracts

If there are no problems or delays, then you should receive the contract to sign and complete the sale. Before signing the contract, go through it with your solicitor to check that all the details are correct. Make sure you are happy with what the sellers have agreed to leave in the property and that all your queries have been answered.

At this stage, you and the seller are committed to the sale. You are usually required to pay a holding deposit at this stage to show serious intent.

Once you have changed contracts you will need buildings insurance in place to cover the structure of the property.

6. Completion And Final Steps

There is typically a four week deadline between exchange of contracts and completion of the sale but both the buyer and seller can agree to a different time frame. Once the sale is completed you will have to pay a number of charges:

• The remaining money owned to buy the property is now transferred from your solicitor’s account to the seller’s solicitor’s account.
• You may also have to pay a mortgage account fee. This fee is charged by the lender for setting up, maintaining and closing down your mortgage account.
• You will now need to pay your solicitor’s bill (minus the deposit and local searches if you have already paid them).
  Typical cost: £500 - £1500 plus VAT.
• Your solicitor will register the sale with the Land Registry for properties in England and Wales.

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Stamp Duty Land Tax
If your property costs over £125,000 you have 30 days from the completion date to pay Stamp Duty. Your solicitor will arrange this for you.

• Up to £125,000 – 0%
• Over £125,000 to £250,000 – 2%
• Over £250,000 to £925,000 – 5%
• Over £925,000 to £1,500,00 – 10%
• Over £1,500,000 - 12%

• Be clear on your maximum budget but do not be afraid to shop around for properties a little more (you can offer lower than the asking price and negotiate)
• Register your details with us so that we can contact you as soon as new properties come on the market (the best properties do not always make it to market)
• Ask to speak to our recommended Financial Advisors, solicitors and surveyors (often we have exclusive deals just for our clients)
• If you are using a removal company, consider moving on a weekday (as it is usually cheaper than the weekend!)