Once you’ve found a home you want to buy, then you need to make an offer. Call the negotiator you have been dealing with, but if they are not available, please ensure that you explain to another member of staff that you are calling to make an offer. That way, in this fast paced market, you will not lose out if someone else comes along first.
You will need to be financial checked, to ensure that your offer can be put forward to the vendor in good faith, so that they know you are able to get the finance you need if a mortgage is required or that the cash you are hoping to buy with is definitely available. Acting on behalf of the vendor means that we MUST be sure you can pay what you are offering to pay for the property, or we are negligent in our duties to our client.
At this stage any agreed offer will be ‘subject to survey and contract’ which means you can withdraw from the transaction if problems arise from the survey or contract, of course, it also means that the property vendor can change their mind and withdraw from the sale.
Once your offer has been accepted by the vendor (seller) the sales process begins:
- You may have to pay a booking fee or other fee to reserve the mortgage product you want. This usually applies for limited-period deals. Typical cost: £99-£250.
- There is often a fee – usually called an arrangement fee – to set up the mortgage. In many cases this can be added to your mortgage, but if you choose this option bear in mind you’ll pay interest on it. Typical cost: £0-£2,000. The mortgage valuation fee pays for another survey on behalf of the lender to check the property is worth the mortgage amount. The cost depends on the property value and the lender. Your mortgage lender may get the valuation from your survey. Typical cost: £150-£1,500, depending on value of property.
- There is the option to upgrade your survey to a ‘homebuyers report’ or ‘full structural survey’ – explained in more detail in the next section.
You will need to hire a solicitor to complete the legal paperwork for you.
- Your solicitor or licensed conveyancer will submit searches to the local council to check whether there are any planning or local issues that might affect the property’s value. They will also instruct a drains search. Although most solicitors request payment for their work after completion they might ask you to pay a deposit for searches up front. Typical cost: £250-£300.
- Sewell & Gardner recommend a local solicitor called Archer Rusby, but you are at liberty to chose whomever you wish to. Please bear in mind, however, that the cheaper conveyancers will usually take longer to process your sale for you and delays can disrupt the ‘chain’ or even lead to vendors withdrawing in favour of a faster transaction.
It’s advisable that you get a survey done on the property you’re buying and it will be mandatory if you are borrowing against the property. The survey will highlight any structural problems such as subsidence or damp. There are three types of survey:
- Home condition survey – this is the most basic and cheapest survey. Suitable for new-build and conventional homes. Typical cost: £250.
- Homebuyer’s report – this is a much more detailed survey, looking thoroughly inside and outside a property. It also includes a valuation. If you are choosing this option, you should see if you can get the valuation and homebuyer’s report done at the same time to cut costs. Typical cost: £400+.
- Building or structural survey – this is the most comprehensive survey and is done for an older or non-standard property (for example, if it’s made of timber). Typical cost: £700+.
Often the survey is tied in with the mortgage product you have chosen, so please ensure that you get your mortgage paperwork completed and back to your financial adviser, along with any survey payment or booking fee required, so that this process happens as quickly as possible.
This part of the process is often seen by the vendor (seller) as a good sign that you are serious and keen to proceed quickly.
- If there are no problems or delays, then at some point during this period you will sign and ‘exchange contracts’ with the seller.
- Once you have exchanged contracts you will have to pay a deposit typically 10% of the price of the home. At this stage both parties are committed to the sale. If you pull out after you have exchanged contracts you will lose the deposit.
- With some schemes you pay 5%, you can read about the government ‘Help to Buy’ scheme here.
Once you’ve bought your home, known as completion, you will have to pay several bills:
- The remaining money owed to buy the property (usually 90%) is now transferred from your mortgage lender to your solicitor’s account and then on to the seller’s solicitor’s account. This might include a higher lending charge, depending on how much you are borrowing in relation to your deposit size. In some cases it may also include a mortgage account fee of £100-300. If you don’t have a mortgage and are a cash buyer you’ll need to pay the rest of the purchase price via your solicitor.
- You’ll need to pay any removal fees if you’re using a removal company. Typical cost: £600-£1000+.
- You’ll need to pay your solicitor’s bill at this stage, minus any deposit you’ve already paid. Typical cost: £450-£900 + 20% VAT.
- Buyers also need to pay Stamp Duty (official name Stamp Duty Land Tax) on completion and your solicitor will arrange this for you. Cost: £0 to 7% of the price you’re buying the home for:
- £0 to £125,000 = 0%;
- £125,000 to £250,000 = 1%;
- £250,000 to £500,000 = 3%;
- £500,000 to £1,000,000 = 4%;
- £1,000,000 to £2,000,000 = 5%;
- £2,000,000++ = 7%
- £0 to £125,000 = 0%;
- If you are also selling your property will need to settle the agency fee on completion – typically paid by your solicitor out of your sale proceeds. How much this will be depends on the fee or percentage of purchase prices agreed when the property was marketed for sale, but it’s usually 1.5-2% of the sale price – plus VAT of 20%.
On moving day you will wait for ‘key release’ which usually happens just after lunch. Then you can come and collect the keys to your new home and we will be delighted to see you!