The first thing is to decide your budget. Are you looking to buy for cash or will you need a mortgage? Remember when buying off-plan, these need to be cash purchases as you can't get a mortgage for something that isn't built yet. Mortgages are based on your earnings and assets, so you will need to ensure you have enough income to cover the payments on a mortgage. You will also need to ensure you have agreed your mortgage with the bank before putting an offer in on a property.
It is also important to remember the Stamp Duty (tax) you will need to pay, as well as legal fees, when you are looking at house prices. You can use the HMRC (UK Tax office) Stamp duty calculator to work out the additional tax you will pay. Legal fees will be around £500+vat for a small studio through to £1500+vat for a £1.5 million house (these figures are indicative only. Different solicitors charge different fees and you should always shop around for a quote you are comfortable with).
You will also need to include surveyors fees if you are looking to buy a building that is more than 10 years old and doesn't have a New Build insurance in place.
Once you have found the property you wish to purchase you will need to make an offer. It is important to remember that the asking price is indicative and in most cases a strong offer up to 5% below asking price will generally be accepted.
Always find out what is included in the selling price and use this as part of the negotiation. Rather than a discount, you can always negotiate furniture or fittings to be included as part of the agreement.
If you are buying with a mortgage, you will need to have an in principle agreement with the bank for the amount you are offering before you put an offer in.
Also think of timescales. If someone is a motivated seller and wants to move quickly, you will get a better price by being able to move quickly yourselves.
Once your offer is accepted, it is time to arrange your solicitor. It is always worth shopping around for a good quote but typically you will pay between £500 - £1500+vat for a normal purchase. Your solicitor will deal with all legal aspects of the purchase including liaising with the sellers solicitor, arranging all searches, and exchanging and completing the purchase for you. Your estate agent will be able to recommend solicitors to you if you need, but make sure they are not receiving a commission from this, as it can influence their recommendation. At Imperial Dragon Property, we do not receive any commissions from companies we recommend. The recommendations are based on feedback from previous clients experiences of the companies.
If the building is over 10 years old and doesn't come with a new build insurance guarantee, we always recommend using a surveyor to check out the property. There are two types of surveys available: the Homebuyers basic package (this is suitable for most properties) or the Full Structural package (much more in detail, suitable if you are looking to make structural changes to the property or it is very old). The surveyors report will feedback all the information about the property build, its history as well as any problems they encounter. They will also verify what they believe the current value is, taking into account any works that will be required to bring the property up to legal standard.
Surveyor costs vary but expect to pay £400+vat for a 2 bed apartment through to £1000+vat for a 5 bed detached house for the homebuyers package. Add another £300 on for the full structural (prices are indicative only).
So you have chosen your property and put your offer in and it has been accepted. You have appointed your solicitor and had the survey completed... what next?
Based on the survey you will either confirm your original offer, or make a new offer based on these findings. If you are buying with a mortgage, then the mortgage company will have been and verified how much they value the property at and what they are willing to lend you.
You now need your solicitor to confirm the exchange and completion dates for the purchase. Remember that until you exchange, the seller can walk away from your offer without any compensation to you for the money you have spent to get this far.
On exchange, where you will pay 10% of the asking price, the seller is legally obliged to sell to you and will incur your costs if they walk away from the deal. If you walk away at this point, you will lose your 10% deposit on the property.
Make sure you have gone through all the paperwork with your solicitors and everything is agreed and confirmed to what is being included in the sale and what fixtures and fittings are being left behind as part of the sale.
Completion normally happens within 2 weeks of the exchange, but there is nothing stopping this happening sooner, even on the same day as exchange.
On completion, your solicitor must have received the full outstanding money for the property including their fees as cleared into their bank. There are often penalties if a completion date has to be moved because you haven't allowed enough time for money to clear (always allow 5 full business days).
On the completion day, the completion generally happens by 1pm at which point you become the legal owner of the property. A lot of people move out on the morning of completion, so there isn't time for proper cleaning to take place, so you may want to factor that in to your move schedule or just accept a proper clean won't happen until you are moved in. At 1 pm you will normally pick up the keys and all legal documents for the property from either the solicitor or the estate agent managing the sale.
You are now free to move into your new home.
Don't forget to allow plenty of time to book your removal as you will get a cheaper price based on the timescale given and weekdays are cheaper than weekends. Don't forget to move your service and utility providers (many require 30 days notice to move you) and ensure you remember to transfer things like TV licence across to the new property and arrange building and contents insurance from the first day you are moving in.
The above is a basic guide to help you understand what to expect during the purchasing period with some costs to provide indication of what to expect. The average purchase, exchange and completion of a property is 5 - 8 weeks unless it is new build. Imperial Dragon's tailored service will provide more specific and factual information on an individual client basis.