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House buying-process

What is the house buying process?

The process of buying a property for the first time or even second or third time can be exciting but also very stressful. The system is not a great one in England and Wales (Scotland is better) as chains can build up, people become edgy and frustrated and they can collapse, and people can loose money.

As a first time buyer you are in a very strong position. Typically a property transaction involves a long and lengthy chain. First time buyer’s don’t have anywhere to sell, will typically have money in the bank, and normally are ready to move quickly. Therefore first tiem buyers can help speed up the property transaction. Every sellers is happy to have a first time buyer buying their property as they know they can sell their property with less hassle.

*So how do you exactly buy a property? What is the house buying process from start to finish? Read below for our own first time home buyer’s summary of the house buying process.

In this guide

  1. Sort out your finances
    You can’t buy a house if your finances are a mess and you don’t have a deposit or any savings. Well in theory you can but it will end up more expensive as the cost of the interest on any loan for a 100%, or even, a 110% mortgage will be much higher. Try and save as early as possible say for six months before you want to buy, by cutting down your expenditure, stay in one night at the weekend, take in packed lunches to work and start to save.
    At the same time look to improve your credit rating. You can do this quite easily by changing your attitude to your credit. Are you late paying your credit card? are you always overdrawn? Are you on the electoral role? By addressing these issues you can improve your credit score and by doing this increase the chance of being accepted for a wider choice of mrotgages.
    Click here to find out how you can get your own credit report and tips for increasing your credit score. If you can stay in for one night every weekend you could save upwards of £100 a month, that could help with legal fees, a new sofa and chairs or even a holiday once you’ve moved in!
  2. Do your research
    First time buyers are understandably both daunted and excited by the house buying process. Many people get too carried away and simply jump head first into buying a property without doing any proper research, which when considering the amount of money you are going to spend is very risky. Would you buy a car or book a holiday without reading about it first? Therefore we believe doing your property research is very important.
    It is not only the property you need to research but the area, your neighbours and also you need to understand your motives and future plans. As a first time buyer ask yourself, Where do you want to live? Why do you want to live there? How much is property in the area? What is the housing market doing? Can i afford the property I want? Is this still an area you will want to live in 5 years time? What are the transport links, the crime, the schools and the local facilities like?

    By being honest and thorough you can save yourself a lot of time and money and also avoid expensive mistakes. Read more in our Before you buy section of our in depth exclusive House buying guide.

  3. How much can you borrow?
    There are over 8,500 mortgages from over 100 lenders. For first time buyers, mortgages can seem confusing, however in essence there is so much choice as there are many products tailored to different individuals needs. There are a variety of specialist first time buyer mortgage products including shared ownership, 100% mortgages and more typical standard mortgage products.
    The main method though of getting the most competitive mortgage deal simply comes down to how much deposit you can raise. For a first time buyer a 10% deposit will give you a wider access to the best mortgage deals, a 5% deposit reduces the amount of cheap mortgage deals open to you and may mean you having to pay a slightly higher APR, and 100% mortgages end up much more expensive. You will start to hear phrases like LTV – loan to value, fixed, capped, discount, offset mortgages and much more. In order to help you we’ve put together our own guide to house buying jargon
    Try and learn about mortgages, speak to a broker or lender and get an idea of how much you can borrow. Then once you have decided which mortgage and lender suits you best apply for a mortgage with them and get your offer in principle. This is needed when you are serious about making an offer for a property. An estate agent will typically not take your offer as seriously if you do not already have a mortgage offer agreed.
  4. Find a property
    You are just about to spend hundreds of thousands of punds on a property, therefore be smart, take it seriously and get prepared to give 100% to finding your first property. When you go and view properties make notes, ask the right questions, pay attention to the neighbourhood, look for small details, go beyond the décor and look at the structure of the property.
    Also be honest and open with yourself. Can you see yourself living here for the next 5 years? Is this property too much here and now? Before you view a property and meet estate agents, read our in depth guide and tips for dealing with Estate Agents and Viewings from our exclusive House buying guide.
  5. Make an offer. Appoint a Solicitor
    When an offer on a property has been accepted, the seller’s estate agent will need your solicitor’s details. Your solicitor handles all legal aspects of purchasing a property, this is known as conveyancing. You have to pay all solicitors’ costs so it is quite normal to obtain quotes from a number of solicitors to decide which firm you wish to use.
    To find out more about the conveyancing process in England, Wales and Scotland please read our section on the Conveyancing and House buying process from our exclusive House buying guide.
  6. Finalise Mortgage Arrangements
    Now you have had an offer accepted, you need to finalise your mortgage. Typically this is paper work time, the mortgage lender will usually want to see evidence of your earnings (recent pay slips), P60 and bank statements.
    Most lenders will also carry out a valuation on the property to determine whether the property is suitable as their security. This is not a survey but a basic valuation. Typically the lender charges around £100 to £350 for this or includes this in your overall mortgage package.
  7. Organise a property survey
    With your mortgage approved, the offer accepted, and the property off the market (make this a condition of offer) now you can arrange a property survey. This is highly recommended but it is optional. A property survey is basically like an MOT on the property. These can very in depth of information and price. Read our guide to property surveys here.
  8. Exchanging contracts
    During the period between the offer and exchange of contracts your solicitor will be carrying out all the necessary searches. Now, once the contract terms have been agreed, the contracts can be exchanged. Once each party has signed the contracts and they have been exchanged, they are binding. The contracts will include a completion date, which is the date that the property becomes yours. At exchange of contracts any deposit required has to be paid. If you pull out after exchange of contracts you will kiss bye bye to your deposit so be 100% sure about everything before you exchange contracts.

    REMEMBER – At exchange of contracts you need to arrange buildings insurance so that the property is insured from that day. Shop around for this as you could save a considerable amount per year.

  9. Completion
    This is the day when your solicitor will have completed the purchase on your behalf and the property is vacant for possession. The Transfer Deed, the document confirming you as the owner, will then be sent to the relevant registry for an update to the title showing you as the new freeholder. Completion day is all about paperwork and transferring of funds from bank account to bank account and then of course you get the keys!
  10. Moved in!
    Once you are in your new home you have a legal responsibility to advise the local authority (rates), the statutory utility suppliers, the Inland Revenue and you will need to tell others as necessary (telephone, other suppliers, any outstanding creditors, relatives, friends etc).

    Once you have moved into your new home there are a number of people you need to notify of your change of address. These include the following:

    • Family
    • Friends
    • Employer
    • Business contacts
    • Bank / Building society
    • Credit Cards, Loans, credit agreement and Insurance companies
    • Pension Provider
    • Inland Revenue
    • Royal Mail
    • Cable / Satellite Company
    • Gas Provider and Electricity Provider
    • Water Provider
    • Telephone Company
    • Mobile Telephone Company
    • Television Licensing
    • Council Tax Office
    • Dentist
    • Optician
    • Doctor
    • Schools
    • Library
    • Vet
    • Clubs and Societies
    • DVLC

Dont forget to read our guide to Moving House.

Good luck, don’t get stressed and please feel free to use this site throughout the home buying process to help support you with tips and ideas.