We answer a good question ‘What is the first step when I want to buy a property?’
What is the first step to buy a property? Here at Greater London properties, we have come up with 5 key steps to help you purchase process;
1.) Working out your budget
It is very important to work out how much you can afford to spend on a property and it depends on whether you are a first-time buyer or already own a property. If you already own a property you have to consider if you can cope with higher mortgage payments and the cost of moving (stamp duty fees and conveyancing fees). As a first-time buyer you need to have saved a deposit of at least 5% of the property value. You also need to consider having extra savings for the moving costs. Lenders usually agree to offer you a mortgage 4 times your income (if you are buying alone) or 2 and a half times combined income (if buying together).
Seek professional help if you are unsure how big of a mortgage you are eligible for. A broker will help you secure a mortgage in principal. In principle is when a lender provides a document of how much they are prepared to lend you. This provides sellers reassurance that you are ready to buy. However, it is not a guarantee that your application will be accepted.
2.) Put in an offer
When you have found a property you would like, you will have to put in an offer. You shouldn’t rush and accept the asking price, first do some research and find out how much other similar properties in the same area go for. After, think about any potential disadvantages which could encourage the vendor to accept your offer price.
3.) Start the conveyancing process
Once your offer has been accepted, you will need to instruct a solicitor to carry out all the legal work to transfer the property under your name. You will first have to arrange the surveys. Your mortgage lender will want a valuation of the property to make sure it is worth the price. Some lenders will cover this cost themselves but if not, you will pay from £150 to over £1000 depending on your property.
A more in depth property survey may highlight any potential issues with the property such as damp. If the report shows major repairs you could reduce your offer to reflect the cost of repair.
4.) Exchanging contracts
Your solicitor should let you know once they have conducted all the searches and have received all the information they require from the vendor. The mortgage lender should also provide you with a firm offer. Now, you should be able to exchange contracts. You will have to sort out buildings insurance for your new home which starts on the date of exchange. Lenders make this as a condition of your mortgage. When you exchange, you will agree a completion date which is when you will move into the property.
5.) Completion and sorting out your move
Completion is when you hand over the funds required to buy the property. Solicitor will arrange it on your behalf and you will usually be charged for this a small telegraphic fee, £20-£50. You will have 30 days to pay any Stamp Duty owed and again your solicitor should arrange it for you. They will also register your property on Land Registry.
As soon as you know your completion date you can start to plan your move. Book a removal company as soon as possible and think about any issues with furniture you might have. Work out what items you need to buy to decorate your new home as some might take weeks.
We hope this answers your question ‘What is the first step when I want to buy a property?’. If you are looking to buy a property in Central London, please visit Greater London Properties, Central London’s largest independent estate agent or call us on 0207 113 1066.