The first step to buying your new home is to find out what budget you have. This can be done via your bank or financial advisor who will work out what you afford to pay for a property and what the monthly payments will be. They will often give you an agreement in principle or mortgage promise for the amount they have agreed. Should you need any advice Steps Estate Agents financial advisor offers free advice – (please contact Paul Meredith 0208 593 5933).
The next step to buying a new home is to find the house you want. There are various ways of finding your property ie via the internet, local press or directly from the estate agents mailings or window adverts. Once you have found the property you want you will need to make an offer via the estate agent. The offer you put in will be subject to legal work, survey and searches.
Until exchange of contracts there is no binding contract between you and the seller, therefore you are free to withdraw from the transaction at any time should you discover that something is wrong with the property, the seller is also free to withdraw until exchange of contracts should they choose to sell to somebody else.
Once your offer is accepted you should finalize your mortgage application and send this to the lender along with any monies required for survey. Mortgage lenders do require a variety of information about you and your financial history so you should make this available to the lender from the outset to to avoid delays at a later stage.
You should also at this point look to instruct a solicitor. The estate agents will forward a copy of the memorandum of sale to your appointed solicitor laying out the details of the transaction. The solicitor will then write to the other parties confirming their instructions and will request a cheque for the local search which can take up to 4 weeks and for this reason aim to put them in hand at the earliest opportunity.
Your survey will be instructed by the lender and carried out. Approximately 5-10days after the survey has been carried out you will receive a copy of the report.
Soon after your solicitor has been instructed they will receive a draft contract package from the sellers solicitor. Initially, you will be sent a plan of the property and various other questionnaires completed by the sellers. The solicitor will check through the draft contract package and make any additional enquiries necessary to satisfy themselves and the lender that there are no problems with the legal title.
Shortly after the solicitor should receive your mortgage offer and the result of the local search. The local search result will be checked by the solicitor and any further queries arising will be passed onto the seller solicitor.
The mortgage offer will be checked by the solicitor ensuring that any conditions imposed by the lender have been or will be complied with.
Once all of this information comes together you will be asked to sign your contract – which will be held by your solicitor until you are ready to exchange contracts. At this stage you will need to give your solicitor your deposit monies (normally 10%) but a lower deposit can sometimes be arranged if you are obtaining a higher percentage mortgage.
The deposit will need to be cleared before exchange of contracts takes place.
Law society regulations now state that your identity will need to be checked and so your solicitor will request a copy of your passport ( or other form of i.d) At this time you should arrange a mutually convenient date with your seller (and if appropriate the rest of the chain) to complete the transaction.
The completion date can be on any weekday that is convenient and this will need to be arranged with your mortgage lender to ensure there is adequate time to transfer the funds required.
Once contracts have been exchanged the contracts become binding and failure to go through with the purchase will mean that the other party can retain your deposit and take you to court to recover any losses they have suffered.
The exchange is effected by the solicitors in a series of phone calls. The deposit is then sent to the sellers solicitor who hold it on account until they put it towards the purchase price on completion. On the fixed completion day the solicitor will telegraph the balance of the purchase price (the deposit having already been paid) to the sellers solicitors bank account.
The sellers solicitor will send your solicitor the signed transfer and title deeds as soon as they receive the money from them.
The hard work will now be over (other than the unpacking!) and you can enjoy your new home.
