How to Buy a House
We are beginning to see a level of ‘normality’ return in our day-to-day lives: restrictions have been eased and people are now starting to think about what to do next. For many, this means beginning the process of buying a new home. Purchasing a home takes time and has several elements to it which can make it a stressful period but following the points below will certainly help the process. So, as the housing market starts to move, Candice Rumble highlights 10 things you need to know:
You will want to view a property before you make an offer to purchase it so, to keep you safe, many agents are providing virtual viewings of properties to help minimise unnecessary footfall through homes. If you would like to view a property you’re interested in purchasing, contact the agent in the first instance to ensure they are carrying out viewings and find out how they will be doing this (whether virtual or physical). You should also ask about the policies they have in place to ensure safety, these could include:
- the requirement for you to wear a mask,
- limiting the number of people visiting the property
- not allowing visitors who are suffering from any COVID-like symptoms.
Before you make an offer on a property, be confident that your finances are in order as your agent is likely to require evidence of an Agreement in Principle from your preferred mortgage lender and evidence of the funds held by you to cover your deposit, before they allow you to go any further in the purchasing process.
- Instructing your legal advisor
Legal fees are likely to have a big impact on your budget so you should shop around and obtain quotes from as many solicitors as possible to ensure your legal fees are affordable and within your budget. You should also bear in mind that once your offer is accepted on a property you will be required by the agent to provide details of your conveyancer.
If your purchase is going to be supported by a parent or other relative, you should disclose this information to your lender from the beginning of the process. A loan from a relative will always be considered as such and will have to be calculated as part of your affordability. You should also be aware that lenders do not tend to look upon third party interests favourably so seriously consider this if relatives are to support your deposit in return for a small interest in the property to be paid on sale.
To avoid last minute delays, you must fully disclose any information about your deposit from the outset to both lenders and your conveyancer. If you do not disclose this information, you run the risk of a lender reducing the amount they will lend to you, or potentially withdrawing their offer completely.
Prior to completion, searches should be applied for promptly. Unfortunately, due to remote working or reduced staffing levels, Local Authorities may have delays in providing search results and this is out of the hands of your conveyancer. To help move things along, you should provide your conveyancer with any information requested at the early stages of the purchase as quickly as possible.
- Mortgage Offer
Again, due to remote working or social distancing requirements, your mortgage lender may take longer than usual to issue your mortgage offer. At this stage in the process, you can help by ensuring you have your paperwork with your lender as quickly as possible. The valuation is quite often the last step and the quicker the valuer is instructed, the sooner you will receive your offer.
- Exchange and completion dates
Once the search results, mortgage offer and replies to any enquiries which your conveyancer has raised on your seller’s solicitors has been received you will be asked for your preferred completion dates. Flexibility is key, especially where there is a chain, to accommodate all the other purchases. Be mindful that a little consideration to every party will go a long way in ensuring a smooth hand over, anything less will create further delays.
- Stamp Duty Holiday
Many people will be aware of the Stamp Duty Holiday announced by the Chancellor and may wish to take advantage of this tax break. If you have factored this into your finances, then keep in mind that you must complete on or prior to 31st March 2021. If there is a possibility that you may complete later than this, then review your budget and ensure you have sufficient funds to cover your Stamp Duty liability. Stamp Duty is payable on completion and payment cannot be deferred.
- Exchange of Contracts
This is the point at which you are contractually bound to buy the property and the seller is contractually bound to sell to you. The price at which you exchange is the price you will pay for the property. The completion date is fixed at the point of exchange (although there are some exceptions, for example when purchasing a new build). There are risks to exchanging contracts with a completion date set in the future during a pandemic which could put the parties in a position of breach of contract but there are ways of lessening this risk and we would advise that you discuss this with your conveyancer prior to authorising exchange of contracts.
- Completion day
Social distancing measures must be observed on completion day and public guidance be adhered to as much as possible. Check with your agent whether their offices are open for the collection of keys to your new home or whether you need to arrange an appointment to meet the agent at the property once your conveyancer has confirmed completion has taken place.
Movement of the property market does not therefore mean a return to normality but with the right professionals on hand to adapt to the new processes and procedures you can move into your new home safely and with confidence.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.