Buyer's Guide

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Whether you have bought a home before or not, the thought of the great deal of legal work, negotiations, dealing with surveyors and solicitors, finding a good mortgage deal, as well as actually hunting down the home of your dreams, can be enough to make anyone's hair stand on end.

Buying a house is one of the biggest financial decisions that you will make in your life. It is a lengthy and complicated business, which, while exciting, is often fraught with stress and worry. Part of our service at Harris and Company, is to provide you with many helpful hints and tips, making your home-buying experience as easy and problem-free as possible.

It is important to have a good understanding of this process as it will help you to avoid some of the most common hazards of home-buying. We have prepared an informative guide to the home-buying process to help you to understand how it all works, how to plan it and what to watch out for. After reading this you should have a better idea of what to expect when buying. We want to ensure that you are prepared and ready to begin this process, especially if you are a first time buyer.

Feel free to contact us. One of our friendly team of negotiators will be happy to discuss the process with you.

TEN USEFUL TIPS

1. Work Out How Much You Can Afford

You have decided that you are going to buy a property, but exactly how much can you afford? On top of the cost of the house itself, there are many other, one-off expenses involved in buying a home and moving which can total between £2,000 - £5,000. In order to get a good idea of what sort of home you can realistically hope to buy, you also need to take these extra costs into account. To help you do your sums, here is a guide to working out how much money you have to spend and what the costs are.

Stamp Duty:

You must pay Stamp Duty Land Tax if you buy a property or land over a certain price in England, Wales and Northern Ireland. The current Stamp Duty threshold is £125,000 for residential properties and £150,000 for non-residential land and properties.

For more information on Stamp Duty please visit the following website https://www.gov.uk/stamp-duty-land-tax.

Stamp Duty calculator: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro

2. Get a Mortgage Agreement in Principle

When it comes to finding the best mortgage, there is no substitute for professional mortgage advice. Why not speak to Harris and Company’s Independent Financial Advisor Barry Harris IFAwho can guide you through the mortgage maze and find the best mortgage deal for your particular circumstances. For efficiency, initial contact will be made by telephone and email then, should you prefer, a face-to-face visit can be arranged.

3. Choose Your Home

Looking for a new home is a time-consuming process. Once you have decided to buy a house and found out how much you can afford, it is worth sitting down and thinking hard about what you want from your new home and what your needs are. Our experienced negotiators will listen to your requirements and guide you. We have made a list of some of the things you should consider when house hunting.

The Neighbourhood;

The House;

Viewing the Property;

Leasehold or Freehold.

4. Make an Offer

Put your offer forward to the Agent who will forward this onto the vendor. All offers must be put in writing to the vendor in compliance with the Estate agents Act 1979 as amended.

The negotiation will be affected by various factors, and you will do better if you take these into account:

- Your own position will also affect the negotiation;

- Are you part of a chain of sales? If not, the seller can be more certain that everything will be completed on time;

- First time buyers;

- People who have already sold or exchanged contracts on their own property;

- People who have nothing to sell.

It is a good idea to get a written agreement in principle from a mortgage lender to show the Agent/seller that you will have enough money to pay them. This demonstrates that you are serious about buying. The process will therefore take place more quickly once you have both agreed on the sale.

5. Instruct a Solicitor

You will need to hire a solicitor to deal with the conveyance and legal aspects of buying a property. There is no standard fee so it is a good idea to shop around for the best rate. Some solicitors charge a flat rate while others charge a percentage of the property price, normally up to half a percent. As well as the price of your house, the fee will take into account factors such as the amount of paperwork involved, how much skill is required and how complicated the transaction is.

Many mortgage lenders will insist on employing a solicitor to protect their interests.

When a property is being sold, an energy performance certificate will need to be provided.

Legal/Conveyancing Fees;

In some cases you may also have to pay for the legal work done by your lender's solicitor. Again, prices vary so ask your lender how much they charge. If you use the same solicitor as the lender to do your conveyancing this may save you money, but compare charges with other firms.

6. Surveys and Valuation

The mortgage lender employs a Chartered Surveyor to carry out a valuation for mortgage purposes. As well as what is known as the basic valuation, there are two main types of surveys: the Home Condition Report and the Buildings Survey (also known as the full Structural Survey). All lenders require a basic valuation, but you may wish for a more detailed survey. This is because the basic valuation will only show small problems which you will probably have noticed yourself. The level of survey you need depends a lot on the individual property you are buying.

7. Finalise Your Mortgage

8. Exchanging Contracts

The process is as follows:

1. Contracts are exchanged. You hand over a deposit which is non-refundable if you pull out of the sale.

Once you and your solicitor are satisfied that everything is in order, the contracts can be exchanged. You sign a copy of the contract which is passed to the seller, and the seller signs a copy of the same contract which you receive. Once contracts have been exchanged, both parties are legally bound to follow through with the transaction. You can no longer change your mind - if you pull out it is likely that you will lose your deposit, and you could be sued for breach of contract. You will now have no need to worry about gazumping.

At this point you will have to hand over a non-refundable deposit to your solicitor. This is normally 10% percent of the purchase price. If you do not have the money for the deposit at hand immediately, you can arrange for a bridging loan from your bank;

2. Your solicitor draws up a transfer document and sends it to the seller's solicitor.

Your solicitor prepares the draft transfer document (if the land is not registered it will require a special kind of transfer or 'conveyance'). This document transfers the title of the property from the seller to the buyer. Once both parties have agreed on the draft, it is signed by the buyer and the seller;

3. Your solicitor also arranges the finalisation and signing of your mortgage documents as well as for the money to be available on completion of the sale;

4. Your solicitor carries out final searches, enquiries, land registry checks as well as making sure that nothing is registered against the seller (or at the Land Charges Registry if the property is not registered). Problems such as undisclosed mortgages or disputes could be uncovered at this stage.

There will be various matters for you to deal with in the run-up to completion, including some documents to be signed and payments to be made: you must pay land registry fees and stamp duty. Before completion you need to make sure that all the terms of the contract have been fulfilled, such as any repairs.

9. Organise Your Move

You also need to be arranging all the practical matters related to moving house.

10. Finalise Your Contract Details

Moving In and Day of Completion

1. At last! On the day of completion you receive the keys and the seller is obliged to move out.

On the day of completion you will have paid the seller the balance of the house through your solicitors that morning (or even the day before). If you are also selling, your solicitor will use the proceeds of your related sale to pay off your existing mortgage;

2. We, as your Estate Agent, would normally be holding at least one set of keys to your new home provided by the vendor. We are authorised to release keys to your new home upon the vendors and solicitors instructions and when confirmation of completion has taken place. The seller is now obliged to move out;

3. You receive the transfer document from your solicitor who forwards these and the sellers title deeds to the lender (or yourself if there is no mortgage);

4. Your solicitor pays off extra costs (on your behalf) such as stamp duty, land registry fees and their fees.

Glossary:

Arrangement Fee

A fee charged by lenders to cover the cost of setting up the mortgage. Some lenders waive this fee.

Land Registry Fee

The land registry is a government department which looks after the registers of all registered properties in England and Wales. It charges a fee for transferring the register to the new owner. This fee is charged according to property price.

Price (£) Fee (£) Approx. cost

Up to 40,000 £ 40

40,001 - 70,000 £ 60

70,001 - 100,000 £ 100

100,001 - 200,000 £ 200

200,001 - 500,000 £ 300

500,001 - 1,000,000 £ 500

1,000,001 and over £ 800

Local Authority Search Fees

Local searches will be carried out by your solicitor/conveyancer to ensure that there are no potential problems such as planning permission on neighbouring properties or plans for new roads nearby.

Other Search Fees and Disbursements

These include index maps, commons, the coal authority, land charge, company searches, and bank transfer fees. Allow about £70 to cover an average house purchase.

Estate Agent's Fees

If you're selling your property as well as buying one, the sum charged by your estate agent has to be taken into account.

House-hunting Expenses

House-hunting itself can be a costly business - allow money for eating out, travel and telephone calls, and hotels if you are buying in a different area. Consider whether you will need time off work.

Removal Fees

Ask for quotes from at least three different removal firms, as prices vary. Remember you will need to give tips. You can do the removal yourself, but this is much more time-consuming and inconvenient. If you are DIY-ing it, costs will include van hire (+VAT and insurance), petrol, and return travel from the van hire company when you return it. You will also need about £25 for insurance.

Other Costs

A few more to bear in mind: Buildings/Contents insurance premiums;

Additional removal insurance;

Disconnection of services (water, gas, electricity, telephone);

Reconnection of services;

Installation of new equipment;

Carpet laying;

Kennelling of pets;

Mail redirection;

Change of address notice.

Contingency Fund

Leave a decent-sized contingency fund for emergencies. You do not want to be left completely penniless in case you have unexpected extra costs.