Thinking of buying a house but not sure how it works? Read this post to see the 10 steps when buying a house.
The steps when buying a house can be a mystery, especially for first time buyers.
I remember spending hours online searching the step by step process when buying a house, trying to understand what would happen next.
That definitely added an extra level of frustration to an already exhausting process!
I have always been a planner and not knowing what the next step would be, really stressed me out. Especially when the agent put pressure on us to do everything quickly.
Yes, but what exactly should we do?
We had put an offer in and got accepted, surely the stressful part was over right? Not really, that was just the beginning.
In this post, I want to share with you the 10 steps you go through when buying a house, hopefully this will be helpful to anyone looking to embark in this amazing journey.
(and a reminder not to buy a house ever again for me – just kidding… maybe)
The 10 steps when buying a house
Put an offer to the house (and get it accepted)
Obviously the first step is putting an offer in and get it accepted. This may involve some deal of negotiation, but nothing really happens until the offer gets accepted.
Some estate agencies might ask for your Agreement in Principle during the negotiations, but you can tell them that you will apply once the offer is accepted, as we did. You have to be firm because they can be a bit bossy especially if it’s the first time you buy a house, but don’t get intimidated.
The Agreement in Principle is only valid for 60 to 90 days so you want to apply for one when you really need to.
When your offer gets accepted (hurrah!) you have to literally drop everything you’re doing and go to the estate agent for the offer substantiation, where they look at your payslip along with two proof of identity and confirm you can afford the house. It is basically a safety measure for vendors to trust they have picked a good buyer.
Our offer got accepted on a Monday morning and I was told the agency would take the house off the market only if I completed this step on the same day. I had to go to my partner’s workplace, get his driving licence, run home, get both our passports and the latest payslips and run to the agency. All before lunch time. I am sure I have never sweated that much in early March.
The next three steps when buying a house happen at the same time:
Instruct a solicitor / conveyancing firm
The next three steps really happen at the same time, but in our case the solicitor name was the first thing the agency asked us to decide upon. We had requested a few quotes from conveyancing firms we found online. Luckily enough one of the cheapest was the same solicitor a friend used 10 years before, and it was one of the recommended options from the estate agent, so we went with them.
This decision turned out to be a very good one: the solicitor was extremely thorough and a bit old school, with every email followed up by a confirmation via post, which we really liked.
Arrange the Homebuyer survey
When buying a house it is important to get the right survey to check the status of the property. I would recommend picking one from the RCIS, the Royal Institution of Chartered Surveyors. There are various types of surveys, from the very high level to the most details;
The main three are:
- Condition report – Provides only a very high level review of the property
- HomeBuyer report – A more comprehensive survey: will check for structural problems and will help you negotiate the price down if they find issues you will need to fix.
- Building survey – Full survey suitable for older properties or if you are planning improvement works
It’s really hard to advise which one to go for, but my recommendation would be to pick the building survey if the house you’re purchasing is 10+ years old.
New built usually come with a guarantee from the builder that they will repair any issues for a fixed period of time, the most common is the National House Building Council (NHBC) warranty, so you might want to pick a more high level survey.
If you want to know more about how much these survey cost, click here
Apply for an Agreement in Principle
Once your offer is accepted, and at the same time you arrange your survey and instruct the solicitor, you can apply for an Agreement in Principle (AiP).
What is an Agreement in Principle?
Getting an agreement in principle is totally free and it is basically a lender agreeing to give you a certain amount of money.
The AiP is not legally binding so you can still apply for a mortgage somewhere else but at this point of the process you should really know which mortgage you will going to apply for.
The mortgage broker, if you have one, will do this for you and will also manage the next few steps for you:
Once you have an AiP approved you need to formally apply for a mortgage, which means submitting loads of documentation including, bank statements, copy of payslips and proof of deposit.
The lender will also ask you to confirm any costs you currently have, e.g. a car lease or pre-existing loan. They basically want to ensure you’ll be able to pay back what they’ll lending you.
Receive the mortgage offer
This, in my opinion, is the most stressful part of the process. Waiting for the mortgage offer to come through, especially if you are going for a property that’s at the top end of your budget.
Once you receive the offer read it carefully, because there will be terms that were not clearly stated in the application form.
Get insurance quotes
One of the requirements from the mortgage lender is for you to have a building insurance, to cover you (and them!) should anything happen to the property. That’s often non-negotiable, you need to have it otherwise they won’t give you the mortgage.
Don’t get it too soon though, you’ll need the policy to start from the exchange date and most of the times you don’t know when that will be until last minute.
What insurance to get?
You can use a comparison site to find the best deal for you, but I would recommend adding the content insurance, because the two combined will be a lot cheaper than buying separately. A content insurance cover everything that’s in the house, like furniture, TV, curtains, anything! We also added white goods cover because you never know when you’re washing machine is going to break and ours is not that new.
Completion date activities
Completion date is made of a few steps:
First of all, you’ll meet your conveyancer to go through the contract and sign it – very anti climatic but that’s it!
The following day you need to send the money to the solicitor’s account.
You might have to do it very urgently, because the bank may take a few days to complete the transaction and until that’s done they won’t arrange to exchange.
This was a very emotional moment for us: all the efforts we made to save money in a way end there, when you do a bank transfer to the conveyancer and you’re suddenly poor again!
On exchange date, your conveyancer and the vendor’s arrange to transfer the money and the transaction is fully confirmed. This is a very delicate moment if there are more than one transaction in a day (it’s called ‘a chain’ – for example you’re selling your property to buy a bigger one, and your buyer is also selling their previous property) and it can be quite stressful because there isn’t anything you can do, it’s all in the conveyancers’ hands.
Once that’s done, you either get a call from the conveyancer or from the estate agent and you can go and pick up the key.
Congratulations, you’ve made it, you’re officially a homeowner!