Making an offer
When you are confident you have found the right property you can make a formal offer subject to contract and to a satisfactory survey. You may have to pay a holding deposit at this stage to the estate agent, held on behalf of the buyer until it is time to exchange contracts. This will usually be refunded if the seller pulls out.
The next step is to make a formal application to your chosen lender for a particular mortgage. The lender will need quite a bit of information about the property and also about you. It will check you are able to repay the loan over a long period and that the house or flat is in good condition.
The other key members of your home purchase team are your solicitor and the surveyor.
The role of the surveyor
You need to know you are getting good value for money and your lender needs
to be certain the property is suitable security for a mortgage.
The lender will commission a qualified valuer to look at it – you will usually pay a fee but some lenders offer free valuations.
The valuation is not a thorough survey, so it is in your interest to consider a more in-depth survey, called a Homebuyer’s Report, or a full structural survey, sometimes referred to as a Building Report.
The Homebuyer’s Report is less detailed but gives a good general overview of the property’s structure and condition. A Building Report goes into much more depth; it will cost more and is advisable for older properties.
The offer of an advance
Unless the valuation or other enquiries are unfavourable, the lender will make a mortgage offer based on the valuation of the property or the purchase price – whichever is lower. Once you have accepted this offer, the legal procedures have to be completed before the property finally belongs to you.
The role of your solicitor
Your solicitor’s main job will be conveyancing – the legal transfer of ownership of your new home. Before you engage a solicitor ask them how much they will charge for this service and shop around for quotes. Don’t, however, go for the cheapest deal unless you are happy the solicitor will do a good job for you. Don’t be afraid to ask questions about the firm and the solicitor who will handle your case.
Your solicitor will help negotiate if you wish the seller to do any repairs before completion or if, after your survey results, you want to lower your offer. He or she will also check there are no road construction plans in the area that could affect the property.
When contracts have been drawn up and agreed, and your solicitor has received your mortgage offer, then contracts are exchanged. At this time the price is fixed and the purchase is secure. A 10 per cent deposit is normally required at this point, but this is negotiable if, for example you are borrowing more than 90 per cent loan-to-value.
Completion – when you Þnally own the property – is usually one month from the date of exchange, but it can be shorter or longer if both parties agree. This legal system applies only in England and Wales.
The Law Society and the Council for Licensed Conveyancers can give you the names of conveyancers operating in your area. Visit lawsociety.org.uk to get details of a local provider.