The Process For Buying A House: This Is How It’s Done

The process for buying a house can feel daunting and complicated. So, it’s key for property investors to be aware of the steps and fees involved and how conveyancing works.

Are you looking at investing in your first property or want to better understand all of the steps involved in buying a property? Here’s a guide for property investors to learn about the full process for buying a house.

What are the exact steps to buying a house?

There are a number of steps when it comes to the process for buying a house as a property investor. Check out our graphic for a rundown of the process, and read below to find out what’s involved in each step.

Infographic which provides a step by step explanation of how to purchase a house.

A step by step explanation of how to purchase a house.

Develop your plan

Property investors need to think about all of the costs involved with buying and operating a property investment. Figure out your budget, how you will fund the purchase and the numbers you want to realistically achieve from your investment.

Also, take the time to research your property investment strategy and the area you’re interested in investing in. Then, start putting a plan in place for what kind of property and exact location you’re looking for.

Obtain a Mortgage In Principle

Once you have your plan in place, it’s time to obtain a mortgage in principle if you’re planning to use a mortgage to purchase your property investment. A mortgage in principle is a statement from a lender that in principle they would be willing to lend you a specific amount of money.

This isn’t a guarantee. However, it should provide a good indication of what a lender will allow you to borrow and is usually valid for 30 to 90 days. To get started, compare the mortgages on the market first and decide on the best deal. Then, request for a mortgage in principle from the lender offering it.

It’s best to obtain this before you start looking for properties. Getting a mortgage in principle can make you a more attractive buyer. It shows the seller and estate agent that you’ll likely be able to secure the money you need to purchase the property.

Find the property

Once you’ve decided on exactly where you’d like to invest in and a specific budget and property type, start looking at options on the open market. Property portals, such as Zoopla and Rightmove, are always a good place to start.

Then, register with local estate agents. Tell them about what kind of property you’re looking for, and be specific.

Once you’ve come across some suitable properties, book in-person viewings. If you find a property you think will make a great investment, it’s recommended to view it more than once before making any decisions.

Make an offer

Once you’ve found the right property for your investment strategy, you then can make an offer. Some thought will need to be put into making the right offer. Undertaking a deal analysis can help you with this.

When you’ve decided how much you want to offer, you will usually let the seller’s estate agent know. This can be done over the phone, but it’s also good to put this in writing as well.

If the seller comes back with a counter offer, don’t spend more than your budget, and get fixtures and fittings in writing to ensure you know what’s included in the purchase.

Instruct a solicitor/conveyancer

If your offer is accepted, it’s time to instruct a solicitor or conveyancer to undertake conveyancing, which is the legal process of transferring ownership of a property.

A conveyancer or solicitor will carry out searches, draft and check contracts, deal with the Land Registry and pay stamp duty. As a property investor, you will want to hire an experienced professional, who is a good communicator and reliable. It can be beneficial to ask people you trust if there is a solicitor or conveyancer they recommend. 

Searches, surveys and inspections

Now there are searches, surveys and inspections to deal with. At this point, your solicitor or conveyancer will be carrying out searches to check if there are any legal issues. This will include local authority searches, drainage searches and environmental searches.

Additionally, after having an offer accepted on a property, you should always get a survey done to assess the building’s condition and detect if there are potential structural problems. There are three main types of surveys, including a condition report, HomeBuyer report and building survey.

On top of that, your mortgage lender will want an independent valuation done on the property. The lender needs to ensure the property is worth the value you’re paying for it. This is in case you don’t pay your mortgage, so it can be repossessed and sold to get the money back.

Some lenders don’t charge for this, depending on the mortgage product you pick. If this isn’t included in your deal, a valuation can cost between £150 and £1,500, depending on the property’s value.

Negotiate final purchase price

If anything is flagged in the surveys, you may want to renegotiate the final price. You’ll need to look at what the additional problems will cost you to fix and if that means you need to revise your offer.

Get experts in to further investigate and give you cost estimates for the work. Or you may want the seller to fix the problems themselves before exchanging contracts.

Pay deposit and exchange contracts

When contracts are almost ready to be exchanged, you’ll need to pay the deposit to your solicitor or conveyancer. Then, you’ll sign the contract, and your solicitor and the seller’s solicitor will swap contracts. At this point, you’re legally bound to the purchase. You or the seller can’t back out of the purchase without major cost and you are no longer at risk of being gazumped.

Completion

Upon completion, your solicitor will draw the remaining funds from your lender, which will be sent to the seller’s solicitor. You will then get the keys. And now you can celebrate, the property is officially yours!

Register title and pay stamp duty

You’ll have 14 days to pay Stamp Duty Land Tax. This is usually paid for by your solicitor. They often ask for the money to pay this prior to completion. Check out the government’s website for current stamp duty rates. Remember there’s a 3% additional surcharge for second or buy-to-let properties.

At this point, your solicitor will also register your details with the Land Registry. This usually costs around £250 to £500, but it can be more or less depending on the property price.

Once your solicitor receives the new title deeds, that’s it! You’ve fully completed the process for buying a house, and you can start getting the property ready for your investment plans!

Frequently Asked Questions

How long does the process for buying a house usually take?

The process for buying a house can take a wide ranging amount of time. It can certainly feel drawn out at times. But on average, it usually takes about 12 weeks.

However, this doesn’t include the amount of time it takes to find the perfect property investment. Once that’s factored in, along with potential unexpected delays, this can take closer to six months.

Many in the industry recommend allowing 8 to 12 weeks for finding the right property. Making and negotiating an offer can then take zero to 2 weeks but sometimes longer.

Then, getting a mortgage in place is often a 3 to 5-week process, while exchanging contracts usually takes about 3 to 4 weeks. Finally, completing typically happens 1 to 4 weeks after exchanging.

How long is the conveyancing process?

The conveyancing process usually takes between 8 and 12 weeks from the time a sale is agreed. However, this can vary, depending on the complexity of the sale and property. Conveyancing takes this long because each step of the process must be completed diligently and correctly in order to avoid further delays.

How much are solicitors fees for buying a house?

As you will need a solicitor or licensed conveyancer to carry out the legal work that comes with buying a property, it’s important to budget for these fees from the outset. Solicitors charge in three different ways: an hourly rate, a fixed fee or a percentage of the property price.

There are usually two categories of fees, standard fees and disbursements. The standard fees for hiring a solicitor for conveyancing usually range from £1,000 to £2,000, but it can sometimes cost more than this depending on the amount of work required for the specific property purchase.

You’ll also need to pay the disbursement fees, which are expenses incurred throughout the process for buying a house. These include search fees, Land Registry fees, stamp duty and transfer fees. Keep in mind that leasehold properties require more work, so will incur a higher cost than freehold properties.

Before hiring a solicitor, try to get quotes from at least three different firms for the total cost of the work. Make sure the quote breaks down all of the involved costs.

Is a conveyancer cheaper than a solicitor?

Conveyancers, who are specialist property lawyers concentrating solely on conveyancing but may not be a qualified solicitor, are typically cheaper than solicitors.

The standard fee for conveyancers is usually between £800 and £1,500, in addition to the disbursement fees. When hiring a conveyancer, the cost usually depends on the value of the property, whether it’s freehold or leasehold and current market rates.

Solicitors don’t only handle the process of conveyancing but a range of complex legal issues. That’s why they typically have more expensive fees.

Do solicitors still charge their fees if a house sale falls through?

When hiring a solicitor or conveyancer, you’ll usually have to pay a deposit of up to 10% upfront. You’ll then often pay the remaining conveyancing fees once the sale is complete, but you may have to pay for specific disbursements, such as local searches, prior to then.

But what happens if the sale falls through? A sale can fall through for a range of reasons. For example, you could get gazumped, which is when the seller accepts another offer from a different buyer after having formally accepted your offer.

If your house sale falls through, you are often still obligated to pay your legal fees. Depending on what stage you are in the sales process will determine how much you’ll be charged.

Some solicitors offer a ‘no sale, no fee guarantee’. This means if your sale falls through, you won’t have to pay the entire conveyancing bill. However, it’s recommended to get a clear explanation of what exactly the guarantee covers before hiring a solicitor.

What happens when a buyer pulls out of a house sale?

A property purchase is not legally binding until contracts have been exchanged. This means the buyer or seller can legally pull out of the sale before then. However, this could cost both parties money, depending on how far along the sale was.

One of the reasons a buyer may pull out of a sale is that if a serious issue is flagged in a survey that is too expensive to fix or that may cause the buyer to be unable to get approved for a mortgage.

If a buyer pulls out of a sale after contracts have been exchanged, they will forfeit their deposit and may also be liable for additional costs incurred by the seller.

What questions should I ask my property solicitor?

As the process for buying a house can be complicated and stressful, it’s important to make sure you hire the right property solicitor. And there are a number of questions you should ask to make sure the conveyancing process is as smooth as possible.

Here are 10 important questions to ask a solicitor before hiring them.

  1. How much do you charge and what will this include?
  2. What professional bodies are you a member of?
  3. Are you approved by my lender?
  4. Where can I read customer reviews?
  5. When do I need to pay the fees?
  6. Who will take care of my case?
  7. How often will I be updated?
  8. What happens if the sale falls through?
  9. Have you dealt with similar cases?
  10. How can I help things move efficiently?

For more helpful information about the process for buying a house and operating a property investment, check out our free resources for property investors, including guides and buy-to-let mortgage and rental yields calculators.

Peter D Doherty

Peter D Doherty is the founder of the Property Investor Academy.

A Masters graduate in accounting and finance from Dublin City University, Pete worked in the City of London for 14 years. He held senior finance roles (Financial Controller) in several substantial UK commercial banks. He is a graduate of Macquarie University.

With over 10 years property investing experience, he is the owner of a London based lettings agency as well as proptech consultancy. He regularly contributes to online landlord forums such as Propertytribes and Reddit.  Peter is a member of National Residential Landlords Association (“NRLA”).

https://uk.linkedin.com/in/peter-doherty-tal
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