Guide To Buying
Step 01 - Determine your budget
Buying a property is likely to be one of the largest transactions you ever make, so it is important that your calculations are correct from the start.
Every home buyer works to a budget, whether you’re looking at studio flats or a six bedroom country estate you’ll need to create a budget to determine the properties available in your price range. Take into consideration your income, any savings you wish to use and if appropriate, any cash you plan to use from the sale of your existing property (equity). If you are planning to use the equity held in your existing property we would always recommend getting an accurate up to date market valuation from a local property expert. Berkeley Estates take into account the location of your home, condition, demand, competition and recent comparable evidence.
It is important to factor the essential services and taxes involved in buying property into your budget calculations. The most common include – stamp duty, conveyancing, searches, land registry and surveys.
Step 02 - Select the right mortgage
Whether you are applying for your first mortgage, re-mortgaging or securing a mortgage for an investment property – speaking to an expert in this field will guide you towards the right provider. Mortgage advisors will take into consideration your personal circumstances, your plans for the future, the lending criteria set out by the banks and building societies and then source the best options from 1000’s of mortgage products from lenders across the UK to meet your requirements across the term of the mortgage.
Deciding on a mortgage first you will give you the confidence and understanding of your budget that you require to put you in a strong negotiating position when you find a property you want.
Berkeley Estates can recommend a reputable mortgage advisor should you require this.
Step 03 - Choosing your next home
Online search tools have made the process of finding property easier than ever, however you may not be aware that some of the best properties with desirable locations, price or size sell before they are listed on the larger property portals.
Our top tip: Create property email alerts to stay informed of newly listed properties that meet your desired requirements.
Not sure what you are looking for? Ask yourself what you need, what you would like and what would be a bonus. Think about where you want to live and what you need from that area such as local amenities, transport links and schools. You may prefer new build properties with the convenience of no chains and low maintenance. Think about what type of location you would like to live in.
Knowing in advance what you would be prepared to compromise on is difficult but by doing so often ensures that good homes are not missed.
Step 04 - Viewing a property
Build up a better perspective of what the property is like to live in by visiting the property at different times of the day taking note of which way the garden faces and the parking arrangements It is important to also get clarification on what is and is not included in the sale price, ask to the see the Energy Performance Certificate (EPC), look up at roofs, look at windows, ask what type of heating it is and ask if there are any guarantees. If you wish to buy the property, it is advisable to arrange an independent survey to investigate any areas of concern.
After the viewing providing feedback to your estate agent will help them gain a stronger understanding of your wants and needs in order to find the best property for you.
Our top tips:
- Although we always look to be flexible to your schedule viewing diaries tend to get booked very quickly especially at weekends. Contact your estate agent a few days prior to your preferred viewing date and time to avoid disappointment
- Take a notepad and ask lots of questions. If your agent does not know them straight away, they can find out for you after the viewing
- If you want to take any photos on your mobile for future reference then always get the permission of the owner before doing so
Step 05 - Arrange Conveyancing
Conveyancing is the process by which the legal transfer of property from one person to another is made. The buyer or their solicitor/conveyancer examines the legal documentation for the property and raises questions in order to approve the contract of the sale.
After your offer has been accepted, you and the seller of the property will exchange details of your solicitors/conveyancers who will then contact each other to start the process. They are there to advise and guide you through the process, explaining the paperwork and forms and making sure that your purchase is as it should be.
Berkeley Estates can recommend a reputable solicitor should you require this.
Step 06 - Making an offer
Congratulations – you’ve found a property you want to buy. The next step is to reach an agreement with the seller on the price. Think about this carefully. Give consideration to how the property compares with others you have seen, how well it meets your requirements, your budget, competition from other interested buyers, and consider what would happen if your offer is not accepted.
There is a common misconception that you should not pay the asking price but this depends on the property. There are many examples of property selling at or above the asking price where there has been interest from lots of buyers.
Step 07 - Arrange a Survey
There are three main types of survey; a Mortgage Valuation, a Homebuyer Report and a Building Survey.
If you require a mortgage then your bank will normally insist on Mortgage Valuation to establish that the property is good security for the loan. Although you probably pay for the Mortgage Valuation you would not normally get a copy of the report and therefore we would always recommend having your own survey done in addition.
A Homebuyer report is ideal for more conventional residential property built within the past 100 years and includes a detailed visual inspection of all aspects of the property that are available for inspection.
A Building Survey (also referred to as a full or structural survey) is suited to older properties, or properties which may have different forms of construction or undergone major changes. A detailed inspection of all visible areas of the property is undertaken.
Step 08 - Finalise Mortgage & Insurance Requirements
You will receive a Mortgage Offer from your lender in which the final details of the loan you are receiving are stated. You and your solicitor/conveyancer should check this carefully. You may also be required to arrange life assurance to cover the loan and building insurance as you exchange contracts.
Step 09 - Exchange of Contracts
The exchange of contracts is the legally binding part of the process. This is when you hand over a deposit (the normal sum or liability is 10% of the purchase price). Contracts are exchanged once both you and the seller and your respective solicitors/conveyancers are satisfied that everything is in order, a date for completion is agreed and from this point both parties are legally bound to go through with the transaction.
Step 10 - The day of completion
This is the day the balance of the monies is transferred via the banking system and the day on which you will get the keys to the property you have bought. For most people this is the day that they physically move into the property with all their furniture and possessions.
The above is intended to serve as a guide and help you through the process.
As of the 1st April 2016, people purchasing second homes or buy to let properties will have to pay a 3% surcharge on each stamp duty band. That means that for properties worth between £125,000 and £250,000, where the stamp duty is 2%, those buying a second home or buy-to-let property will pay 5%, and for properties worth more than £250,000 and up to £925,000, where the stamp duty is 5%, those buying second home or buy-to-let property will pay 8%.
Previously, in 2014 the way stamp duty rates for residential purchases are calculated within England and Wales were changed. The old structure was replaced with a progressive scale of charges levied on all transactions over £125,000. The new percentages apply to the value above each threshold up to the full purchase price, for example, in the same way that income tax operates.
If you’re preparing for your next move or looking to release equity for investment, it’s essential to get an up-to-date valuation from an experienced local property expert.