We understand that buying your first home is not only an exciting milestone in your life but can also be a daunting experience, especially if it is your first time dealing with a lawyer.
Through this guide, we hope to make the process as transparent as possible to enable you to navigate the process with confidence, but should you need any assistance, Holmes & Hills can offer conveyancing advice.
The Homebuying Journey
A step-by-step guide to conveyancing for first time buyers.
1. Investigate Finances And Mortgage Affordability
Before you even start looking at properties you might be interested in, it is sensible to understand what you can afford. Many banks and building societies offer calculators to help you work this out.
However, you should know that the amount a calculator shows you can borrow may differ when you apply, and a credit check is completed.
2. Find Your Dream Home
Traditionally, buyers would register with local agents, but many people now use online services. Both options are worth investigating, but it comes down to individual preference.
3. Negotiate And Confirm The Price With The Seller
Once you have found your dream home, you can either agree to the advertised price or negotiate with the seller to bring that price down. This is done via the seller’s estate agent.
4. Get A Conveyancing Quote
This can be done whilst negotiating the purchase price, but the final price you settle on may affect the conveyancing quote, particularly in how much Stamp Duty Land Tax may be payable. This is the part where you choose your property lawyer.
Many fees are involved when purchasing a property; getting a quote will allow you to see what is being charged. Occasionally, we have found that costs can be hidden or not quoted.
At Holmes & Hills, we have a policy of being transparent and as long as the transaction is relatively straightforward, you can be confident that the price you are quoted is the price you will pay.
5. Obtain Mortgage Offer
Now that you have settled on a purchase price and have your conveyancing quotations, you will need to apply for the mortgage product you have chosen.
You can do this earlier in the process if you want to be sure of the offer amount you will receive, but most mortgage offers come with an expiry date, so again, it is a personal choice when you prefer to do this.
If you leave it until later in the application process, you may need more funds to complete the transaction. In addition, many Estate Agents will require evidence of your funding for the property, and most lenders will provide an offer in principle to assist you with this element.
6. Instruct A Lawyer
You have received one or more conveyancing quotes, and now you must choose a lawyer to represent you for your property purchase. At this point, you will need to:
Pay Money On Account
The amount will depend on the Lawyer and is used to pay for initial searches and other immediate costs.
Provide a Certified Photo ID
This will be a copy of a driving licence or passport certified as a legitimate copy by someone with an occupation on an approved list that will be sent to you. Alternatively, you can visit the office of your Lawyer with your driving licence or passport, and they can do this for you.
Provide Certified Proof Of Address
As mentioned above, you must provide a certified copy of an approved document confirming your address. A list of supported document types should be sent to you.
Complete Buyer Details Questionnaire
This will be a standard form you must complete to ensure your Lawyer has all the information they need to perform required checks such as bankruptcy searches.
You will need to provide evidence of the funds you are to pay towards the purchase of the property together with the source of the funds, for example, savings, inheritance, lottery win etc.
7. Arrange For A Mortgage Survey If Required
Your mortgage offer may be subject to having a survey done. This should be done as soon as possible to ensure the mortgage offer is still valid.
8. Lawyer Requests Searches
The required searches will depend on the type of property you purchase.
Your Lawyer will be able to advise on this but will include things such as a Local Authority search to check on things such as planned development and road schemes in the area, a water and drainage search, and an environmental search which will check things such as flood and subsidence risk.
9. Lawyer Approves Contract Pack And Raises Enquiries
A contract pack contains the draft contract for approval, a copy of all title deeds, completed property forms such as a Fittings & Contents form which includes details of the items to remain at the property, a property information form and copies of any planning documents or certificates.
If the property is leasehold, you would typically receive a management pack detailing the services charges, ground rent, buildings insurance etc.
The Lawyer will review the contract pack and raise enquiries to help understand any possible defects with the property, such as rights of way, private roads, missing documents etc.
10. Lawyer Receives Replies To Enquiries And Search Results
If, upon receipt of search and enquiry results, any potential problems arise, your Lawyer will advise you and request your guidance on how you wish to proceed.
Your Lawyer can explain what the problems may mean for you in the future, but ultimately it is your decision whether those problems result in you aborting the purchase.
11. Lawyer Receives A Mortgage Offer And Deals With Any Special Conditions
Any special conditions would have been outlined in your mortgage offer. These can relate to mortgage repayment or may depend on the results of a search or survey.
12. Sale Contact and Mortgage Paperwork were Sent To the Client For Agreement And Signature And Returned To the Lawyer
Once your Lawyer has received all relevant paperwork from the various parties, the contract will be sent to you for signing. It is vital you read all paperwork to ensure you are happy with all details, as this forms the contract.
Once it is signed, you agree to all contract points.
13. Buyer and Seller Agree on Completion Date Via Respective Lawyers
Once the signed contract has been received by your Lawyer, the completion date and the exchange date can be agreed upon.
14. Consider Home Insurance
For the period from exchange to completion, it is usual for both the buyer and seller to have home insurance for the property. It is often a condition of the mortgage, so it is wise to check.
15. Buyer Transfers Mortgage Deposit To Lawyer Client Account By BACS/CHAPS
Payment of the exchange deposit cannot be made by credit card and must be in your Lawyer’s client account the day before the exchange to ensure everything runs smoothly.
BACS payments are usually free but can take up to 5 days to process.
CHAPS payments can be made on the same day, but your bank usually charges for this. All monies should be paid into a client account owned by the law firm you are using.
This keeps your money separate from the general business accounts and provides protection, as money from the client account cannot be used for business operating costs.
Once the exchange has happened, both buyer and seller are under contract. If the sale falls through at this point, there are usually penalties for the party pulling out of the sale. At this point:
- Your Lawyer sends the transfer deed to the seller’s Lawyer for signing
- Money is requested from the client’s mortgage company
- The remaining balance is ordered from the client, if applicable
- Final land registry and bankruptcy searches made
The final searches are done to ensure everything has stayed the same since the previous searches were done.
17. Mortgage Monies And Balance of Client Purchase Monies Received
18. Lawyer Receives Final Searches
There are rarely problems at this stage, but if the searches come back with any issues, your Lawyer will discuss this with you urgently.
19. Completion – Congratulations, You Own Your First Home!
20. Solicitor Will Confirm the Completion
Your solicitor will likely call you to confirm that payment has been made and that the seller’s Lawyer has received the money. At that point, you can take possession of the property.
21. The Estate Agent Will Call To Arrange the Collection Of The Keys
In the event you buy a new building property, the above process is essentially the same, but timescales will likely differ. However, as this varies for all new builds, you must speak to the developer you purchase your property from.
Visit our website at www.holmes-hills.co.uk or call 01206 593933 if you want to receive a conveyancing quotation or need advice about a property transaction.