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A guide to buying your first home for first -time buyers
When embarking on the journey of buying your first property, it is important that you understand the process so that you avoid any uncertainties or surprises along the way. The process can be a daunting experience with lots of new lingo and terminology to get your head around and understand. We recognise this at Battens Solicitors and are keen to make the process run as quickly and painlessly as we can, which is why we are on hand to explain and advise on every step of the conveyancing process.
1. Offer Accepted
Congratulations! You have found your first dream home, and your offer has been accepted by the seller. Now is the time to get in touch with your chosen firm of solicitors to enquire about legal fees, disbursements and instruct them to act on your behalf.
What additional costs should I be aware of when buying a property?
It is not just legal fees that you will have to pay when buying your first home. There will also be disbursements (or third-party payments) that will need to be made.
As a first-time buyer, you will not need to pay Stamp Duty Land Tax on the first £425,000.00 of a purchase price and only 5% on the remainder up to £625,000.00, which can equate to quite a saving. Other disbursements that will need to be paid including search fees, Land Registry fees and for most flats and some house purchases in big estates, an administration fee charged by the Landlord or a Management Company for updating their records.
Whilst not a legal requirement, it is always recommended that you arrange to have a survey conducted on the property to check for any major problems and recommended works and a surveyor will charge a fee for this. If you are arranging a mortgage through a broker, a fee may also be charged by your broker.
2. Initial Paperwork
Your chosen firm of solicitors once asked to act, will open a file and send you a client care letter and a terms of engagement document. These documents outline their services and responsibilities and confirm their fees and disbursements. A request for money on account will also be made at this point.
Take the time to read and complete all the paperwork received carefully before signing and returning it with all the requested information and documents promptly. The initial paperwork will also include a request for identity documents and source of funds requirements (known as AML). This step ensures transparency and sets the stage for a smooth transaction.
Until the initial paperwork is returned and AML requirements signed off, legal work on the file cannot commence so this step is very important.
3. Mortgage & Survey
If you are financing the purchase with a mortgage, your lender will arrange a valuation survey. This will assess the value of the property for lending purposes. Simultaneously, your lender finalises your mortgage application and a mortgage offer is issued.
It is always recommended that a property survey is undertaken. This is often separate to a mortgage valuation but can be undertaken by the same surveyor. You will need to select the level of survey you require. The surveyor assesses the property’s condition, value, and potential risks and sends you a report containing all relevant information.
4. Draft Contract
A draft contract package is received from the seller’s solicitor. This package includes a contract and legal title as well as essential information about the property provided by the seller.
Once the draft contract package is received the substantive legal work can commence.
5. Conveyancing Searches
Your conveyancer conducts various searches to uncover critical information about the property on your behalf. These include:
- Local Authority Searches: These reveal planning permissions, building regulations, and any restrictions affecting the property.
- Environmental Searches: These assess environmental risks, such as flooding, contamination, or subsidence risk.
- Drainage Searches: These verify water and sewer connections.
These searches help identify any issues that may impact your decision or affect the property’s value.
6. Enquiries
Enquiries on the title documents and searches will be sent to the seller's solicitors. These questions cover a range of topics, including:
- Boundaries: Clarifying property boundaries and any disputes.
- Rights of Way: Confirming access rights and easements.
- Outstanding Planning Permissions: Ensuring compliance with local regulations.
- Warranties and guarantees for works carried out
Clear communication during this stage is crucial to address any concerns or uncertainties.
7. Report
Once all searches and enquiries are complete, your conveyancer will report to you on their findings. This report explains the legal title, highlights potential issues, and provides legal advice. Review it carefully, and don’t hesitate to seek clarification and don’t be afraid to ask questions. Your conveyancer’s expertise ensures you make informed decisions.
Paperwork is also sent out for signature including the Contract, Transfer Deed and Mortgage Deed (if obtaining mortgage finance).
8. Exchange of Contracts
Prior to exchange, you will transfer your exchange deposit (usually 10% of the purchase price) into the client account of your conveyancer. Once this is received and all solicitors hold signed paperwork exchange of contracts can then take place. But what does exchange of contracts mean?
This involves both the buyer and seller’s solicitor confirming the terms of the contract over the telephone and once contracts are exchanged, neither seller nor buyer can pull out of the transaction without a penalty. This is the point at which the transaction becomes legally binding. A completion date is also set which is the date that you pick keys up and move in.
Once exchanged, you can start organising the practicalities of the move, such as booking removal companies, putting in place building insurance and packing as well as the exciting things like ordering furniture and choosing paint colours.
9. Preparing for Completion
Your conveyancer will submit the final searches at the Land Registry and collate all the funds needed for the purchase including the mortgage advance from any lender.
10. Completion
So, the big day has arrived, but what happens on the day of completion?
This is the date where the money and keys change hands; the seller moves out and the buyer can collect the keys and move in. Much of it is happening behind the scenes whilst you pack up the final important bits in boxes
On the day of completion, the purchase funds are sent from the buyer’s solicitors client account into the client account of the seller’s solicitor. Once the seller’s solicitor has received them into their account, formal completion has taken place. The Estate Agent is contacted by the seller’s solicitor to confirm that they can release the keys to the buyers. This is the exciting part as you then receive a call to say the property is yours and you can go and collect the keys.
11. Post Completion
Congratulations! You are a homeowner, but the work of your conveyancer does not stop there. Your conveyancer will now deal with informing the Inland Revenue of the purchase and if applicable paying any Stamp Duty Land Tax on your behalf and registering your ownership and any mortgage with the Land Registry. Be patient as this part can take up to 6 months. Once the application has been returned and sent onto you, our role as conveyancers is over and your file is closed and placed into store.
If you are on the verge of stepping onto the property ladder and have more questions about the process, don’t hesitate to get in touch with our Residential Conveyancing team who are more than happy to assist from each of our offices.
