Home ownership has many rewards: privacy, security, not to mention the sense of accomplishment. Buying a home is a right of passage as well as the costliest endeavor most of us will ever undertake. Because the process is so complex and represents such a commitment, it's very important to understand the home buying process and avoid being caught unaware. This step by step guide will help (there are excellent deals on frameless glass balustrades here).
First Things First: How Much Can You Afford?
It would be lovely to own a home in the country, but for most that just isn't a possibility. Unfortunately with property prices stubbornly high despite low demand, many other homes are out of reach as well. For those that wish to own a home, a realistic budget of how much mortgage is affordable is a necessary first step. Viewing homes without a firm idea of how much is affordable is at best foolhardy and at worst a waste of time if a would-be homebuyer finds that they are unable to afford what they thought.
Find an Estate Agent
These days, anyone can search the property databases on the internet to find their dream home, so some may question the purpose of an estate agent. The fact is, qualified estate agents can offer advice, answer homebuyers' questions, and may have deeper access to property listings than an internet search can provide. It is critical that homebuyers do not rely on the seller's agent to provide these services, since the seller's agent is biased; they are working on behalf of the seller.
Since estate agents are not required to be licensed, finding a trustworthy agent is crucial. Commit to spending time researching and speaking to agents to find one with a strong background who has experience working on the buyer's side of transactions, and who demonstrates professionalism in their interactions.
Seek Mortgage Pre-Approval
Mortgage pre-approval does not guarantee a borrower a loan, but it does start the process. Ultimately loan approval rests on the bank's assessment of the property, but first they will assess the buyer. Contact several banks and ask for their average rates and terms. Once the list has been narrowed down, buyers can provide banks with more detailed personal information. Remember that each time an individual's credit records are searched without action, the overall credit score can be damaged.
Narrow Down The Search
With thousands of properties on the market, buyers can save themselves a lot of time by determining the "must-haves" for their home. These must-haves may change as the realities of budget and availability set in, but they are an invaluable starting point, and may include the following:
Number of beds
Possibility for a garden
Once the desired attributes have been determined, the estate agent can perform a thorough search of the listings to turn up the properties that best match these expectations.
View Potential Homes
The estate agent will schedule viewings for the homes that the buyer is interested in viewing. Most agents recommend that buyers view at least five homes before making a decision. Even if the second home on the list is "the one", it's a good idea to look around further, especially since in the current market it isn't likely that another buyer will make an offer immediately.
Make an Offer
Once the dream home is found, it's time to make an offer. Both sides will be coming to the negotiating table with advantages: the selling side is asking more than their minimum selling price, though the buyer does not know how much more, and the buyer is going to offer less than their maximum buying price, though the seller does not know how much less.
Keep in mind that the initial offer should not be unreasonably low, as this will hamper or cancel further negotiations. As a rule of thumb buyers should make an offer at least ten percent less than they are actually willing to pay to give negotiating room. As negotiations commence, raise the offer incrementally, by £1,000 or so at a time, until the seller accepts or the maximum price it is reasonable to pay is reached.
The Offer to Purchase
The offer to purchase, when agreed upon by both parties, will usually be drawn up in writing by the estate agent. The seller will ask for a token deposit in order to prove the buyer's seriousness. Although a deposit has been given, at this point there is no contract; either the buyer or the seller may walk away, though the buyer may lose their deposit.
The offer of purchase should be forwarded to the buyer's lending company as soon as possible so that the lending company can begin final approval for a mortgage. The lending company may also send out an agent to make a valuation on the home in question.
Hire a Conveyance Professional
Conveyance, the transfer of title from the seller to the buyer, is an almost arcane process due to the complexities of property ownership records. It is critical that either a solicitor or a licensed conveyancer makes sure that there is a clear title. This professional will search all property records to make sure that the seller holds the title to the property without liens or encumbrances that could prevent the buyer from taking full ownership. They may also do a building survey, a report on the condition and potential problems of the structure and property. Most conveyancers recommend that any property built prior to 1932 is fully inspected even if there is no other reason to suspect an issue.
If the mortgage lender has indicated that the mortgage is likely to be approved and the solicitor or conveyancer has given the property a clear title, the buyer should begin contacting insurance companies for homeowner's insurance. Both the property and the buyer's belongings should be fully insured beginning with the completion date.
Once the buyer and seller sign their contracts in the presence of witnesses and exchange the document, the purchase of the home is legally binding, and will be effective on the agreed-upon completion date. At that time, the mortgage company will release funds to the seller, the deeds to the property will be given to the buyer's solicitor or conveyancer, and the buyer will receive the keys.
At the end of this process, many buyers are ready to take a vacation, and for good reason. The long legal history of property transfer has led to a complex process that amounts to a temporary full-time job for would-be homeowners. However, the benefits at the end are well worth the effort that this process entails.