How to Buy a House: The House Buying Process Explained
Written by Martha Lott
30th Jan 2019 (Last updated on 18th Mar 2020) 8 minute read
Buying a house will be the biggest purchase many of us will ever make in our lifetime, so it’s vital to get the house buying process right. Many people may not know where to begin, so we’ve created this guide to help you become familiar and confident with the steps to buying a house.
From setting a realistic budget, finding a conveyancer and exchanging contracts, Compare My Move cover everything you need to know about the house buying process. We can also help you out along the way and compare verified conveyancers so you don't have to.
Buying a house can seem daunting, with many of us not knowing where to begin our search. Compare My Move are going to show you the process of buying a house and guide you through everything in 6 easy steps.
It’s important to remember that how long the process takes will vary depending on your personal situation and the circumstances of the property purchase. It’s also important to keep in mind that if you’re in a property chain, the process will take longer.
1. Set a Budget
Setting a budget of how much you want to spend on your house purchase is essential to keeping costs down. Your budget should include all the costs of buying a house, including the house deposit, estate agent fees, surveying, conveyancing and removal costs and also stamp duty. Check out our Stamp Duty calculator so you know what to expect.
It’s very important to factor in the deposit as it can take up quite a large chunk of your budget. You may be thinking, "Well, how much deposit do I need to buy a house?" The answer is usually between 5% and 20% of the cost of the property. The more deposit you put down, the better mortgage offers you'll have access to.
In most cases, the deposit can be a large amount of money so it’s advised to start saving early or look into government schemes like the Help to Buy ISA.
2. Mortgage in Principle
Once you’ve set a realistic budget, the next step of buying a house is to apply for a mortgage. This should be done at the beginning of the process before you find a property as getting accepted for a mortgage can take anywhere between 18-40 days.
You can apply for a mortgage in principle with your bank, building society or with a mortgage broker. Depending on your financial situation and the price of the property and deposit, you’ll have different types of mortgages and rates to choose from.
3. View Properties
When applying for a mortgage, you should already have a rough idea of the area you want to live in along with the type of property and facilities that you’d like within local reach. However, once you’ve applied for the mortgage, your search for houses becomes serious.
You’ll have a better chance of success when making an offer on a house if you have a mortgage agreed in principle first, which is why we advise you to apply for a mortgage before choosing a house. Use our free viewing house checklist to help you when it comes to attending viewings.
4. Make an Offer
Our next step in the house buying process is making an offer. The price that the house is on the market for is usually up for negotiating with the seller. You should make your first offer 5-10% lower than the asking price, downplaying how much you're willing to spend. Set yourself a maximum price that you're willing to offer to stop yourself paying too much.
When you make an offer on a house and it's been accepted, you should ring the estate agent/seller and also email them so that you have the offer in writing as proof, just in case anything goes wrong. Keep in mind that that there are a few issues that can delay your offer from being accepted and there's also the concern of being gazumped which can seriously affect the process. Be realistic with your price and don't be afraid to negotiate.
5. Find a Conveyancer
Next, once your offer has been accepted, you will need to find a conveyancer to help you with the legal side of buying a house. Your conveyancer will sort out everything from enquiring about property searches to registering you as the new owner with the Land Registry. They will also be there to answer any questions you may have about how to buy a house or the process at hand.
If, after the local authority and property searches, you want to change your mind about the purchase, you can back out. Once you exchange contracts, you’re legally tied to buying the house and will be unable to pull out of the transaction. However, before this, you are still within your right to pull out of the sale.
It’s often recommended to compare conveyancers during your search. For your peace of mind, a good conveyancer to choose will be a professional who is regulated by the CLC (Council of Licensed Conveyancers), SRA (Solicitors Regulation Authority), LSS (Law Society of Scotland) or the LSNI (Law Society of Northern Ireland). Don't forget to factor in your conveyancing costs when comparing solicitors.
6. Property Survey
You will also need a property survey to highlight any areas of concern within the property. It's even more important to have a survey if the house you're buying is significantly older as there will more than likely be some structural damage worth knowing about.
A survey will be able to tell you about any problems within the interior and exterior of the property, potentially saving you a lot of money as you can calculate the repair costs before committing to the purchase. You should also compare surveyors to get the best deal for your survey.
7. Exchange Contracts
The next section explaining how to buy a house, is concerning the exchange of contracts. If you're selling and buying a house at the same time, then your conveyancer will exchange contracts on your behalf with the seller’s conveyancer. After this has been done, you are officially purchasing the property and can’t back out of buying the house without losing your deposit.
You will usually exchange contracts between 7-28 days prior to completion day, although it’s possible to exchange contracts and complete on the same day if you’re not part of a property chain.
8. Completion Day
Completion day will be the final day in the house buying process. On completion day, you will become the legal owner of the property, finalising your purchase and becoming registered with the Land Registry. You can now begin moving into your new home so it’s important to keep a moving house checklist to ensure nothing is forgotten.
It’s worth noting that you must pay Stamp Duty within 30 days of completion. However, if you’re a first time buyer, you won’t have to pay Stamp Duty if the property you’re purchasing is under £300,000, due to first-time buyer relief.
Questions to Ask When Buying a House
Buying a house is a life changing decision that you shouldn’t jump into without knowing the important details. Having conveyancing searches and a property survey will give you vital information on the local area surrounding the property as well as the building’s condition.
However, it’s still essential that you ask the estate agent these useful questions to help you gather more information during the house buying process:
1. Why is the owner selling?
Finding out why the owner is selling the house could tell you vital information that could affect your decision. If they’re simply moving for a new start or a job relocation, there shouldn’t be anything to worry about.
Ask the estate agent if there is a specific reason why the owner wants to sell the house. If there is a problem with the area, neighbours or the house itself, then take this as a red flag and consider if you want to rethink purchasing that specific property.
2. What is included in the sale?
Find out what exactly is included in the sale if you’re serious about purchasing the property. You will find out the majority of this in the ‘fittings and fixtures form’ once your offer has been accepted, but it’s still worth asking this question before committing to anything.
3. What are the neighbours like?
If the seller has made a complaint about their neighbours or the other way around, they’re legally obliged to tell you. This is worth finding out when you’re in the viewing stage and not once you’ve moved in.
4. How is the local area?
You will obviously do your own research about the area before deciding to move there, but your estate agent will have local knowledge that you may have missed. Find out what the schools are like, where the nearest supermarket is, how close the doctors and dentist is and so on.
5. How long has the property been on the market?
If the property has been on the market for a long time, there may be a reason that the seller/estate agent has not originally listed in the description. Ask the estate agent their opinion and do some research to see whether or not it could be over priced.
Saving Money When Buying a House
Now that you know how to buy a house and the steps involved, it’s time to save money on your conveyancing process. Compare My Move can connect you with up to 5 licensed conveyancers and conveyancing solicitors in your local area to help with your sale or purchase.
We only work with the best conveyancers in the business and we’ll even help you save up to 70% on the cost of your conveyancing too. Save both time and money by using Compare My Move today.