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- Castles guide to buying your home
- Choosing a property
- First time buyers guide
- Freehold, leasehold & commonhold - what does it all mean?
- Making an offer
- Moving In Checklist
- The legal process
- Tips
- Jargon Buster
Castles guide to buying your home
- Finances
It is advisable to get your finances, including your mortgage, agreed in principle as early as possible, as having to organise finances after you have found a property can result in losing out to another person who is ready to go.
- Location, Location, Location
Decide where you want to be – the all-important location – and what type of property you require. Do you long for a Victorian terrace or a modern detached property? Will two bedrooms be enough or do you need three?
- Register with Castles
The next stage is to register with us either by calling or visiting our branch. This is where you discuss your requirements and your wish list. From this your sales advisor will be able to develop this into a workable search brief.
- Viewings
With a clear understanding of your requirements you will receive a selection of properties that match your criteria. In order to secure a property, we recommend an early viewing. Here at Castles we are open at times to suit you, whether it is after work or at weekends. Once you have viewed, we will call you to get feedback. This will give a more detailed picture of what you are looking for and secondly we need to update the owner on your feedback.
- Making an offer
You have found the one! The next step is to make an offer. We will then submit this offer to the seller. Once an offer has been accepted that is when the hard work starts.
- Sale agreed
Once your offer is accepted, you will need to instruct your solicitor to proceed immediately. At this stage it is a good idea to discuss exchange and completion dates. This is also the time to instruct your mortgage broker to proceed with your mortgage application and make arrangements for a survey.
Searches and Surveys - A draft contract is drawn up by the seller's solicitor and sent to your solicitor, who will raise some preliminary enquiries. A survey of the property will also be booked by a surveyor on behalf of the mortgage lender to identify any structural problems and advise on the property's value.
Mortgage Offer - Once the survey has been completed and the report has been submitted a formal mortgage offer will be sent to your solicitor for you to sign and send back.
Contract approval - Once the searches are back and answers to the preliminary enquiries are received, the draft contract is approved by your solicitor. Providing there are no further enquiries, you are ready to exchange contracts.
- Exchange of contracts
The contract then needs to be signed by you and the seller. The deposit (usually 10% of the purchase price) is telegraphically transferred or paid by the buyer's solicitor in the form of a banker's draft. The completion date is then set.
- Completion
This is generally set a few days to a few weeks after exchange of contracts, depending on each party's personal requirements. Residual monies (usually 90%) are now transferred from your solicitor to the seller's solicitor's account.
Congratulations, you are now the legal owner of your new home!
Choosing a property
Viewing properties can be long and laborious if you haven't identified exactly what you want and where. Research the areas you are interested in, paying particular attention to the things that are most important to you, such as local amenities, transport links, schools, open space and council-tax bands.
When you have found the area's you want to live in and the type of property you can afford, it's time to start viewing properties. It's best to have a list of things to ask and look out for, to help you identify properties that might be worth a second viewing, for example:
- Ask to see a copy of the energy performance certificate (EPC).
- If it is a leasehold property, how many years are left on the lease?
- Check out the boiler.
- Does the property have gas central heating?
- What council-tax band is the property in?
- Does the property have double glazing?
- Is the attic well insulated (check the EPC)?
- If the property is leasehold, are there any service charges?
- Is the property near suitable transport links?
When viewing a property, it is best to take a friend or relative with you for a second opinion. All our viewings are accompanied. If you like the property, make sure you view it at different times of the day to get a better idea of what living in the property and the area is really like.
So, you have decided to get onto the property ladder? Buying a property can be an extremely stressful and overwhelming experience, especially if you aren’t fully aware of the stages and processes the purchase has to go through. Our Castles First Time Buyers Guide is here to help!
Choosing a Location
If you are thinking of moving to a new area, make sure that you have checked out all of the local amenities and you are aware of the travel options to and from work/family/friends and that they are acceptable for you. It may be worth looking a little bit further away from the city centre (if you want to be near a city) as you will more than likely be able to afford more for your money, but be aware of the extra transport costs. Ask yourself the following questions:
What kind of home are you looking for?
* House, flat or studio?
* Number of bedrooms?
* New or old property?
* Perfect condition or in need of repair?
* Home office or children’s playroom?
* Car parking space or garage?
* Garden or terrace?
What about location?
* How easy will it be for you to get into work?
* How close to the shops?
* How close to friends and family?
* What are the local schools like?
* What is the crime rate like?
Working out your budget
Once you have decided on an area, it is best to work out what your budget is. It is a good idea to save some form of deposit (usually 5%-10% of the purchase price). When working out your budget, you need to be honest and realistic about your outgoings and affordability. You also need to include conveyancing fees, stamp duty, insurance payments and premiums.
It is best to get a mortgage agreed in principle which proves to the vendors you are serious and you are able to afford the amount you put an offer in for. It also speeds up the process further along when you actually apply for the mortgage which will reduce the risk of the sale falling through (gazumping).
Viewing Properties
So, you’ve decided upon an area(s) you would like to move to, you know what your budget is….now you need to go and see some properties! It’s a good idea, before you start viewing properties to draw up a list of ‘must-have’ criteria that are absolutely essential and not a compromise, such as ‘a garden because you have a dog’. Then draw up a list of ‘luxury’ criteria which would be nice to have but aren’t a deal breaker if the property doesn’t have them - such as a garage, or a third bedroom/study.
The next step is to register with all of the agents within your desired area, scour the local newspapers, sign up to email alerts and keep a close eye on property websites. The fun part! Arrange some viewings for properties you are interested in and get a feel of the market and the sort of property you could get for your budget. Take your time, the more properties you view, the more you will have to compare against and get an idea of what you like. It is a VERY big decision – don’t rush it! If you see 5 or 6 in one day, they will more than likely just blend into one, so its important to make notes so you remember what each one is like.
Once you have seen a property you like, arrange a second viewing, it is important you view it at a different time of day (at night if you originally viewed it in the daytime). This enables you to see what the neighbours are like in the evenings and possibly you can see what the heating system is like.
At this stage it may be wise to appoint a solicitor. Register all your details with them and pass your solicitors details onto your estate agent, which again saves time later on in the process. It is wise to have one recommended to you, also one that is local to your home or to where you work so you can easily drop paperwork off etc.
Which Mortgage?
The type of mortgage you choose will depend on a lot of factors, including whether you can take mortgage holidays, the ability to make under/over payments, whether you choose fixed, variable, repayment or interest only payments. All of these choices may feel rather daunting at first but after talking to a professional about what’s best for your current situation, the whole process will seem a lot less stressful. For example if you use a financial advisor and choose a fixed two year mortgage using the repayment option, when your two year plan comes close to finishing, your financial advisor will search the market for the best available option at the current time in order for you to re-mortgage wisely. This ensures you don’t need to worry about what to do once your initial plan comes to an end.
Putting in an offer
Once you have seen the property you want to buy, put in an offer to the estate agent, who will then put it forward to the sellers. You need to decide how much your absolute maximum budget is because if your original offer is rejected, it’s very easy to get carried away. Stay grounded and aware of your limits. If your maximum offer is still rejected, it will be very disappointing because you had your heart set on a particular property and you can’t have it. This will be disheartening, but start again, you might find another property 10 times better than the original one. You just never know!
If your offer is accepted
Once your offer has been accepted, if you haven’t done so already, instruct your solicitor and give their details to your estate agent. You need to make sure your solicitor is aware of the speed issue as this is the stage of the process where many buyers are gazumped.
Provide the solicitors with any paperwork as soon as you can. Also, if you are using a financial advisor, request they submit your mortgage application. You also need to make arrangements for the survey (which again your financial advisor will do).
The solicitor will then proceed and start the necessary searches which include a local authority search land registry search as well as looking into stamp duty and other legal paperwork. They transfer the title deeds into the buyers names and organise the mortgage deed.
Stay in regular contact with your estate agent and your solicitor so you are aware of everything that is going on with the purchase.
Surveys and Valuations
As mentioned earlier, once your offer has been accepted, a survey of the property will need to be organised. There are three different types of surveys. The valuation survey, the homebuyers survey and a building survey. The valuation survey must be carried out on behalf of the mortgage lender and is to establish the amount and terms of the loan. Most buyers opt for the Homebuyers Survey which goes into more depth and is recommended – it looks into urgent problems that could effect the value of the property. It is also slightly more costly but worth the extra money. A Building Survey is normally required when a property is of an unusual construction or has had extensive alterations, if it's old, in need of serious structural repair or if you're planning a major conversion or renovation.
Exchange of Contracts
Once the solicitors have done the legal work, the exchange of contracts can take place which means the property is legally yours. It is a legal requirement to have buildings insurance active from the day of exchange. A date of completion (usually moving day) should have been arranged, so now it’s just waiting until you get those keys!
Spread the Word
Send out change of address cards to all your friends and family and tell them the good news. Congratulations you have bought your first home! Now its time to move in and crack open that champagne!
Useful Questions to Ask
- What position is the seller in?
- Do they want to move quickly?
- Are they in a chain? If so, how long is it?
- What fixtures and fittings are included as part of the sale?
- Is there any room for negotiation?
Freehold, leasehold & commonhold - what does it all mean?
Freehold means you own the land and the property completely and you are responsible for all maintenance and repairs.
Leasehold means the freeholder agrees to sell you a lease on the property for a specified number of years. The lease will state who is responsible for maintaining the property and grounds. You may have to pay ground rent and service charges.
Leases are initially for 99, 125 or 999 years, with the length reducing each year. Recent laws have increased the rights of leaseholders, enabling them collectively to either buy the freehold or seek an extension to the original lease. The laws are complex, so do get independent legal advice. The Leasehold Advisory Service (LEASE) website,www.lease-advice.org, is a good place to start.
Commonhold applies to flats. It means you own the freehold to the flat and share the freehold of the communal areas and grounds with the other owners. You don't have to pay service charge or ground rent, but you will have to contribute towards the commonhold association fund for things like maintenance and insurance.
When you are ready to make your offer, call the estate agent in charge of the sale of the property immediately. If you like the property, the chances are others will too, so speed is essential. You may want to put your offer in writing and give the name of your solicitor.
The estate agent will contact the seller and await their decision. Don't be surprised if your first offer is rejected. Buying and selling is about negotiation and this is where the estate agent comes into their own, so if you are a seller as well as a buyer, make them work for you! The estate agent must confirm any offer in writing.
If the seller receives similar offers, you may be asked to take part in a sealed bid. This means you must make only your best and final offer, and the seller will use this information to make a choice.
If your offer is accepted, the agent will write to confirm the address of the property, the agreed price, and the terms and conditions. The document will also include the names and addresses of both parties and their solicitors.
There is so much to organise for a move that often important things are understandably over looked. Use the below check list a couple of weeks before to make sure you've got everything covered.
Change of Address Service
A new website 'I am moving' allows you to tell many organisations including gas and telephone companies of your new address - all for FREE.
Have you contacted your Council Tax Office?
Contact your local council's council tax office to let them know the date you move out of your current property and when you move into your new one so they bill you correctly.
Have you redirected your post?
You can download the form from the Post Office website. It can take up to 10 days to set up and there is a charge.
Have you informed your utility providers?
You need to tell them at least 48 hours in advance that you are moving. Pass on the details of your current supplier to the people moving in. On your moving day you will need to read the meters in both properties so the correct bills can be issued. When you move into your new home contact who you want to supply your utilities and suppliers so they can register you as a new customer.
Have you arranged for your final telephone bill?
If the answer is no, you will need to do this and arrange a new connection at your new home. You may be able to transfer your existing number.
Have you informed your bank or building society?
You will need to do this to ensure your statements are delivered to your new address; the same applies to your Credit Card Company and insurers. It is also important to alter or cancel direct debits you have for your old home.
Have you updated your driving licence?
Visit the Driver and Vehicle Licensing Agency to find out how at the
Have you updated your details on the Electoral Register?
The register is updated every month and you need to be included on it to vote. You can download the form from the Electoral Commission's website and then send it to your Electoral Registration Office, which is based at your local council.
Have you told the TV licensing?
Your TV licence will need to be transferred. You can do this online or by calling 0870 241 6468.
Have you decided what you do and don't want to take?
There are lots of charities that will gladly have your unwanted items including charities that specialise in recycling furniture. You can search for a charity in your area on the Charity Commission's website.
And finally...
After you've moved in you might want to look at the government section on home improvements to read about energy efficiency, fire protection and other measures for your new home.
Conveyancing
On May 21 2010 Home Information Packs were abolished. As a buyer, though, you will still need to get hold of lots of important information about the property you plan to buy; a process better known as conveyancing.
It is best to employ a professional conveyancer, with the all the necessary legal qualifications. They will make sure you have all the information you need to proceed with the purchase and flag up any details, which may affect your decision.
A conveyancer should check and supply you with the following information as a minimum:
- Evidence of title
- Local-authority searches
- Land charges searches
- Water and drainage searches
- A copy of the lease, where applicable
- Commonhold documents, where applicable
- Energy Performance Certificate (EPC)
Your conveyancer will chase up any queries you have about the property or the purchase with the seller's solicitors. They will not allow the sale to proceed until you have received all the relevant information and confirmed you are ready to exchange contracts.
Conveyancing takes around 8 - 10 weeks, but this varies from case to case and sometimes the process can take much longer. Leasehold properties involve more work as the lease has to be thoroughly checked and this will affect the cost and may take more time.
Family and friends may be able to recommend a good conveyancer. Alternatively, we can recommend reputable local firms.
Surveys and valuation reports
Your mortgage lender will arrange a basic valuation of the property. This inspection is purely for the lender's benefit, even though you have to pay for it, and it reassures the lender that the property is worth the price you have offered.
Many people also choose to commission their own, more detailed, survey. This should help to uncover any underlying problems with the property. There are two types of survey you can buy: a homebuyer's report and a building survey. Speak to your conveyancer or ourselves for more information.
Be prepared to view as soon as possible –
The best properties in the market generate the most interest, so don’t waste time when it comes to buying your new home
Put yourself in a position to buy – Qualify yourself for a mortgage as soon as possible. When buying a property it is worth providing your estate agent with as much information as possible, from your property being chain free to your readiness to proceed with the purchase.
Multiple viewings – try and view the property more than once at different times of the day especially at weekends when everyone is at home and at rush hour to check how local roads may be affected by congestion. If this property is to be yours, then you need to have as much information as possible about not only the house but also the surrounding area.
Look beneath the surface – When buying a house it is important to make an impartial judgment based on every aspect of the property. Make sure you distinguish between major work and ‘cosmetic’ work. Don’t let your judgment be clouded.
Protect yourself – property surveys maybe expensive, but they can uncover any major defects which may make you renegotiate on price or even reconsider the purchase.
Location, location, location – research the local schools, shops, parking, transport and neighbours to get a good feel of what it will be like to live there. Your dream house may not be so idyllic upon further investigation.
Don't rule out offering the full asking price - if you find your ideal home and it is priced correctly, consider offering the full asking price to avoid losing out. By bidding correctly and accurately for your desired property you stand a much greater chance of securing the house without being outbid or rivaled.
Ask lots of direct questions about the property – If this is going to be the property of your dreams then ask as many questions as you can about it. Remember to ask about any previous building work that has been undertaken, as well as any major faults that have been highlighted.
Remember, the estate agent works for the vendor – The agent is working on behalf of the seller so be willing and eager to view properties so that you’re top of the agent’s list to call. Stay in regular contact so they are aware of your interest in their properties.
Don't be put off by a property that is on the market at a low price, compared to others in the area – In this housing market some of the best deals are sold on behalf of developers and lenders and priced to sell quickly. These properties include some of the best value houses around, so remember to give these your consideration.
We have compiled a short list of property terms to help you assist you with the buying process:
Chain: This is the sequence of buyers and sellers – most people who sell their property are also buying at the same time. Therefore there can be a chain or a number of several and sellers, which depend on each other for the sale and purchase of their new properties. For example, if one buyer or seller drops out, the chain may collapse, whereby the paperwork for the properties within the chain is delayed or cancelled.
Chain Free: This is when the owner of the property does not need to sell the property in order to buy another; therefore it is offered as chain free.
Completion Date: The date when the transaction (either the sale or purchase of a property) is completed, i.e. the date you become the owner.
Completion Statement: A statement from the solicitor detailing all financial transactions, including all costs.
Conditions of Sale: The terms by which the buyer and seller agree to sell/buy the property. The Law Society sets standard conditions. The lawyer sets special conditions.
Contract: The legally binding agreement specifying details of the house sale or house purchase. The contract legally commits both the buyer and the seller to the transaction. The house seller's conveyancing lawyer draws up two copies of the same contract and each party signs their own copy. When both parties are ready to legally commit, the two contracts are exchanged.
Conveyancer: The property lawyer who manages all of the matters arising from the sale of a house or the purchase of a house. Can be a solicitor or a licensed conveyancer.
Conveyance or Transfer: The legally binding document that transfers the rights, burdens and the benefit of the land.
Council for Licensed Conveyancers: A regulatory body for conveyancing with whom all conveyancers should be registered.
Deeds: Legal title document which provides historical information about the property.
Deposit: The amount paid to exchange contracts which are only refundable in exceptional circumstances. Contracts provide for 10% of the purchase/sale price but can often be negotiated to a lower level.
Disbursements: Out-of-pocket expenses paid by the solicitor/licensed conveyancer on the buyer's behalf, such as stamp duty, land registry charges and search fees.
Easement: A right given to the house owner over an adjoining property (e.g. right of way).
EPC: Energy performance certificate- part of a home information pack.
Equity: This is what you actually own – the difference between the market value of your property and the amount of the loan you still owe to your lender.
Exchange of Contract: The point that both parties are committed to the transaction.
Fixtures and Fittings: A list of the items at the property, which are either included or excluded from the agreed price.
Flexible Mortgage: Mortgages that are flexible in terms of how you pay the loan back.
Freehold: One of the two current tenures of land recognised by English law. This recognises the whole of the land not just a building.
FSA: The Financial Services Authority (FSA) is an independent body responsible for the regulation of financial services in the UK.
Gazumping: When the house seller accepts a higher price offer from another house buyer after the initial offer has been accepted.
Indemnity Insurance: An insurance taken out by conveyancing firms to cover losses to clients arising from errors or fraud in dealing with their matters.
Land Registry Fees: Fees paid by your conveyancing lawyer on the buyer's behalf to register the ownership of property with the Land Registry.
Land Registry: A government office that stores records of land ownership and any charges, like a mortgage.
Leasehold: The second current tenure of land recognised by English law. This is over a term of years and not unlimited. There will be a Landlord who will own the freehold. This usually relates to a flat or apartment.
Licensed Conveyancer: A licensed conveyancer is a specialist property lawyer, someone who is trained and qualified in all aspects of the law dealing with property. Licensed conveyancers are sufficient to secure adequate protection for consumers and that the conveyancing services provided by such persons are provided both economically and efficiently.
Mortgage: Money borrowed from a lender (usually a bank or building society) to buy the property. The borrower agrees to use his or her property as security against the loan until it is paid back.
Mortgage Deed: The legal agreement that gives the lender a legal right to property.
Mortgage Fees: Fees payable to a lender in connection with arranging a mortgage.
Redemption Fee: An Early Repayment Charge which can be charged by your existing mortgage lender if you pay off your mortgage early or you move to a different mortgage.
Searches: A method of checking matters that may affect the value of the property. The only obligatory one before exchange is a Local Authority Search which covers items such as road maintenance and planning applications. The search covers the property not the surrounding area.
Stamp Duty: This is a tax which may be paid by you when you buy a property worth £125,001 or more (£150,000 in some areas or £250,000 if you are a first time buyer). The amount you pay will depend on the value of the property you’re buying and your circumstances
Survey: A report produced by a building surveyor for the purpose of determining the value of the property and if it is structurally sounds.
Transfer Document: The final document that transfers the property from the house seller to the house buyer.
Valuation Survey:
