Whether you’re a first-time buyer or simply moving to a new house, finding a new home can be tricky. From deposits to estate agents to mortgages, here’s all the info you need on getting a new home.
Buying a home can be a lengthy process. Whether you’re a first-time buyer or simply moving house, finding the right home at the right price is difficult. Then comes the paperwork, and all the fees along with it, it all adds up. With the removal of stamp duty in the UK, the housing game has changed. So, if you’re looking for some helpful advice along the way, this guide is here to help you out. Outlining the steps to buying a house, everything you need to know from fees to estate agents. Here’s a step by step guide to buying a house.
- The Costs – First Time vs. Moving to A New House
If you’re looking to move to a new house, you’ve probably already got your own property and mortgage set up. But, moving to a new house can be just as complicated as buying your first one.
First Time – You’ll need to gather a deposit for a house to qualify for a mortgage. Deposits are normally around 5% of your desired properties value. So, for a £200,000 home, you’ll need a £10,000 deposit, meaning the lender would lend you the other 95% of the property’s value. However, the more deposit you save the better rate you can get on mortgages. Stamp duty is now on applicable for properties of over £300,000 (and sits at 5% on properties ranging from £300,001 – £500,000).
Moving – If you’re moving to a new house, you may either be aiming for the same size property, or a slightly bigger one. Although you may not need a deposit, but there are some costs for buying a house. Surveyor fees, valuation fees (although some estate agents offer a free home valuation), estate agent fees, removal costs etc. It all adds up, making buying and selling just as costly as being a first-time buyer.
So, if you’re a first-time buyer, the challenge is accumulating a deposit for a house. The usual amount is around 5%, however the more you save the move you save on mortgages. You’ll receive better rates on borrowing the rest if you can save more than the average amount. The costs that arise from moving from your current house to a new property is the charges you incur. Fees for legal and estate agents, can be up to as much as a deposit on a new home. However, there are charges for first-time buyers and movers too. Surveyor and legal fees to name a few.
Money saving tips for buying a house: First time buyers can save up more than average for their deposit to get fairer mortgage rates | Some estate agents will offer free valuation of your property which can slight lower the costs of moving.
Step 1 – SAVE and PREPARE to spend
- Finding the right one
Next comes the search. Searching for the right house can take forever, or can be love at first sight. But, before you begin looking – lay out your budget. Don’t set yourself up to fail by looking a t a beautiful home without looking at the price. You’ll only feel disheartened when you can’t afford it. Make a list of things that are important/essential to you. Size, area, garden – everyone looking for a home has something different at the top of their list. So, have a clear image of what you’re looking for.
If you’re selling as well as buying, now is the time to look for an estate agent. You need to find one that is affordable, reliable and professional. You want them to be on the ball with selling your home. Selling a house can take a good amount of time between purchase and completion, so get your house on the market ASAP. Some estate agents will offer a free home valuation, so it’s good to get a few quotes from different estate agents to gauge how much you’ll be spending. Be wary that some estate agents may over value your home, in order to get you to sell it with them. It’s a clever tactic, they’ll quote you a high price to draw you in, then after months of not selling, suggest that you reduce your asking price. If you look around for a fair valuation, and receive a second and third opinion, you’ll be able to pin point what your house is worth on the current market.
The same goes for you first-time buyers! Like when you look for your mortgage, you need to find the right property for your first big purchase. Remember, this is an investment. Not only is this somewhere for you to live, but you could profit from it. You can grow the value of your home over the years, and potentially make money off it if you sell in the future – when you’re ready to upgrade to a bigger home.
Step 2 – SHOP AROUND, the right home and estate agent is out there – just take your time looking for it/them!
- From ‘For Sale’ to SOLD
To sell or not to sell, that is the question. Once you’ve found your ideal estate agent and dream home, now comes the paperwork and the fees. But for the movers out there, there is another question in their mind. Yes, is it best to sell or buy first? The answer is simple – sell. Selling your home before you purchase you new property isn’t the end of the world, it has its advantages. You are in a far better position to buy if you have already sold your home. You’ve kickstarted the ‘buying chain’. You have a buyer for your house, and whatever home you choose will have a buyer for their house, and so on. See if you find a house and buy it, but then you can’t sell your own, you’re blocking the flow of people buying and selling – not only holding up your moving home, but everyone else in the chain. Also, you’re in a better position financially if you’ve sold first. Selling a home before you buy means that you won’t be compensating for not selling by over paying on house offers. This leads nicely to…
How to make an offer. Yes, making an offer on a house is the next big part of getting from For Sale, to Sold. But how do you avoid over paying? RESEARCH. Do some detective like work into the housing market and see what your desired property is actually worth. As mentioned before, estate agents can sometimes be sneaky, adding extra value to a house in order to rope someone in to sell with them, so be wary. Compare your ideal home to others in the same area, that are the same price. Look at aspects like, age, number of bedrooms, position and garden size. Consider also what could add value to a property, is it in the catchment area for a good school? Does it have desirable transport links? etc. Think about things that could devalue a home too, local crime rates, noisy roads, etc. Always do your homework before you put in an offer.
Put in your bid. When the work is done, and it comes to placing your offer, think about how much you’d be comfortable paying for it. The price of a home is an estimate but also what the seller is happy with selling it for. Think about your maximum bid you’d be willing to put in and what the house is worth. Then, if there’s ‘wiggle room’, aim 10% lower. Putting in a slightly lower offer than you’d be willing to pay, may haggle the seller down to the price you would actually pay. Chances are they are looking to sell their home relatively quickly, they may have found their ideal house and be stuck in a buying chain, with no one to buy their home – slowing the process for everyone else. Keep your fingers crossed. If everything goes to plan, your offer could be accepted! Then comes the next step.
Step 3 – RESEARCH and NEGOTIATE
- Essential Extras
After your offer has been accepted, send in a surveyor to carry out a property survey. These industry experts can spot everything you need to know before you move into your new home. Pinpointing any problems, the house might have or anything that means the asking price was too high. Hidden things, that could detract value from the house, that you didn’t notice when looking around. These services will cost you, but its all factored in to the cost of buying a house and it’s an essential to know exactly what you’re getting when you move in.
A survey helps you gauge the value and condition of the property before you pour your money a huge purchase. While it may seem like an inconvenience when you’re already paying out for a house, it actually is one of the most important things you can do before signing anything and agreeing to buy. Remember to factor solicitor’s fees too. A standard ‘receipt’ from a solicitor will include, stamp duty tax (if applicable), mortgage fees, estate agent’s fees (selling your home) and solicitor’s charges too. This is integral part of the final stage of exchange and completion.
Step 4 – Remember the FEES and ESSENTIALS
- Done and Dusted
Once all the paper works done, and all the fees paid, now comes the time to move in to your new home! Moving to a new house is a long process, but the pay off when you step into your new home is an indescribable feeling. Remember costs of moving services and if you’re a first-time buyer, furnishing your new home.
And that’s it! Remember this step by step guide, when it comes to buying a home.
Step 1 – Remember the costs included. Make sure you’re in the right financial position to sell/move
Step 2 – Search for the right estate agent and the right home.
Step 3 – Do your homework and prepare to negotiate.
Step 4 – The fees of exchange and completion.
Step 5 – Move in and enjoy!
Hugh Sallows is a Content Marketing Executive at Revive Digital. Writing content for magazines, blogs and websites, Hugh has an extensive history in writing. Hugh is currently researching and writing about Real Estate, specifically working on buying and selling houses.