The Buying Process

How much can you afford?

When looking for a property, the first thing you need to do is decide how much you can afford. There are a number of different financial institutions which offer loans to people buying a property, for example, building societies and banks.

You can either contact the bank or building society directly or you can use a Financial Adivisor. You should always check with the Financial Services Authority that the advisor is authorised before going any further. You can do this by calling 020 7066 5256 or by visiting www.fsa.gov.uk/register.

Some building societies now provide buyers with a certificate that states that a loan will be available provided the property is satisfactory. You may be able to get this certificate before you start looking for a property. Building societies state that this certificate may help you to have your offer accepted by the seller.

1. Making an offer

When you decide you would like to buy a particular property you do not necessarily have to pay the price being asked for it by the owners. You can offer less if, for example, you think there are repairs to be done which will cost money.

If the property is being sold through an estate agent, you should tell the estate agent what you are prepared to pay for the property. The estate agent will then put this offer to the owners. If the owners do not accept the first offer put to them by you, you can decide to make an increased offer. There is no limit on the number of times you can make offers on a property. If you make a written offer it will always be made subject to contract. This means that you will not be committed to the purchase before finding out more about the state of the property. If you make an oral offer this is never legally binding.

2. When the offer has been accepted

If you have not already begun to arrange a mortgage, you should start to do this now. Whoever agrees to lend the money will want to have the property valued. This is to make sure that the lender could get the loan back if for any reason you stopped paying your mortgage and the house had to be sold again. The valuation will be done by a surveyor on behalf of the lender but you will have to pay for this valuation. The fee will be payable in advance, usually when you send a completed mortgage application form to the lender.

3. Appointing a solicitor (conveyancer)

Conveyancing is the legal work involved in buying and selling a property. It would normally be done either by a solicitor or a licenced conveyancer. Make sure you choose a good one. The best bet is word of mouth recommendations.

Whether you are buying privately or through an estate agent, you will need to appoint a conveyancer. The estate agent may be able to offer some recommendations.

Conveyancing involves;

• Checking with the Land Registry that the seller is the real owner and actually allowed to sell you the property;
• Carrying out a "local authority search" to see whether there is anything you should be aware of - like the motorway they'll be "rolling out" at bottom of the garden;
• Checking the lease from where they'll get information about any service charges or special conditions you have to comply with.
  
• Checking that there are no land disputes affecting the property.

4. References

The Landlord may request at least one of the following:

• Previous Landlord reference
• Employment reference
• Status Enquiry
  A status enquiry is a request for a bank's opinion as to a particular customer's ability to meet a given financial transaction or commitment. A bank's reply to a status enquiry will typically be in the form of an opinion. It will be based on what the account-holding branch knows about the customer in question, drawing on its own records. A reply is not, and is not intended to be, a definitive pronouncement on a customer's financial well-being. This is because the customer may have other accounts, assets or liabilities which the account-holding branch does not know about.
• Credit Check
  This tenant screening report provides a risk profile score based on an analysis of historical tenant data including CCJs, credit history, where and who the tenant has been living with, and their overall traceability. The score returned is placed in context of risk categories ranging from higher to lower risk, each risk category identifies the probability of failure e.g. of defaulting on rental payments. Please note that the Bronze tenant check report only provides a risk score, it does not return any details found from searches of CCJs, Insolvency Bankruptcy and Electoral Register.
  www.credit-check-services.co.uk
  www.rla.org.uk

5. Exchange of contracts

The final contract between you and the seller is prepared when:

• the solicitor (or licensed conveyancer) and you are satisfied with the final outcome of all the enquiries
• any surveyor's report has been received and any necessary action taken
• the formal mortgage offer has been received
• arrangements about the payment of the deposit have been made
• the date of completion has been agreed.

You and the seller each have a copy of the final contract which you must sign. These signed contracts are then exchanged. At exchange of contracts both you and the seller are legally bound by the contract and the sale of the house has to go ahead. If you pull out, you will lose your deposit.

6. Completion

Completion normally takes place a few days or a few weeks (depending on the personal requirements of the buyer and seller) after exchange of contracts

On the day agreed for completion

• the mortgage lender releases the money
• the deeds to the property are handed over to your solicitor or licensed conveyancer
• the seller must hand over the keys and leave the property by an agreed time.

Now the property is yours!