So, you’ve found a property that ticks all (or most of) the boxes and it even comes in roughly on budget, congratulations! But now comes the scary part, putting in an offer and parting with the most significant amount of money you are ever likely to spend. So how do you go about securing your dream home?
Whilst you can make an offer on a property at any time, to be able to make a serious offer and present yourself as a favourable buyer you will need to show that you actually have the money in place to purchase the property to the vendor’s timescales.
To have the best chance of making a successful offer on a property, follow the steps below.
Work out how much it is going to cost you overall to buy a new home
The cost of moving home is so much more than just the property price. You will also need to factor in legal fees for your conveyancer, taxes like stamp duty, the cost of surveys, local searches, removal costs and more.
The average cost for moving home in the UK is nearly £9,000 according to Barclays. Make sure you factor this in when working out your budget for a new property, so you don’t fall short.
Have your deposit in place
Whilst it is possible to get a mortgage with a 5% deposit, especially since the Government introduced their new mortgage guarantee scheme in March 2021, most lenders prefer a buyer to have a deposit of around 10% of the total purchase price since you are then considered a lower risk in terms of repayments. So, for a property costing £250,000 you will need to find £25,000 for your deposit.
The higher your deposit overall, the more favourable the repayment and interest rates will be.
Find a mortgage lender and prepare your paperwork for application
Speak to a mortgage broker or find you own mortgage deal and get the ball rolling with lenders so you have a good idea of how much you can borrow and where to get the best mortgage rates for your personal circumstances.
Whilst we wouldn’t advise actually applying for a mortgage until you have found a property you like – since mortgage offers are only valid for a set time and it can affect your credit rating to keep reapplying – you can certainly get the ball rolling by having all of your paperwork in place.
It is also helpful to check your credit score and make sure your current account looks as healthy as possible for the last 6 months or so. Review your spending and see if there are any regular expenses like gym or club memberships that you can press pause on or ways to cut back overall before the lender starts to review your finances.
When your offer has been accepted, a mortgage lender can provide a mortgage in principle fairly quickly to show the vendor that you are in a good position to buy.
Find a conveyancer
If you haven’t already done so, now is also the time to find a conveyancer to assist you with the purchase.
It is the conveyancer’s job to draw up contracts, provide legal advice, carry out local searches, liaise with the Land Registry, transfer the purchase fee and ensure that legal ownership of the property moves from the vendor to the buyer.
You are not legally required to instruct a solicitor or conveyancer to buy a property if you have extensive experience in the process yourself, however our article The Ultimate Guide to Conveyancing explains the reasons why you really should!
The offer
When it comes time to actually make your offer, don’t be afraid to haggle on the asking price, especially if you are in a strong position where you don’t have a chain, can move fairly quickly and the property has been on the market for some time. An offer of around 5-10% less than the asking price is generally acceptable depending on the local property market. Make sure you have done some research to see what similarly sized properties have sold for in the local area in recent months.
If the buyer has marketed their property as “offers in the region of” this suggests a degree of flexibility and properties marketed as “offers in excess of” tells you that the vendor is looking for more than the listed price. Although of course a property is only worth as much as someone is willing to pay for it so do your research and offer a price which you think is fair.
Your offer price is not legally binding until you exchange contracts and it is normal to adjust the offer price if the results of your survey show any structural problems or issues with the condition of the property that did not come to light in your initial viewing(s).
When it comes to buying a flat, always ensure that you are aware of any on-going costs for maintenance to communal areas and grounds before you make an offer since you will need to factor this in to your regular outgoings alongside mortgage payments. Indeed, may flats are sold on a leasehold basis, which means you may need to pay to renew the lease at some stage or be subject to regular or adhoc costs for things like ground rent or maintenance as part of your lease requirements. It is always worth investigating whether or not you can also purchase the freehold to a leasehold property as part of the sale.
When it comes to how long you can expect the process to take from making an offer to collecting the keys to your new home, this will usually be around 6-12 weeks for an uncomplicated property transaction. If you are buying as part of a chain, where the purchase of your new property is dependent on someone buying your current home and/or your vendor’s purchase of another property and so on, the sale can take anywhere in the region of 6 months depending on the complexity of the chain.
