Acquiring your first home is a huge undertaking that can cause a lot of worry.
Do you know the definition of the term “gazumping,” for instance? How well versed are you in the meanings of “stamp duty” and “mortgage deeds”? One in six Americans apparently have no idea what they’re doing when it comes to purchasing a home, according to a new survey released this week.
According to a study by property law experts Slater and Gordon, a concerning number of people are clueless when it comes to taking their first steps onto the property ladder.
The company stressed the importance of buyers understanding their rights and the buying process, particularly first-time buyers.
“Real estate transactions can be complex, time-consuming, and financially burdensome. A sale can be delayed, the buyer’s expenses can rise, and there may be future problems if the buyer doesn’t get proper legal guidance.
With no further ado, then…
How to Buy a House: A Step-by-Step Guide
Determine your financial limits
Purchase-related expenses, like those for a survey, mortgage, and stamp tax, should be figured in as well.
Plan on putting down 10% of the property’s acquisition price as a down payment, or 5% if you intend to use the government’s Help To Buy program.
Keep in mind that you may be required to pay ground rent and a service fee for the upkeep of your apartment building or development if you purchase a leasehold property like a flat.
This article will walk you through the process of purchasing a home in Leicester
Submit an Application for an Initial Mortgage Loan Agreement
An institution that provides loans, like a bank or credit union, will use the data you provide to conduct a background check and assign you a number based on that. They will then determine an amount that they are, “in principle,” ready to loan. To find a home is the next step in your journey.
Look for your ideal property and make an offer
As soon as your offer is approved, you should apply for a mortgage and hire a conveyancer. During the purchasing procedure, you will need the assistance of a conveyancer, who is an expert in property law.
Start the process of surveying the land
Lender criteria, the property’s age and type, and your own personal preferences will all play a role in determining the type of survey you ultimately commission. HomeBuyer Reports are surveys best used for standard homes that are in decent shape. Average prices begin around £400.
Any house, especially one that is older or of non-standard construction, would benefit from a Building or Full-structural Survey. A comprehensive study like this can cost upwards of £600, but it will provide invaluable insight into what needs fixing.
Once the transaction has been agreed upon, your conveyancer will take over and conduct the necessary searches. The conveyancer will contact the seller’s solicitors to obtain the written contract and ask any pertinent questions.
Put pen to paper and trade agreements
Once everything is settled with the property, your conveyancer will have you sign a stack of paperwork, including the sales contract, the transfer, the stamp duty land tax return, and the mortgage deed, if relevant. Once both the buyer’s and seller’s attorneys have signed contracts and a completion date has been agreed upon, the parties will trade contracts.
The transaction is binding and the deposit is due upon contract exchange.
Congratulations! You hold the ace in the hole
The acquisition is typically finalized within four weeks of the contracts being exchanged. Once the mortgage company distributes the funds, the property transfer is finalized.
Once the transition has been recorded, the buyer’s attorney will file the Stamp Duty Land Tax return. Next, the Land Registry will be updated to reflect the new owner.
Why do we have to pay stamp duty?
It’s a one-time payment levied on the purchase of any real estate above a certain price threshold. Prices determine the interest rate.
Until £125,000: Nothing
From £125,001 up to £250,000 (the following £125,000): 2%
What’s left, £675,000 (from £250,001 to £925,000): 5%
Five hundred seventy-five thousand pounds (the remainder, between £925,001 and £1.5 million): 10%
For the balance (anything over £1.5 million), add 12%.
Jargon-buster
If a seller agrees to an oral offer from a buyer but then takes a higher offer from another buyer, the transaction is known as “gazumping.”
For some individuals, moving into a new home could be delayed if they had to wait for the sale or purchase of another home in the “chain.”
A contract is a formal agreement outlining the terms of a real estate transaction.
Deeds are official documents that specify the current owner of a piece of land and the new owner’s name. Conveyancing is another name for this.
Sales of domestic property valued at more than £125,000 are subject to stamp duty, a tax levied by the government.
A survey is a report on the property’s physical condition at the time of purchase, used to confirm the absence of major flaws in the home you’re looking to purchase.