Buying a home is a milestone that many people are working towards and looking forward to. But while getting the keys to your new home is a monumental step for first-time buyers, the process of buying a home isn’t entirely straightforward and if you don’t know what you’re doing, it can be quite stressful.
From the initial search for a property to finalizing the sale, buying a home involves many different steps, which can make the whole process quite lengthy. Besides the price of your home, there are also a number of hidden additional costs that new house hunters need to consider.
Having a rough expectation of how the process will work will therefore make the journey much easier. The co-founders of Stipendium have put together a comprehensive guide that takes a look at the average costs and timelines of buying a home – while providing tips to make it easier, faster and more affordable.
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Find a property
The time it takes to find a property depends entirely on what you are looking for, what is available on the market and how quickly you find your dream home. Stipendium co-founder John Bohan says it can take anywhere from four to 36 weeks to find a property.
“To speed up the process, it’s best if buyers are well prepared and have a good understanding of what they can afford in the area of their choice. This helps weed out many potential properties very quickly,” a- he declared.
“However, a lead time of one to eight months seems to be the norm, although it’s important to note that current market conditions are far from normal and homes are flying off the shelves at an incredible rate.” This means that while you may act far sooner to secure a property, you may also find that this lack of inventory means you have to wait much longer for your ideal home to turn up.”
Make an offer and get it accepted
Making an offer on a property you like is quick and easy, but the time it takes for it to be accepted may vary due to negotiation. On average, this part of the process usually takes between a day and two weeks.
“Sellers often want to negotiate to push a buyer’s original offer up and then the buyer will want to push it down again, and so the negotiation process continues,” John said.
“To speed things up, buyers should follow the advice of a good estate agent who will know what a reasonable and realistic offer is and whether the seller is likely to accept it on the first try.
“To reduce this delay, buyers need to make sure they get a mortgage that is agreed in principle. This means a lender is willing to say that in principle they are happy to lend the money needed. For sellers , this is very interesting because it means that there is less chance that the sale will fail and the process should move more quickly.”
Setting up your mortgage
Approval in principle of a mortgage usually allows it to be turned into a mortgage contract much more quickly once the offer has been accepted. This can often take two to eight weeks to set up. “It’s by far the best way to speed up that part of the journey. The costs associated with setting up a mortgage are usually around £1,500,” John said.
Assignment and appraisals
Many legal processes must be completed before a home sale can be completed. This involves hiring a solicitor or real estate notary to perform essential tasks such as researching and drafting contracts. This part of the process usually takes between a month and 12 weeks and can cost up to around £3,000.
“It can be a very long process, often the longest leg of the journey, especially when the housing market is particularly busy,” says John. “Making sure a good lawyer is hired can help speed it up, as can being proactive and starting the process early rather than waiting until the last minute.
“Inquiries are essential to the buying process. The mortgage provider will want to conduct their own investigation to ensure the property is in the condition described by the seller. And the buyer should engage a licensed surveyor to make sure make sure there are no structural issues with the home that the seller hasn’t discussed.
“If any issues are identified, the seller and buyer can negotiate the price in light of these findings. To expedite the process, buyers should order surveys as soon as they can, booking their expert well at hand. advance to avoid being at the back of a long waiting list.”
Exchange of contracts
Once all legal processes, investigations and mortgage agreements are completed, you can then trade contracts. This usually happens about two weeks before completion and will be handled by each party’s lawyers. It usually takes between two and four weeks.
Once all the above processes are complete, you are almost ready to move in. But before that, you need to make sure you’ve paid any required property tax, which can take up to two weeks. If your first home is over £300,000 you will have to pay a stamp duty bill which is between 5 and 12% of the purchase price. First-time buyers buying a home for less than £300,000 will not have to pay stamp duty.
Overall, the average time the home buying process takes from initial search to move-in is around eight to nine months, with additional costs of up to £8,500.