Steps in buying a home
Step 1 – Budget
Step 2 – Location
For many people, the location of the home is the most important consideration.
- Do you need to be in a particular school district, or close to a job, bus line, or childcare facility?
- If you are willing to travel some distance to work, you may be able to find a home for less money.
Step 3 – Property particulars and viewing
- The estate agent will arrange for you to view the property, by agreement with the owner who may be there to answer any questions you may have.
Step 4 – Making an offer
- The asking price may be pitched higher than the owner expects to get, and they would normally expect the buyer to bargain over the price.
- Offers can be subject to surveys – see step 5 – and subject to finance – see step 6.
Step 5 – Surveys and valuations
- The mortgage lender will need to inspect the property, to get a valuation for their purposes.
- It is usually wise, however, for the buyer to get a full buyer’s survey which will give more detail about the property such as structural problems etc. This may be expensive but could save you money in the future.
Step 6 – Getting the funds
A deposit, usually at least 10%-30% of the price, is needed when contracts are exchanged.
For the remainder, unless you have the money available
- You would have to be in possession of a valid offer from a mortgage lender.
- Some lenders will issue you with a certificate and agree in advance a sum they are prepared to lend you based on your income.
Step 7 – Legal Advice
It is in most cases essential to get a solicitor to take care of the legal procedures. One of the most important legal details is the title of the property. This may be freehold or leasehold.
Freehold means that the owner has full-unrestricted ownership, with the right to sell the property. Most houses and bungalows are freehold.
Leasehold means that the owner has the property for a restricted time only — (usually up to 100 years).
Step 8 – Exchange contracts
When all the legal formalities are carried out satisfactorily, you are ready to exchange contracts. At this stage, things such as what items are being left in the house are agreed (e.g. carpets, curtains etc).
Step 9 – Completion
A date is agreed for completion of the contracts when the lender will hand over the money, and the seller will hand over the keys. You may move into the house at any time from that date.
Investing in a property.
Investing in property is one of the most popular ways to make money in the UK.
Many people choose to buy a home in order to update it and sell it for considerably more than the value they bought it at, whether that is a long term plan or a quick business plan. This is one of the most popular ways to invest in property.
Property Development is another way that people invest in property. Developing a property is more simple than you would think.
All you need to do is to apply for residential development finance from a development finance company which funds the construction of residential property on the land you own.
The most popular way to invest in property is to buy to rent. It is becoming more and more common that people have a landlord role on the side of their usual job. This is a great way to earn some extra money through property investment. Read more