The moving process explained and hopefully made simple!
First, you will need to get your house valued by at least 4 different estate agents if you can. This is so you can get a varied view of what your house might be worth. Remember they are not always right with their valuations so go with the agent that believes in your home and will work for you to get the best price possible.
Some agents claim to be the number one agent in your area but this is because they undervalue houses to get quick sales so don’t be fooled by their marketing statistics. Even if you don’t decide to list your property, it’s always worth knowing how much your house is worth and the potential equity you have as this will help give you an idea of what you can work with in the future.
If you’re happy with the valuation and are thinking of moving, it’s now time to look at mortgage options to find out how much you can borrow/afford to pay each month – we use Gavin Burrows from Fifty Nine Financial. Although Gavin is based in the Midlands, it makes no difference as everything is done online and over the phone. It saves time as you don’t need to book a face-to-face visit and go back and forth with documentation. It can all be done online – it’s so much easier! I would certainly recommend Gavin to anyone looking for a pro-active mortgage advisor (we have known him for years!)
- How much can you actually borrow? – No matter if you are buying a house or remortgaging, you need to know how much you can realistically borrow on a mortgage as early as possible. Every mortgage lender is different in how they assess affordability. As a result, the amount you could potentially borrow on a mortgage can also vary dramatically from one lender to the next. A ‘whole of market’ mortgage broker will be able to advise you best.
- Credit profile – Most high street lenders want to see a good credit profile. There are many things that can affect your credit rating and we can often still help people with a poor credit rating even if you have had historical missed payments, defaults, CCJs, or worse we may still be able to help you get a mortgage. We’ve helped many people get mortgages that have previously been declined elsewhere, so it is important that you are applying to a lender that is likely to accept your application. Your broker will want to see a copy of your most recent credit report.
- Debt to income ratio – A lot of the people we speak to are totally unaware of the ‘debt to income ratio’. This is basically how much outstanding debt you have outstanding vs your total annual income. If you have £40,000 annual income and £20,000 outstanding on credit, this would be a 50% debt to income ratio as the credit balance is 50% of the income. If you have existing credit balances, such as car finance, loans, credit cards, etc, it’s important when applying for a mortgage you apply to a lender that will be ok with your existing level of borrowing. Some lenders will decline a mortgage application if the debt to income ratio is too high. Balloon payments on car finance agreements have been known to cause a few problems in this area. Every lender is different, it’s essential to apply to the ones that will be comfortable with your outstanding credit, even if you plan on clearing it. Check your credit report for clarification of your overall credit balance.
- Supporting documents – Every mortgage applicant will need to provide ID. Passport and/or driving licence, current council tax bill or utility bill, along with your last 3 months bank statements and income verification. For employed people, this will be the last 3 months’ payslips and a P60 where one is available. If you’re self-employed, obtain your last 3 years’ tax calculation and tax overviews from your accountant where available. Most mortgage lenders want to see at least 2 years of self-employed accounts. However, we do work with a number of lenders that can consider a mortgage application once you have just 1-year self-employed accounts Your mortgage broker will be very pleased if you have all of these documents ready in advance.
- Quirky Properties – If there is anything unusual about the property it can make getting a mortgage difficult. Examples could be steel-framed properties, prefabricated properties, or houses that are positioned in close proximity to commercial property. It is possible to mortgage properties like this, but you really need to understand which mortgage lenders can accept those types of property and which lenders cannot to avoid disappointment.
There are always other considerations depending on personal circumstances. If you require any help with any of these things, get in touch for a chat about your situation and Gavin will be on hand to help.
Now you know what you can borrow, it’s time to instruct an Estate Agent to sell your house and find a house either through online property sites like Right Move or you can go old school and register with estate agents directly in the areas you are looking, however, you might find you will just get sent loads of emails of properties, none of which ever seem to match your criteria so check all the online sites is our recommendation as they tend to appear on here first.
Once you have an offer accepted on your property and have agreed on a sale price on a purchase it is time to start the moving process and select a Solicitor/Conveyancer who will legally manage the sale and purchase on your behalf. To reduce any delays to the process, it is best to have your solicitor chosen before choosing your Estate Agent. Having a good Solicitor is key if you’re going to ensure a smooth (as possible) transaction! We instructed Jonathon Waterhouse from Setfords Solicitors after hearing great reviews about him on Instagram. Although Jonny wasn’t the cheapest quote we received, he was the fastest to respond and called us a day after he sent his email to check if we had everything we needed from him – this made me believe he would be pro-active and get on the phone if needed and not hide behind email. Jonny also likes to undertake a bit of DIY in his spare time and you can follow him on Instagram here – Number One Redwood.
- On a sale, get your paperwork in order. The quicker the better. Don’t wait for the sale to be agreed upon and get a head start.
- If you have undertaken any extensions or alterations, locate the compliance documentation, planning permissions, building regulations approvals, and completion certificates. Get them organised and ready for your solicitor.
- Understand the extent of your chain. Any single transaction is only as good as the related transactions. The longer the chain, the more parties to co-ordinate.
- Be flexible. The longer the chain, the more parties to accommodate.
- Keep in regular contact with your solicitor to ensure matters are progressing well. Whilst keeping in regular contact, give your solicitor and the solicitors in your chain to progress matters and be mindful of delays outside of their control, for example with property search results, referrals to lenders, and specialist reports.
Once you have instructed your solicitor, they will create their terms of engagement with you, detailing their fees and the upfront deposits required to move forward at this stage.
Next, you will receive something called a ‘Memorandum of Sale’ from both the estate agent you’re buying and selling through. This confirms your instructions to sell/buy from the agreed person and any other conditions (or extras such as furniture etc). This is normally the first time some from the sales progression team from the estate agents will get in contact with you and who will be your main point of contact moving forward.
In our case, it was the Oven, Fridge Freezer, and some other items not normally agreed as part of your sale such as the ceiling lights in the house. Your solicitor will then use this information that you provide to draw up draft contracts that are sent to you as a buyer or to your seller for approval. Your solicitor will review these contracts with you and start to raise any enquiries with your seller’s solicitor should any arise.
Next up is Property Searches! Your solicitor will request a set of legal searches to ensure there are no skeletons in the closet, as an example, ‘local authority’ searches which ensure things like motorways are not planned to be built next to your beautiful house you are buying! These seem like a pointless (and expensive) exercise however these are actually a really important part of the process and can take some time to come through so you will need to be patient during this stage.
If you require a mortgage on the property you are buying then you will need to ensure you get the offer in writing (your mortgage broker will send this directly to your solicitor once agreed) and have a valuation conducted on the property. The fees for this can be included in the overall mortgage fees so you won’t need to pay it upfront, some mortgage companies even offer this for free so it’s worth talking to your mortgage advisor to see what the best deals are for you. Deals change all the time so you’re not bound by the first mortgage offer you submit to your solicitor. The product in our mortgage offer actually changed 3 times during the process. This was because Gavin from Fifty Nine Financial was able to update our offer with a new improved mortgage product each time. We also needed to get an offer agreed upon quickly. But with COVID holding things up, this looked like this might be a challenge with most lenders wanting to conduct surveys on the house in person. Thankfully Gavin knew which lender could carry out a remote ‘desktop valuation’ and amazingly we received a mortgage offer the same day that our mortgage application was submitted!
You can do this earlier if you wish, but you proceed at risk as there is no guarantee you will get your mortgage in principle turned into a mortgage offer, so something to be aware of. You could end up paying for a survey on a house you won’t actually buy.
A house survey is normally conducted by a chartered surveyor who visits the property and prepares a report outline any problems the property may have. There are three types of surveys you can have on a property, these are:
• Level One – called a condition report which reviews the properties current condition and includes any risks, potential legal issues, and urgent defects
• Level Two – called a Homebuyer Report which includes all of the features from a Condition Report plus providing additional information such as advice on repairs and maintenance and will also in some cases include a market valuation on the property you are buying as an additional service.
• Level Three – A more in-depth look at the properties condition with advice on defects and repairs and how to maintain the property. This level of survey is normally required in older properties and houses in poor condition.
We chose The Hopps Partnership based on reviews and recommendations and their surveys were very competitively priced.
- Under most circumstances, a house will be the biggest single investment you have made in your life. You must make sure that the investment is worth it.
- Most houses and flats aren’t new. This means that they are second/third/tenth hand and as such don’t come with a guarantee. A surveyor will make sure that the house doesn’t have any hidden defects.
- When you buy a house, the rule of thumb is ‘caveat emptor’ or buyer beware. If a seller sells the house and tells you there are no problems and when you move in and there are serious concerns you have no legal recourse to the seller. You MUST satisfy yourself that the house has no hidden defects and not take anyone’s word on it.
- If a surveyor misses something big you DO have legal recourse to that surveyor. You can rely on surveyors insurance which will normally be in the region of £1m for each and every claim. Ask for a copy of this insurance before you proceed.
- If defects are found by the survey, you can normally re-negotiate the price down to reflect the defects. An agent will normally aim to sell a property for as much as they can, as will the seller. Sometimes defects are not factored into the price and the survey will let you reduce the price legitimately.
Once you are happy with the points raised in your survey (or not in our case due to leaks Robert found in the roof) then you can continue to proceed to the exchange of contracts. Before you exchange you will need to discuss with your solicitor all the enquiries that have been raised and agree on those, ensuring all fixtures and fittings included in the sale are what you expected them to be. You can now agree on a completion date between the two parties. The time between exchange and completion can vary so always speak to your solicitor about this and take on board their advice as they are working in your best interests. It might not always be what you want to hear but it’s important you understand some of the scenarios that could play out so you are prepared. Before exchange of contracts can take place, you will require building insurance on your new home. You are responsible for the property as soon as contracts have been exchanged so this is vitally important to have this in place. Some insurance companies will offer 60 days free of charge so you have time to move so it is worth checking with your current insurer.
Luckily in our case, it was only a small chain so went (fairly) smoothly.
Once you have exchanged you are in a legally binding contract to buy the property so no going back now. It’s time to focus on moving day and getting organised. Jon Paul from JP Life & Loves has a great blog post about moving tips you can read here.
With your completion day agreed in advance you should also agree on a time with all parties in when to move in – normally the rule of thumb is set at midday. You must remember though that keys can only be handed out once your solicitor (or your seller’s solicitor) has confirmed that they have received all the monies. Once this happens, you can collect the keys and move into your new home! See, as simple as that (ok not that simple but hopefully a bit clearer!)
We hope you found this blog post helpful, we would love to hear your thoughts and any advice you would like to share from your experiences in the comments section below.
Brilliant blog. Really informative.