From Bottleneck.org
Well, now it's all over, this page is a bit of a mess! What I'll do is leave this "stream of consciousness" log on this page, but shortly I'll provide a few quick links to some summary pages.
This page is intended to be a log of what happened when we bought our first house, I hope it's useful to anyone else who doesn't know quite what to expect. Nothing on this page should be considered financial or any other form of advice - I'm not qualified to give such advice!
I know it's a bit of a brain dump at the moment, when the entire process is over, I might see if I can tidy it up into something more useful.
Getting a feel for it
To start with, before I had any serious intention of buying in the near future, I started keeping an eye on the market. I registered with Rightmove and set up some automatic search criteria, so that they would email me with any properties of interest as they become available. That allowed me to get an idea for what sort of things come up, in what areas, and at what sort of price.
I also started looking at what sort of mortgage I might be able to get, to give me an idea of my budget, and what the repayments might be. I found TheMarketplace to be useful for this. Obviously this only has a limited range of certain vendors' mortgages, and may not show the best deals, but I was only looking for ballparks at this point. There are probably better websites for this sort of thing.
I probably spent a good 6-8 months in this phase, but it's entirely up to when you feel ready to get on with it!
Getting more serious
The next step I took was to wander down to our local estate agents and register with them. They took a few details from us about the area we'd like to live, the sort of house we were looking for, and our budget, and put us on the list to be mailed as new properties came up. I'd say it's also worth retaining your Rightmove subscription, as the agents aren't always good at doing this quickly!
The agent also asked us about our situation, and being a first time buyer is helpful, as the vendors know that you can purchase without delays. It's also helpful to have a mortgage agreed in principle as you start too look at properties and that lead naturally to the next step.
Mortgage agreement in principle
Our estate agents offered us a couple of recommendations for financial advisors (though it's not strictly necessary to use one, I found it very easy - and free!) and we decided to go with one of their recommendations.
Many IFAs will normally cover the costs of advising you though comission earned on the products that they then sell you. In our case, having arranged a mortgage and related life insurance through the same IFA, we didn't have to pay anything to him.
The IFA sat us down and did an excellent job of answering a multitude of questions about the house-buying process as a whole, many of which I'm sure were outside his remit as a financial advisor! He collected some general information about us and our finances, we confirmed that we would be able to put down a 10% deposit, and then he did a series of calculations which cumulated in his suggestion for which mortgage we should take.
The next day, an agreement in principle was with us, which is essentially a document from a mortgage lender saying that they consider that they could lend us up to a certain maximum amount of money, and so too was a mortgage illustration document for the recommended mortgage, which detailed all of the costs and repayments.
The agreement in principle is very useful, as it gives the vendor confidence that you can back up any offer you make on their house, and it gives you a figure you can be confident of being able to get your hands on. The mortgage illustration is very important too - it convinces you that you can (or can't) afford the repayments!
From this point on, the IFA's advice was essentially to go out, look at houses, make offers, and let him know when an offer was accepted.
Viewing and Offering
From this point on, our job was basically to go and look around whatever comes on the market that took our fancy. Whenever we found something we wanted to see, either through web sites or the estate agents' mailings, we'd just call the appropriate agent and ask for a viewing. I tended to see things a couple of times before making an offer, and I always went in with what I considered a pretty cheeky offer. For example, I offered £215,000 on a house which was on the market at £229,950, and £208,000 on a house which was on the market for £220,000.
After a couple of months of looking, and offering, we finally got an offer accepted, and that's when things started to move a bit!
Offer Accepted, Mortgage Application
Once the offer was accepted, the estate agent pretty much immediately wanted our solictor's details. At this point, I hadn't arranged a solicitor, so I fell back on the old standby of emailing our IFA and asking him what to do!
He advised at that point that the next thing to do was get the mortgage application in, along with the life insurance application, as we're the sort of sensible people who want to protect ourselves! We arranged an appointment (all visits were to our home) and he worked through all of the paperwork on our behalf. We had to provide proof of identity, which in this case was a copy of a bank statement each (for proof of address), a copy of our passport or driving license each, and a copy of our latest payslip each. It was at this point that we also had to provide means to make our first actual outgoing payment - in this case it was the valuation fee of £375. This covers a basic valuation to satisfy the mortgage lender, but we wished to opt for a more comprehensive home-buyer's survey. This is noted on the application, and has an additional cost associated with it, which is paid to the surveyor at a later date.
The life insurance form was also completed, with an estimated cost for life cover and critical illness protection for both of us at £49 per month, however there was no payment to be made at that point, and this was not a confirmed amount, as some of the health and hobby answers we provided might require more investigation (basically I have slightly high blood pressure, and occasionally go caving!)
Our IFA was also good enough to recommend a solicitor we might want to use.
Getting the Solicitor
We gave the solicitor a call, told them our situation (well, their secretary, naturally!) and they suggested that they send us a quote. The quote broke down the fees for the solicitor (plus VAT), the various required searches, bank charges, and stamp duty. I won't list them right here, because I'd rather tell you as and when the money goes out, so the figures are accurate.
Having decided we could still afford it, we e-mailed the solicitor and told them our full names, address, and telephone numbers, plus details of the estate agency and IFA we were using, and they told us they'd send a letter of engagement for us to sign, along with various other information.
At this point, we passed details of our solicitor on to the estate agents and our financial advisor, for the purposes of the mortgage application.
Sales Memorandum
We received through the post a letter from our estate agency detailing who would be dealing with our purchase, and a Sales Memorandum which essentially gave the name and address of us, as buyers, our solicitors, the vendors, and their solicitors, along with the full address of the property we were buying, and the agreed price (£212,500 in our case).
In fact, there was an error on this document, as it only listed on of our names as the buyer (we are buying the house jointly), however the estate agents assured us that this wouldn't matter, and would be sorted out by the solicitors!
Contact from the Surveyor
The next thing that happened was we got a call from the surveyor. He said he'd been contacted by the mortgage lender and understood we would like a Homebuyer's Report rather than a basic survey. Having confirmed this, and the additional £295 cost (total £670 including the £375 already paid to the insurer), he asked how we'd like to complete the form and return payment - the options were fax and credit card, or letter and cheque. We opted for the latter, and awaited the letter.
Contact from the Mortgage Lender
The next letter to arrive was from the mortgage lender, asking us to confirm various details. One particular concern was a note suggesting that our solicitor of choice was not on the approved list of our lender, and therefore we would have to change solicitor, or pay the lender's solicitor's fees as well as our own. In our case, this proved to be a mistake, but it's something to bear in mind!
Contact from the Life Insurance
A letter also arrived from our life insurance provider, asking us to sign declarations to confirm all of the information we had given them was correct. We each received one of these seperately, for data protection reasons.
Contact from the Solicitor
A pack of information arrived from our solicitor, including full details of the costs involved, what work they would be doing on our behalf, and a letter of engagement which we needed to sign and return with proof of identity and address (passport and household bill).
Letter from the Surveyor
Finally, a letter from the surveyor, explaining the nature of a Homebuyer's report, and indicating that they would need a cheque for an additional £295 in order to progress a Homebuyer's survey. Form completed, along with all of the forms from the Solicitors, Life Insurers, and Mortgage Lender, cheques written (£240 to the Solicitor to pay for the searches in advance, as well as the £295 to the surveyor), and the whole lot posted today.
Also, today, ongoing chasing of the mortgage lender to get them to understand which solicitor we are using!
The Survey
The survey occurred today, though we've yet to hear anything more about it. Other than that, the solicitor issues seem to be resolved, but nothing much seems to be going on!
Mortgage Offer Issued
Apparently our mortgage offer has now been issued (though we've not received the paperwork yet), so I assume there was nothing wrong with the survey - we've not received the paperwork for that either!
The paperwork arrived the next day, along with a letter from our IFA telling us the life insurance paperwork was being delayed by a doctor's check.
Land Registry Search and Inventory
Next we received a letter from our solictior including a copy of the Land Registry plans indicating the boundaries of the property we're buying, and asking us to check them. The solicitor also asked for a cheque for a further £40 in order to do a Highways Agency search to ensure we have right of way across the footpath to the front door, and that this path is maintained by the local council.
Also included was a copy of the draft inventory from the sellers, which we were asked to check and approve - in fact there's only one minor error on it, so we'll get that tidied up in the response to the solicitor.
Response to the Solicitor
A letter was sent off to the solicitor confirming the boundaries as marked on the Land Registry plans, comment was made on the inventory, and a cheque enclosed as requested.
The Homebuyer's Report
The Homebuyer's Report arrived. This was basically a comb-bound booklet which essentially said the house was mostly fine. The things noted on the report were:
- The wiring should be checked by a qualified electrician (this is the sort of thing they ALWAYS say!)
- We should check that the central heating has been serviced recently
- One double glazed window unit had blown a seal
- There was a slightly high damp reading near the front door
- There was evidence of a small amount of water making its way in through a pitched rough over a boxed-out window
- There was evidence of a small amount of water making its way in where the heating flue passes through the roof
For the last three points the surveyor did note that the weather was particularly violent (gale force winds and driving rain) on the day he did the survey, and that might well account for the issues. He also suggested any required repairs would be trivial. The double glazed window had been noted when we viewed the property, and the estate agent had told us it would be fixed before we bought the house.
We decided to write to the solicitor asking them to confirm with the seller:
- That the central heating had been serviced within the last 12 months
- That they do indeed intend to repair the damaged glazing unit
Letter sent to Solicitor
The letter detailed above was sent to the solicitor. Christmas has been in the middle, hence the long delay.
We also got chased up today by the estate agent, as apparently the seller was hoping to complete within the next 20 days, in order to avoid another mortgage payment.
Life Insurance
Life insurance offer finally arrived, there were no extra clauses or changes to the original proposal, and the premium was £49.15 per month, to cover both of us for death or critical illness to the remaining value of the mortgage.
Contract
The contract has arrived, which basically includes a full report on all of the searches, copies of any additional enquiries, a copy of the contract, the mortgage deed, land registry forms, and stamp duty forms. We need to absorb all of this over the next few days before signing. We're also still waiting for the result of one search, and one enquiry.
The contract then got signed, along with the associated forms, and the signatures witnesses by a friend where applicable, and was returned (by recorded delivery!) to the solicitor, along with a cheque for the outstanding amounts. For your info, they were:
- Solicitors fees of £602.18 inclusive of VAT
- Local search £170.73
- Land registry search £5.16
- Land charges search £6.12
- Highways agency search £40.00
- Land registry registration fee £220
- Environmental search £37.60
In addition to this we had already paid:
- Local search £280.00
The remaining costs we sent with this cheque was for stamp duty, in our case 1% of the purchase price as our house was under £250,000, and a 10% deposit.
In the mean time, we've been chased pretty heavily by the estate agent for exchange and completion dates. Obviously, until all of the searches and enquiries are out of the way, we can't commit to any dates!
Arranging Exchange
A letter arrived from the solicitor arrived today clearing up the final points of enquiry, and suggesting that exchange could happen this week and asking me for my preference of completion date. There was also an indication from the seller that they wanted to complete prior to January 31st, but since this is now January 24th, that's not going to be possible. Unfortunately, the first date our solicitor thinks we can complete collides with a pre-existing holiday arrangement, so it will in fact have to be the week commencing 12th February!
So, I called the solicitor back and told them when I wish to complete, and I also went online and got some buildings and contents insurance for the new place, since I'm not sure when exchange will happen (cost £20 per month, roughly). Hopefully now they'll just get on with the exchange as soon as possible, so that we're all committed, and then we can just complete as soon as we're back in the UK.
All in all, we're about two months into the process, which apparently isn't unusual, especially given the delays over Christmas.
Called the solicitor again, and we exchange contract today, with completion for the first day we return after our holiday. We also contact our financial advisor, who arranged for our life insurance to start today, and made sure we had buildings insurance for the new house.
Completion
Finally, completion - on the day not a lot actually happens. First a call from our solicitor to tell us that they have passed the money to the other solicitors, then an hour or so later, a call from the estate agents to tell us they've been notified of completion and we can go and pick up the keys. So we did, and the house is now ours!