After a rather grumpy first post on house hunting in London I can now let you in on a little secret – we’ve just exchanged contracts on a 2 bedroom, mid-terrace house in North London!
I’ve tried keeping chat about the house to a minimum on the blog. after all, nothing is certain until you’ve signed on the dotted line and with house purchases often falling through before reaching exchange, we decided that keeping it on the down-low would help us stay focused and keep stress levels to a minimum.
We also had good reason to worry. The circumstances in buying our house were far from simple.
- The sellers were 9 months pregnant at the time they accepted our offer.
- They hadn’t even begun looking for their own home and didn’t plan to until the baby was born and settled.
- They were moving out of London.
- We didn’t have a break clause in our rental agreement so were looking at costly fees for leaving too soon or homelessness if the purchase wasn’t completed in time.
- And it turned out one of the individuals further up the chain actually had no intention of selling their house…slight problem there!
As you can imagine, once our offer had been accepted we had a lot of questions that we needed answering.
- What makes a good conveyancing lawyer?
- Where can I find a good conveyancing lawyer?
- What comes first, the mortgage application or instructing our lawyers?
- Can we put off spending money on fees and searches until the sellers find a place?
- When should we get a survey done?
- How long does it take between them accepting our offer and exchange of contracts?
- How long is the gap between exchange of contracts and moving in (aka completion)?
- What is the average overall timescale of a property transaction?
Surprise, surprise no one could actually answer these questions. The nature of the housing market means that every transaction is different. Priorities will change from seller to seller (and buyer to buyer) and what one chain may consider quick others will consider slow. But I’ll do my best to shed some light on the process and why our house purchase took as long as it did.
But first, let’s start with the basics…
Phase 1 – house hunting
The dreaded mortgage meeting
Before you can even start looking at houses the first thing you need to do is arrange a mortgage meeting with your bank or broker.
I would massively recommend using a broker as they essentially work in the same way as a comparison website would, giving you lots of different options and helping you decide which one is for you.
At your mortgage meeting you’ll discuss how much you hope to borrow, over what length of time and the type of property you are after. All going well, you will be able to get a mortgage in principle which tells you exactly how much the bank is wiling to lend you. With this confirmed you can start viewing houses. We decided very early on we’d look at houses a fair amount lower than the max the banks would lend to us. Houses in London are pricey as it is and we wanted room to negotiate and up our offer if we had to. It also means that our mortgage repayments will be more comfortable!
Once you know what price-range you’re looking at, you can start viewing properties. I gave you some really frank advice in this post on house hunting in London. Just remember to keep your search as wide as possible to begin with until you really know what you’re looking for.
Making an offer
Once you’ve found a house you like then you need to make your offer. It’s recommended that you do this by way of a letter (emailed to the Estate Agent is fine). This gives you a chance to set out WHY they should sell to you, instead of selling to the cash rich property developer who is lurking in the side lines.
The rest of the negotiations will more than likely happen over the phone. If they ask you to revise your offer, or give your best and final offer don’t be tempted to go in super high. Be sensible, think about what you can realistically afford and don’t go any higher. There’s no point having your offer accepted if you can’t actually afford the mortgage repayments at the end!
Making another offer…
Chances are the first house you put an offer in on will get snapped up by someone else. Don’t worry there is something even better out there just waiting for you to find it! Chin up and do some more property viewings!
Phase 2 – so you’re going to buy a house…
Once you’ve finally got your offer accepted (yay!) things start to heat up.
The first thing you’ll need to do once your offer has been accepted is to instruct solicitors/conveyancers (same thing really!) If you’re super organised you’ll already know who you want to use. It may be that your bank tells you which conveyancer you have to use, or you may be able to go on the recommendation of your broker.
We used Legal & General’s conveyancing arm which was recommended to us by our broker (Charles Cameron Associates). They have an online portal through which the whole property deal is done which was perfect for me! I could review documents, fill in forms etc, all via the app while in the taxi on my way home after a long day at work.
Apply for your mortgage
Once solicitors are instructed you’ll need to apply for your mortgage. If you’re going through a broker they should already have most of the information they need to submit the application. You’ll just need to update them on the details of the house. If you are using the same bank you got the mortgage in principle from this will also speed things up.
Getting your mortgage offer back should take no more than a week or fortnight at a push.
Get a survey done
Your bank will have done a valuation as part of approving your mortgage offer. You will also want to get a survey done. There are 3 types and the one you will choose will depend on the type of house you’re buying. More information on that from the experts here. The company carrying out the valuation for the bank may be able to do your survey at the same time so do ask!
Drown in paperwork
Once solicitors are instructed and your mortgage application is done you will start being bombarded with paperwork.
The solicitor will undertake searches about the property on your behalf. They will be asking lots of questions of the sellers and you’ll have to read all of the information that comes back. You’ll find out things like whether or not the shed is being left in the back garden, whether your next door neighbours have the right to walk across your drive way to get to their bins and other important information. If you have any questions about what’s included in the documents ask your solicitors.
They will then feedback your comments into the draft contract as appropriate.
Part 3 – exchange of contracts
Once you’ve finished drowning in paperwork and the contract is drawn up it’s time to exchange contracts.
You’ll need to make sure you’ve sent your deposit and any other moneys required to your solicitor along with the signed contract.
The solicitors will then agree a date on which the contracts will be swapped and deposit monies sent. This is known as exchange of contracts. From this point on wards you are contractually obliged to buy the house. If you pull out now you loose your entire deposit and any fees you’ve spent so far.
Whilst that might sound quite scary it also provides a great deal of comfort (particularly if you’ve had a long transaction like us). From here on in you can start buying bits for your new home, start arranging your new address cards, book your removal company and start packing!
Part 4 – completion
Not a lot happens at completion. In the gap between exchange and completion your solicitor will have asked the bank to send your mortgage monies for the day of completion. Once the money is where it’s meant to be the solicitors will call each other and agree that the transaction has completed.
Despite it being the most important day, really it’s lots of waiting around for you until you’re finally told you can pick up your keys and open that bottle of bubbly!
I’m going to be posting lots of helpful hints and tips about moving over the next couple of weeks so keep your eyes peeled!
Part 5 – live happily ever after!
OK so you probably don’t need telling this but from the moment you step through the door all you have to do is live happily ever after! Simple!
Hopefully I’ve already answered some of your questions about the home buying process but here are a few FAQs which may be helpful.
What’s the average length of a property transaction?
There’s no way of knowing how long it will take to get from Phase 1 to Phase 5. Ever heard the saying “how long is a piece of string?”
I’ve heard 6-8 weeks from an offer being accepted to contracts being signed as a “quick deal”. The internet suggests 10-12 weeks is “average” but 6 months isn’t unheard of!
Excluding the amount of time we spent house hunting (roughly 3 months…) In total it took us 27 weeks (6 months). That was made up of 12 weeks between our offer being accepted and legal work beginning, 13.5 weeks between legal work starting and exchange of contracts (though in reality the legal work only took 4 weeks and the rest was just waiting…), and 1.5 weeks between exchange of contracts and completion. All in all the process took 9 months from start to finish and we’ve now got 3 months ahead of us of decorating and buying furniture!
As I mentioned earlier there were quite a few issues with our chain including the woman who didn’t actually want to sell her house. Because of her we had roughly 2 months of unnecessary uncertainty in the middle. In the end our sellers broke the chain with her (having had an offer accepted on another house) and decided they would exchange and complete with us and move into rental accommodation until they could complete their new transaction. Our mortgage offer had expired and had to be extended and I think they felt pretty bad for us waiting so long! Not all sellers would have been as nice.
Who controls the timescale?
The reason why transaction timelines vary so wildly is because there are so many variables.
Once you’ve instructed lawyers and your broker is doing your application you are at the mercy of the lawyers you’ve chosen as well as those of the various other parties in the chain. Some lawyers will work fast. Others won’t. But don’t underestimate your ability to influence the speed of the transaction too.
Apply gentle pressure if things aren’t moving fast enough. We had hard deadlines to meet whereby our mortgage offer would run out and we’d be homeless – EEK. Once the legal work had finally begun, reminding all parties of these hard deadlines helped focus everyone’s minds during a quiet patch.
On the other hand, if you have an awkward chain like we did where the seller’s still haven’t found their own home, ask the lawyers to hold off before doing anything that incurs costs. It was important to us that we didn’t spend lots of money before it was clear we were actually going to be able to proceed with the transaction. Our lawyers were great at doing nothing during these few weeks / months.
Outside of your relationship with your own lawyer, you’re at the mercy of the rest of the chain. If you’re a first time buyer and the seller is also chain free you can hope for a quick deal. If you are 1 of 8 sales in a chain things will naturally move slower as each party and their lawyer is having similar conversations to those mentioned above.
How is a date for exchange chosen?
Once you’ve done all the legal work you can pick any exchange date you want. Nothing happens on this date other than the solicitors swapping your pre-signed contracts so you don’t need to book any time off work.
How is a completion date chosen?
Usually the dates for exchange and completion are decided at the same time though it might be that you exchange and then your solicitor and the seller’s solicitor will agree a completion date, having consulted you first. There is also usually a gap between exchange and completion. This is because, if you require a mortgage (who doesn’t?!) then after the contracts are signed, the mortgage will be requested from the lender by your solicitor. Most banks need 5 days notice before they will release the funds so you will have at least a 1 week gap. We are set to complete next Thursday so we will have had a 9 day gap in total (all going to plan!)
How and when do I get the keys?
Once the seller’s solicitor has confirmed receipt of funds to confirm the transaction has completed, the estate agent will be able to confirm where and when you may collect the keys. It can take quite a while for funds to move about so it’s unlikely you will move in early in the morning. We’ve been told funds are expected to arrive on the day of completion between 11 am and 2pm. We’ll be able to pick up the keys after that.
Leave your questions in the comments below.
If you’ve got any more questions about moving house do let me know and I’ll do my best to answer them!
Presuming all goes to plan we will complete next week. Please keep your fingers crossed for me we’ve been super unlucky so far!!! Keep your eyes peeled because I’ll also be sharing my moving tips and ideas for decorating the new house.