First Time Buyers – Exchange and Completion

Advice and Step by Step Guide to Buying a First Home in the UK

Jan 1, 2009

Follow this handy guide to avoid the common mistakes of first time buyers, and see your purchase smoothly through from offer stage to completion.

Buying a first home can seem like an overwhelmingly complicated process. With the credit crunch/sub-prime lending crisis impacting heavily on property transactions it’s even more important to ensure that when the perfect first home has been found the purchase completes smoothly and swiftly. Chains are vulnerable to collapse and require attentive and responsive buyers to ensure that they don’t fall through. Follow this easy step by step guide to provide the best chance of securing a first property.

After making an acceptable offer to the vendor of the chosen property and getting the memo of sale it’s all systems go, assuming that the vendor is at a similar stage of readiness in their own plans.

Establish Contact with the Rest of the Chain

First time buyers often end up at the bottom of a chain, i.e. when their vendors are also buying a new property and those vendors are also buying a new property, etc. The chain stops when a vendor is either not buying themselves (perhaps they intend to rent, or are a developer), or when the capital released from one sale is not necessary to finance the next purchase. Long chains can be tedious and frustrating, since the whole chain can only move as fast as the slowest link.

Once solicitors have been instructed, and buyers have completed all the initial forms and identity checks, a lot of the hard work happens behind the scenes, but there are things that buyers can do to help the process along. Giving permission for solicitors to communicate by email saves a lot of postage and formal letter-writing time. Also, establishing good communication links with all the vendors in a chain can keep stress minimized and allow a useful flow of information. It may not be possible to speak with vendors directly, but even going through their estate agents should prove helpful. Aim to keep each other informed of progress and delays.

Encourage Mortgage Application and Get the Right Survey

Ensure that the mortgage application is going ahead. If using a broker make sure they appreciate the necessary time scale; call the lender occasionally, if necessary, for a progress report. The lender will instigate a survey of the property, at a level of the buyer's choice, and buyers can normally expect this to be the first sign of progress. Fill in all forms they send promptly and return them without delay.

Don’t be tempted to cut corners on the survey. For very new homes a valuation level survey is often enough, and it’s certainly the cheapest. But it is highly advisable to go for the homebuyer's report, or mid-level survey, which goes into more depth about the structural detail of the property. And if the property is more than 75 years old, it is highly recommended that buyers get the full structural survey which goes into even more depth.

Getting a detailed survey is money well spent, and can save hundreds or thousands of pounds, since if it uncovers significant problems within the property there is still time to re-negotiate the price with the vendor to account for the costs of repair, or buyers may choose not to proceed any further with the purchase. Solicitors will advise and assist with this at the appropriate time.

When the survey report comes back read it carefully and, in conjunction with the solicitor, act on the findings. There is no need to worry unduly about minor problems, but buyers should get quotes for any larger repair work from reputable sources, and satisfy themselves as to the condition of the property before continuing.

Same goes for the land searches and other information about the property that the solicitor will source for their buyer clients. It is the buyer’s responsibility to ensure that the property is a sound purchase, although advice and guidance will be available to them from many sources, including solicitors, local councils, friends and colleagues, and reputable internet resources.

Deal with Delays, De-stress, Keep Good Relationships with All Involved

Delays are inevitable. There is often some event or hitch that slows the process up and this can be frustrating and very stressful. But be sure to take it out on a punchbag or some other outlet rather than venting at the vendor or estate agents. Remember home-buying is famously one of the most stressful life experiences there is. Good communication is essential to swift progress so don’t do anything to unnecessarily harm those valuable channels.

Chase up Progress, Exchange and Completion

When the mortgage offer arrives, complete all the necessary steps required to allow the loan to be drawn down. At this stage buyers may need to flex those well-kept communication contacts with the rest of the chain, to ensure that all parties are moving swiftly towards exchange.

Exchange means the passing over of legally binding documents which irrevocably commit buyers’ deposit monies to the transaction. If buyers pull out after exchange they will lose their deposits.

When everyone in the chain is ready to exchange, the solicitors will agree on a date. At exchange a date for completion is also agreed. This will normally take place within a few weeks of exchange.

This is the time to ensure that utilities at the new property are ready for the buyer to take over, that plans for removal to the property are in place, and that friends and family are on hand to help if necessary.

Completion involves the final passing over of remaining monies to the necessary parties throughout the chain, and the handing over of keys. The vendors must have removed themselves and their belongings from the property by a specified time on completion day.