How Long Does It Take To Buy A House?
It is often said that the process of buying a house is a minefield, and that analogy comes from the fact that so much of the process is beyond your control, and there are numerous unanticipated problems that you can become bombarded with at any time. And this is the same whether you have been buying and selling properties for forty years or whether you are a first time buyer. This is why buying a house is one of the most stressful and frustrating things you will ever do.
So the question ‘how long does it take to buy a house?’ is possibly one of the most open-ended questions you could ask. There are so many factors that can delay or speed up the process that it is impossible to give a definitive answer. You can certainly plan ahead at key stages to make things happen faster, and there are certain actions that can be taken simultaneously to hurry things along, but the number of variables do make planning very difficult.
Ultimately, how fast a house sells is very much down to the market, but as the buyer you are not too concerned about that. And despite these many possible delays that we talk about, there is a strict process which every property transaction has to follow, so we can make a rough estimate of the time necessary for each stage.
As a rule of thumb, you would be advised to put around six months aside for the process of moving house. But that can cover the whole process from deciding you want to move, to actually moving into a new home. Within that, there are other processes which have their own average timeline. The legal process can take between six to 12 weeks, and the average time to reach completion during that process is currently 44 days. But you need to allow for a number of different things which happen before that, in order to estimate how long the entire process takes. And this article is designed to take you through that process and to explain the timeline potential for each stage.
The planning stage
In truth, this stage can start many years before you actually begin the process of buying a house. Not everybody dreams of being a homeowner, but if you do you can plan towards being one even when you are at school. When you find yourself in a stable position in life, with a steady job, good health and maybe a healthy relationship too, then you can start to think about owning your own home. This might involve some sacrifice or some soul searching, when you realise you can’t afford the type of property you have always wanted, but it serves you an important lesson in life, and also gives you something to aim for.
This planning stage can take years or it can take a few months. But it is the point where you can start to do some accurate sums and make some tough decisions on what you can afford, maybe you can also get some independent financial advice. But here you can look around and do some research, to establish roughly what kind of property you can afford and where it would be. What kind of monthly payments can you realistically keep up with? What kind of deposit can you save up? When you start this process, it could feasibly take you two years or more to get to the next stage of actually having a deposit, but it is a critical step in making realistic and sustainable plans, and is a very necessary stage in the timeline of buying a house.
Finding a house
Now that you have established your financial constraints and parameters, you can start to look in earnest at affordable and desirable properties. This is a very exciting stage, but it is important not to rush into making a commitment on the first property you see. Viewing properties can really open your eyes and make the market much clearer and easier to understand, so the experience of viewing different properties is important. It can take six months to find the property that ticks the most boxes, or you can drop lucky and find it within a couple of weeks if you set up lots of viewings.
If you are looking in an unfamiliar area – which for a first-time buyer is very common as you are most likely moving out of a parental home or rented accommodation into an area where you can afford to buy a property – you need to fully understand that area. So research amenities, schools, shops, transport links and any planning applications for new developments. How will the area change in value in the next few years? Also, check out your potential new street at different times of day. Areas can change in nature between daytime and night time, and possible factors of nuisance or undesirability may only become apparent at night.
All this research can take a few weeks until you are sure the property and the area is definitely for you.
Making an offer
When you have weighed everything up and are ready to make an offer, this element of the process is actually very quick, surprisingly so. Make your offer realistic and based on market research and your borrowing capabilities, but also you should be savvy and allow yourself some room around the asking price to negotiate. It can sometimes take only a couple of hours between making an offer and hearing back from the estate agent with either an acceptance or a rejection. Even if you have to go back with a counter-offer, this process may only take 24 to 48 hours, before you negotiate an accepted offer.
This is a very exciting moment, but it is only the very start of the process and there is a lot of potential anguish and anxiety to come. It is also the point where the hard work starts, and in actual fact, a lot of the background work should already have been started. Let me explain.
Your offer is accepted
Whilst this is a champagne moment and certainly a key milestone in the timeline of buying a house, there is no legal agreement at this stage, and unfortunately you are still in a very vulnerable positon. It is sadly common that counter-offers will be accepted from other buyers, or that the seller will go back on their word and decide to take their property off the market (known as gazumping and gazanging respectively). In essence, the seller holds all the cards, and when you are in a chain, there is always the likelihood of something happening to break or delay the chain. However, if you are a first-time buyer you are not in a chain, hence you can reach completion quicker and often appear as a more attractive buyer in the market.
It is true that this is a very anxious time when you feel very exposed to potential heartbreak, and hence you are wise to do everything you can to speed the process up. In truth, much of this can be done prior to even finding a house to make an offer on, and the key elements of this are what we will discuss next; arranging a mortgage and appointing a solicitor.
Arranging a mortgage
As we spoke about earlier, you need to establish very early on how much you can borrow and how much you can afford to pay in monthly mortgage payments. Previously this might have been via independent financial advice, but now you need concrete information, a financial product that incorporates this and a formal agreement with a lender.
You can agree all this with a lender - or using a financial advisor or broker who will recommend a selection of products – prior to making an offer on a house, and form an Agreement In Principal (AIP). This is a signed document that states how much you can afford and what the lender is willing to lend you, and against certain terms, and can be used as a bargaining tool when making an offer, ie. to show the seller you have the finance in place, at least in principal.
Finding the right mortgage can take three to four weeks, as you shop around, have different meetings and do your sums. It is worth researching this extensively as loan terms such as interest rate %, fixed or variable rates and cash back incentives can make a huge difference to your financial freedom for the next few years. You can make big savings or alternatively, you can make a bad decision that ties you into a financial straightjacket for the next decade.
As mentioned, you can secure an AIP whilst you are looking for properties, they are usually valid for between 30-90 days, and in all likelihood, if this period runs out you would probably be accepted “in principal” again, assuming nothing has changed. But be wary that new products and better terms may have become available in the meantime, so it may not be wise to sign up to the same deal again.
Once you have an offer accepted, you can trigger your lender to make this AIP a formal agreement. Alas, it can take between two to four weeks to receive a formal mortgage offer from the lender. This is because the lender will need to run credit checks and get their own valuation on the property, to establish whether it fairly reflects the amount of money they are lending you, and if it is in good condition. A bank won’t want to lend to you if the house is likely to fall down or cause you huge structural problems.
This can be a frustrating stage of the process, but it can take place whilst other things are happening, and for that you will need a solicitor.
Appointing a solicitor
You need to appoint a solicitor to manage the necessary process of handing over the ownership of the property from the seller to you. This can be a laborious process. However, property conveyancing, as the process is called, is a specialist legal task and is absolutely critical. So you should research legal companies and appoint a solicitor as early as you can. People often do this prior to having an offer accepted on a property.
It is possible to speed the legal process up by making daily phone calls to your solicitor and to ensure that tasks asked of you are completed as quickly as possible, ie. completing forms, providing information and signatures etc. Essentially, a solicitor carries out the conveyancing task at their own speed because they are just doing their job, and they will do so unless you ask them to do it quicker. Unfortunately, some elements of this process will take time whatever you do to intervene.
As we mentioned earlier, it can take between six to 12 weeks to complete the sale of a house at this stage, but this is also where the process can hit the most delays. So what does the solicitor do?
Land registry – Searches to identify possible issues with the exchange of the property, such as drainage issues, environmental issues, subsidence etc
Local authority searches – Possible planning issues which might affect the value of the property
Deeds – Transferring the ownership deeds from the seller to the buyer
Finances – Liaising with the lender to process and transfer the funds for the house purchase
Contracts – Liaising with the seller’s solicitor to create the contracts of exchange
Surveys – Arranging for surveys to be undertaken on the property to highlight potential issues, such as work required on damp, electrical re-wiring, roofing issues etc
Completion – Agreeing a completion date with the seller and arranging with the estate agent the exchange of keys
You can see that there is a lot involved in this process and why it is key to the timeline being extremely flexible. It is true that freehold properties will probably navigate this process quicker, as the seller will own both the building and the land it stands on, whereas with leasehold properties this is not the case, and hence the process is more complicated and can add maybe two weeks on to the timeline.
Delays can be found at any of these stages and they are often unforeseeable. The most common delays are found with the surveys and the subsequent negotiation that is required. It is not unusual for surveys to reveal work that is required, and it can either be agreed that the seller will pay for this work to be done before the sale is completed, or that the value of the work is taken off the house cost price. Either way, a delay of four to six weeks is quite common, particularly as communications are taking place via third parties, quotes for the work need to be obtained and the work itself needs doing, if that was the agreed solution. It should be noted that a mortgage valuation is no substitute for a proper survey being done on the property prior to buying it. A lender’s valuation is often just a cursory view of the property in order to establish that the rough valuation is reasonable, it won’t uncover infrastructure issues such as damp or leaking roofs.
The next stage of the process can be processed quite quickly, on average it takes between one and two weeks, but it is not unheard of for delays to make this three to four weeks. This is the process of exchanging contracts once all the legal conveyancing has been successfully completed.
In many respects, this stage is a case of getting all your ducks in a row prior to completion. So this would be making sure funds for the deposit are in place, and that you have insurance agreements ready as you will soon be legally responsible for your new home.
Delays at this stage are usually due to the chain you are involved in and trying to co-ordinate all the many transactions so that a completion date can be agreed. If you consider all the possible delays that can take place during the conveyancing process, then it is not hard to look at the number of houses in a property chain and how many opportunities for delay exist, after all, these same hiccups are happening to other people too, and this is where being a first-time buyer can be a real advantage.
The term ‘exchange’ of course relates to the exchanging of contracts, and at this point, when both parties have signed the contracts, you are each legally bound to the sale. This is a huge relief, and enables your solicitor to agree a completion date, which again is subject to problems and delays, some of which may be caused by the sale of your own property if you are not a first-time buyer.
Completion is really just a formality, and can take just a week or two weeks from the point of exchanging contracts. Much of this process is the responsibility of your solicitor, and the process includes:
Completing a statement breaking down your costs and money owed to the solicitor
Arranging for you to pay outstanding fees, stamp duty and land tax etc
Signing of the transfer of deeds
Requesting money from the lender and triggering the mortgage repayments
Transferring the money for the property sale between solicitors
Receiving the title deeds
Registering the sale with the Land Registry
Receiving new title deeds detailing your ownership
None of these tasks are particularly time-consuming, but you can see how delays can accumulate to add another couple of weeks onto the timeline. Often the actual exchange of keys can occur during this process, and the final two legal formalities listed above can be completed when you are already in the house. However, even when you have a completion date, when you collect the keys to your new home, this can be delayed at the last minute by the seller moving out or money not clearing in the seller’s solicitor’s account. You also need to ensure you have a removal team booked, which might not be possible on the day you originally needed them.
So how long does this all take then?
Firstly, congratulations, you are in your new home and the process has been stressful and painful, but worth it. As we mentioned at the outset, it is wise to allow about six months for the entire process; from deciding to move to getting yourself over the threshold of your new home. There is stuff you can do to help this happen faster, but an awful lot that you can’t.
And ultimately, all you can do is ensure that you are not the cause of any delay. Be prepared, be diligent and be attentive. You can badger your solicitor or lender to get work done with daily phone calls, but at the same time, make sure you have done all your jobs too. The actual legal process can happen quickly – between six to 12 weeks – but it is always wise to build a contingency period of a couple of months in for routine delays, and essentially, if you are in your new home in less than the six months outlined above, then everything went relatively smoothly and it will be a pleasant surprise.