Buying a property through Private Treaty is one of the most stressful things that one will go through in their life. It is a long and arduous process that can drag on for months and months. Below we take you through the step-by-step process of how to buy a property through Private Treaty.

Step One – Mortgage in Principle – Around 2 Weeks

Before you even begin to look at properties you want to buy you need to know what your price bracket is. Unless you’re able to buy a property outright in cash then it’s very likely that you’ll be a purchasing a property through a mortgage. A mortgage is a type of loan you get from a bank or building society to help buy a property.

Don’t you need to know what property your buying in order to get a mortgage? Yes. So why is this the first step? If this seems a little bit like the chicken and the egg scenario you’re not entirely wrong. You can’t get a mortgage without property, but you can get a mortgage in principle.

A mortgage in principle is not essential when buying a property but it helps and its always better to be organised. A mortgage in principle is confirmation of how much a bank or building society is prepared to lend to you based on the information you’ve provided. It gives you an idea of what you can expect from your mortgage lender which helps you narrow down your search in finding the right property for you.

The allocated two weeks here is not necessarily how long it takes to get the agreement in principal from a lender, that will be closer to one day, this is representative of the time spent shopping around mortgage lenders.

The benefits of having a mortgage in principle is that it speeds up the process later when finalising your mortgage. As we’ll get into later, speed and efficiency is paramount in purchasing a property as many of the pitfalls that can lead to sales falling through are exacerbated by extended timescales.

For that same reason, it is also a good idea to line up your conveyancing solicitor at this stage. A conveyancing solicitor is a legal expert that you’ll hire to guide you through the purchase of the property and become essential once you make an offer on a property.

Step Two – Finding Your Property – Up to 40 Weeks

This step will usually be the longest step when it comes to purchasing a property.

Whilst there are many outside factors that will affect the length of this step, this is the step that you have the most control over how long it will take. This is the step where you search for the property you want to buy.

Having a mortgage in principle will help narrow down the field to what you can afford, it will then be up to you to research what area you want to move to and any other criteria you may have concerning the property you wish to buy. You’ll want to go to multiple viewings before deciding on a property and making an offer. The property market itself will have an impact on this step. Currently, we are in a sellers’ market. This means that there are more buyers out there looking for property than there are properties to find because of this, properties are selling quickly and for the most part over their asking prices.

The good news here is that when you’re offer is accepted the process is likely to skew to the faster end of the timescales.

The downside is that with so few properties and them quickly disappearing, if a property that meets your criteria is sold to another buyer, you could be waiting longer for similar property to come to market.

Step Three – Having an Offer Accepted – Up to 2 Weeks

Once you’ve found the property that you wish to purchase now is the time to make an offer. At this stage your solicitor’s expert advice will be invaluable. They will be working to get you the best price for the property, and they will be more knowledgeable when it comes to the factors at play when making your offer. Things like how many other buyers are interested and how long a property has been on the market will all affect how much you should offer above or below the property’s asking price.

Once you’ve made an offer, you’ll likely enter into negotiations with the seller. You’ll want to keep the price low, whilst the seller will be trying to push the price up. When purchasing with a mortgage, having secured a mortgage in principle will help the seller feel more secure about the sale. As many as one in six sales fall through due to mortgage issues alone.

It’s also in your best interest, particularly at this stage, to keep things moving as quickly as possible. From here on until the exchange of contracts you run the risk of being Gazumped.

Gazumping is where another buyer enters the picture offering more money than you. This causes the seller to back out of your offer and accept theirs instead. You can make it a condition of your offer to take the property off the market, but this is not a full proof way of avoiding gazumping.

Step Four – Finalise Mortgage – Up to 8 Weeks

Once your offer has been accepted, you’ll now want to finalise your mortgage. Having already gotten a mortgage in principle will greatly speed up the process at this stage. The mortgage lender will now need all your details and they will need to conduct a full valuation of the property you wish to buy. From this they will determine the viability of their investment and the likelihood that you’ll be able to afford the payments going forward.

Having your mortgage in principle isn’t a guarantee that the lender will provide you with the money needed to purchase the home. The details will need to be finalised for the mortgage to be confirmed. If the lender refuses your application for a mortgage the property sale will likely fall through.

Last year Aldermore reported that four in five prospective first-time buyers had been rejected for a mortgage. It isn’t just from buyers not qualifying for the mortgage that can result in the sale falling through, some lenders may still “down-value” a property from the price agreed between the seller and buyer.

This is means that the lender disagrees with the value of the property that the seller and buyer have agreed upon and as such, they don’t feel safe in the investment of their money through the mortgage. This is becoming a more common occurrence in recent times as lenders anticipate the market to slow down or potentially crash they are down valuing homes by tens of thousands of pounds.

Sellers can be wary if this process goes on for too long. They know that if a mortgage buyer is struggling to get their mortgage, their sale is likely to fall through. In this instance, in the seller’s best interest to find a different buyer than to wait for their current buyer to find another mortgage lender willing to accept them.

Step 5 – Conveyancing and Surveys – Up to 12 Weeks

A this point in the process your Conveyancing Solicitor, the seller, their Solicitor and Land Registry will all begin the legal process of the property sale. This will involve verifying the sellers legal right to sell; verifying the properties boundaries; whether it has planning constraints or environmental risks. It will involve the completion of surveys; your Conveyancing Solicitor will want to ensure the property is in the condition that the seller claims it is in.

The Homeowners Allaince found in 2021 that 27% of house surveys fall through because of a bad survey. If your survey comes back with minor problems the sale probably isn’t going to fall apart. You could have the seller fix the issues or just renegotiate the price in order to accommodate the additional costs in repairs. If the survey finds something bigger, then it’s likely the sale will fall through. Anything like issues with the wiring, dry rot, subsidence or Japanese Knotweed can all be deal breakers.

This stage is why it is a good idea to have organised getting your solicitor earlier. Depending on how busy the property market is you mind find that solicitors are swamped with multiple cases. By booking in early and being organised you can ensure that you are high up on their priority lists.

Step 6 – Exchanging Contracts – Up to 4 Weeks

This is the all-important part of the house sale. Once yours and the seller’s solicitor exchange the signed copies of the completed contracts the sale becomes legally binding. At this stage your Solicitor will secure the deposit from you and receive the funds from your mortgage lender. If there are any outstanding complications with the purchase that need finalising this can be slow the process down. It’s important to keep chasing for updates from your solicitor to ensure that the process is moving as quickly as possible.

Once everything is finalised a completion date will be agreed upon.

At this stage, although you haven’t yet completed you are legally bound to buying the property so it is advised that you secure building insurance on the property in case anything happens between now and completion.

Before the contracts are exchanged is the last point in which a seller can cancel the sale. They may decide to stay in their property or they may just want to wait a few more months if the property market looks like the house prices are going to go up.

If your sale is part of a chain this is where the process can get held up as you become more reliant on other sales reaching the same point. A property chain is where buyers are all linked together because the purchase of their new home is reliant upon the sale of their old one.

One in five property transactions fall through because of a break in the chain. There’s not much you can do when in a chain other than ensure your link in it is as strong and as efficient as possible. Unfortunately, the longer the property chain and the longer the process extends for, the higher the chance is that a link in the chain will fail and the higher the chance that the failed link will knock on to de-rail your own purchase.

Many buyers will try Gazundering at this stage, this is where they lower their offer at the last second in the hope that the seller is too far along in the sale process to want to see the deal fall apart. It is a risky strategy that can often see property chains fall apart where sellers remain steadfast on the previously agreed property price.

Step Seven – Completion – Up to 2 Weeks

This is the final step in purchasing the property. You’ve reached the end of the long and arduous process. At this stage you will receive the keys and title deeds to your new home. The only thing left to do is pay the final Stamp Duty Tax and register your property purchase with the Land Registry Office.

Buying at Auction

An alternative to the purchasing through private treaty that is often overlooked is purchasing a property at auction. Many house buyers immediately rule out auctions as they see it as a playground for property investors and cash buyers but the auction environment is quite different now but the auction environment is very different now.

The perceptions that auction properties are all run-down fixer-uppers is misplaced. Although, they do perform well at auction what makes an ideal auction property is less about the property and more about the seller. There are now all kinds of properties available to purchase at auction, and the common denominator is a motivated seller. Today, many people can find their wealth is tied up in property and the private treaty method cannot realise those assets fast enough for them.

Buying at auction reduces the stress of worrying whether your property chain is going to fall through, and it eliminates the possibility of gazumping and gazundering. In the live bidding process, all bids are final, and the property will sell to the highest bidder if the seller’s reserve has been met.

You will also receive an auction pack before the property auction which will include all the legal documents required to purchase the property.

Utilising the Modern Method of auction also opens the doors to mortgage buyers. Modern Method Auctions operate slightly differently to Traditional ones whereby the winning bidder wins the exclusivity to purchase the property at their winning bid price for 28 days. This allows the buyer time to finalise their mortgage with their lender.

Auctions are no longer for the wealthy cash buyers and investors, taking place in stuffy halls. The process is open online to everyone and offers a more streamlined way to purchase and sell property in the modern age.

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