5 Differences Between Buying a Home in the UK and the US

The process of purchasing property varies greatly across the world. If you are a UK resident who is considering moving to the states, you may have picked up a few details of the US system of homebuying from American TV. 

However, there may be some differences that you are not yet be aware of. Here, the sell house fast experts at Property Solvers explain just a few of the differences between homebuying in the UK and the US.

1. How Do You Find Your New Home?

Seeking out a new property in the UK usually consists of online searches, the browsing of estate agency windows and rubbernecking at for-sale signs by the roadside. Prospective buyers undertake these tasks independently, then approach the estate agent with the desired property on their books.

Things are rather different in the US. There, it is most commonly the case you choose a realtor or real estate agent and tell them what you require in a new home. They then go about finding suitable properties for you. However, you can also request that a realtor sets you up with a viewing of a particular house you’ve seen.

2. Who Helps You to Buy Your New Home?

In the UK it’s most common to be taken through the process of purchasing a property by an estate agency. There doesn’t necessarily have to be one agent working on your purchase - all the members of staff at a property agency are party to the process.

In the US, a Realtor® (someone who is registered as a member of the National Association of Realtors) or a real estate agent will assist you in buying property. This is an individual who takes on your case, and who usually works for - or is connected with - a particular brand or company. Real estate agents must always be licensed by the state in which they reside. 

Normal practice is that those searching for a realtor conduct interviews with a number of individuals before they select one to work with. A Buyer’s Agency Agreement is then signed, which explains matters such as your expectations and time limits.

3. What About Mortgages? Agreements in Principle vs Pre-Qualification

If a buyer in the UK doesn’t already have a mortgage offer in place from a lender, they may apply for an offer in principle. This involves a lender taking a little background information - including details of the buyer’s financial status, then performing credit searches and working out credit scores in order to decide the size of mortgage they are likely to be able to lend you.

In the US, however, you need to arrange to be “pre-qualified”. This involves speaking to a mortgage lender (or a number of them if you wish to compare quotes) and providing them with information that helps them to work out matters such as your budget, the size of deposit you will require, your monthly payment schedule, the interest rate to which you may be subject and the types of loan for which you may be able to apply. 

4. How Do You Make an Offer?

Once you’ve found a property you like, it’s time to make an offer. In the UK, this system is fairly straightforward. Once you have a mortgage offer or agreement in principle, you can put forward an offer. This may be equal to, above or below the asking price. If it is below and the seller is simply hoping for a quick sale, they might accept it. Otherwise, they may reject it because it is too low. If you make an offer that matches the asking price, the seller may accept it or decide to hold out for a better offer, or it may be the case that someone has offered more. You can then increase your offer if you wish. 

If multiple offers are being put forward, an estate agent may decide to go to “best and final” - which involves every interested party putting forward their final offer that cannot then be changed. The successful “bidder” will then be determined.

By contrast, in the US, you may need to negotiate your offer with the seller through your realtor. Once an offer has been made, the seller can make a counteroffer which nullifies the previous amount mentioned, and you can decide whether or not you wish to accept the new figure. Only once this haggling is completed will you be able to accept and sign your purchase contract.

5. What About Checks, Searches and Inspections?

In the UK, once the process of buying your new home has been officially put in motion, a professional survey or valuation and a series of checks and searches will need to be undertaken - something that is usually arranged by your solicitor. The basic checks and searches required usually fall under the following categories: Local Authority, Water and Property and Environmental.

The US system includes a Buyer’s Inspection Period – usually of around fourteen days, which starts as soon as your contract is officially ratified. During this time, you are expected to arrange a home inspection at the very least, which determines the property’s state of repair. After this is complete, the buyer and seller will then discuss anything that needs to be fixed. 

The buyer also has the opportunity to pay independently for other searches - including checks for termite infestations (alternatively, a certificate may be provided by the seller that proves this has already been done), lead based paint inspections (which are usually only required if the house was built before 1978) and an appraisal, which is a check to determine whether the house is worth the amount you are agreeing to pay.

These are just a few of the major and minor differences between the UK and US processes of property purchase. However, as with most systems in other countries, once you begin your research in full, the pieces are likely to fall together. 

Furthermore, professionals in the property industry either side of the pond come across first time overseas buyers all the time, so if you’re struggling to understand how a procedure works, the best thing to do is simply to ask!