First Time Buyers Guide

If you have never bought a house before, the whole idea of doing so might just be completely daunting as well as exciting and scary.

There are two things which you should consider first and at the same time. What is the reason for you buying a property and what is the budget? This will give you the answers to where to look for a property and what type and size of property to consider.

The easy starting point is your local estate agents and their advertising outlets, eg websites, and newspapers. This will give you a very good overview on which and how many properties are available in different price categories and whether the location you would like your property to be in is within your financial capability. This could lead you to considering different areas or, if you care more about the location, smaller properties and/or different types of property, like flats or maisonettes.

The budget

The budget you have will depend on the amount of deposit you have managed to save (or will be made available to you by family or friends) and your monthly income situation. If you need to borrow money then go and get a mortgage agreed in principle (this means you find out how much you can borrow by just taking your deposit and your monthly earning into consideration) which will be immensely useful in working out how much you have got to spend.

There are numerous other costs apart from the purchase price which will have to be paid as part of the house buying process and which you should make part of your budget. Find out about solicitor fees and fees for legal searches, mortgage arrangements fees, survey costs and stamp duty payments. It is also worth thinking about new expenditures you might have once you have bought a property - like buildings and life insurance payments.

The property search

Once you have a clear idea on how much money you can and want to spend on the actual property purchase (if you look for a property you would like to add value to then you need to reserve funds to do so) and you also have a rough idea what kind of property this money can buy you in which location, it's time to go house hunting.

Whether you pick up property details via an estate agent or a website, if the property catches your imagination and ticks a lot of your boxes, the next state is to make an appointment to view it. Do not just be led by pictures and the details but instead if it looks to be the type of property that you are looking for, go and see and 'feel' the property. The room's sizes might be part of the descriptions but standing in the rooms and seeing the layout with your own eyes will be a totally different experience. You will get a feel for the light in the property, you can listen to any noises that might be pleasant or unpleasant and you can try to picture your own furniture in the property.

Do not feel disheartened by viewing numerous properties and not feeling any love about any of them. Normally first time buyers have a very clear idea of things they want and do not want and because many of them have not really viewed any properties before, expectations are often high and perhaps unrealistic. Go back to the drawing board and think why you have not warmed to any of the properties - what exactly did you find wrong with them? If it was size and/or location then you will have to start making compromises. If it was perhaps the decoration or the layout of a place that bugs you, then see if you could alter these things within your budget.

Once you have found your dream property - and sometimes you find yourself going back to an early one you viewed just by having the comparison later on - you should make an offer to the vendor to secure it. Again, be led by your budget, do not overstretch yourself and if you did find things wrong with the property which you need to amend to make it feel right for you, then keep that money in your pocket and subsequently offer less. When you negotiate, always remember that as a first time buyer you are in an excellent position because you are chain free and ready to move as fast as needed. This will give you some advantage in case you have to negotiate the price, because most vendors will value the lower risk of the sale falling through or being delayed, especially if they are desperate to move on themselves.

Your solicitor and the conveyancing process

Once you have an offer accepted, you have to pass your solicitor's details to the vendor's solicitors. If you do not have a solicitor whom you might have used for other services in the past, then ask around family or friends to get some recommendations. Get perhaps a couple of quotes especially if you intend to use a completely unknown firm to you.

Conveyancing is the legal process for buying or selling property. Once you have instructed your solicitor to act on your behalf, then things will be ready to be initiated. The vendor's solicitor will be drawing up the legal contract to transfer ownership of the property. Your solicitor will examine the draft contract, raise any enquiries if necessary and will initiate a set of legal property searches.

If you need to borrow money, you will now also have to go (back) to your bank to ask for a specific mortgage offer relating to the property you offered on. Normally there are no problems, it is rare that a mortgage lender will not lend against a property (if you are buying a conversion project or a plot or if there are title deed problems this might be an issue however).

You also should think about commissioning a survey. Do not be confused buy the lender's survey which will take place prior to your mortgage offer. It only serves the purpose of a mortgage valuation - to make sure the property is valuable enough to secure your loan against. If you need information about structural defects or other problems the property might have (like damp), you need to have a 'proper' survey done on your behalf.

In short, there are 3 different types of surveys you can choose from, mainly depending on how old the property is, the state it is in (newly renovated or ripe for a project?) and your future plans for it. These are the 'Home condition survey or report' which might work for new built houses or properties of standard construction without major alterations, the 'Homebuyer's report' perhaps for houses built in the last 150 years and of conventional construction or a 'Building or structural survey' for even older or non-conventional properties.

If the survey does alert you to any issues the property might have, it might help you with (further) price negotiations. If all is fine, don't see it as wasted money but take it as an assurance policy.

By now your solicitor has hopefully approved the legal contract and the searches have been concluded. Again, if any issues would arise from these searches, there might be scope to go back to the vendor and renegotiate the price.

Exchange and completion

You are now ready to sign the contract which is commonly known as exchanging contracts, meaning the seller(s) and buyer(s) each sign one copy of the contract and both documents together form the legally binding contract. Neither party can pull out anymore from the transaction. Also, it is now that the deposit payment to the vendor becomes payable. The contract will state how much deposit will be due on exchange and it is normally 10% of the purchase price. The contract will also set a date for completion.

Completing the property purchase requires both parties to fulfil the terms of the contract they have signed. For the seller it means to transfer the title to the property to the buyer and hand over the keys. For the buyer it means to transfer the full purchase price minus the deposit he paid on exchanging. Most often the exchange day and the completion date are only hours or days apart.

You now own your property!! You have to settle the bill with your solicitor and pay the stamp duty if the purchase price is £125,000 or above. You should also arrange relevant insurances for your building and to secure your mortgage (it often is a requirement by the lender for the borrower(s) to take out a building and a life insurance).

For more information regarding on helping you achieve your first home and our Conveyancing service, please contact us on 01689 88 50 30 or through our online form to request a free initial enquiry.