If you’ve never done it before, the process of buying your first home can be very daunting. It is usually the most expensive thing you will ever have to buy and with it comes a huge amount of paperwork, procedures and jargon. You also have to involve a variety of different professionals to help you through it. Some are essential, others can make the journey less stressful and some you would rather not have to deal with but can’t seem to avoid!
Understanding who does what and when before you start can make it less intimidating, so we have outlined the basic process for you, explained some of the jargon and offered some tips along the way.
1. Be prepared
No matter how tempting it is to jump right in and start looking at houses straight away, it is all pretty pointless if you haven’t done some preparation first. You might end up falling in love with something you can’t afford too, which is never a good idea. Unless you have lots of savings, the likelihood is you’ll need a mortgage. And you’ll need to prove you can get this, before an estate agent will take an offer from you seriously.
2. Secure a mortgage agreement in principle
When it comes to finding a mortgage you can either go directly to a mortgage broker, to individual banks or search yourself online. Different people will be more or less comfortable with any one of these options but you probably want to start with a little bit of research yourself before you approach anyone, so that you can get to grips with the many terms and options available. Have all your finances to hand – monthly outgoings, income and savings, so you can answer the multitude of questions you’ll be asked before finding out how much you’re allowed to borrow.
Once you have found the best mortgage for your circumstances the lender will give you an agreement in principle, which you will need when you make an offer on a property. It shows you have done your homework and are a serious contender.
3. Find your dream home
Now the fun part begins. Some people might decide to employ a property search agent or ‘buying agent’ such as ScoutBee, to guide you through all the options, making sure you don’t make an expensive mistake that you might live to regret. Search agents also act as a buffer between you and the estate agents, which can be a major bonus for some! Here are a few tips for first-timers entering the new world of property search:
- Location, location, location. It’s an overused cliché but it does hold true. If you buy in a good area, you can’t really go wrong. Compromise on size or character or outside space – but not location. That doesn’t mean only look at one area, but make sure the area you choose has a lot going for it – things that will not change with time.
- Look at lots of properties and don’t rely too heavily on computer-generated images. Wide angled lenses are misleading and bad photos can hide the true character and atmosphere of a property. You really can’t beat seeing something in the flesh.
- If you’re not with a buying agent, badger estate agents with all your might – make them notice you and know that you’re serious – but be prepared to be bombarded back with every new addition to the market, whether it fits your brief or not!
- Buy as big a place as you can afford and if you can, try to buy something that is bigger than you need right now. You don’t want to find you have outgrown it in a year or two. Moving is expensive so try to ensure it will last you for at least 5-10 years. You can always rent out that extra bedroom or parking space.
- Don’t expect to buy your dream ‘forever home’ straight away. Consider a property that you can add value to by modernising or adding more usable space to, either straight away or in the future.
- Talk to the locals. Sellers and estate agents won’t necessarily tell you if there’s a problem with your intended first home. Even the surveyor won’t investigate whether the neighbour’s teenage boy has a drum set or a dog that howls all night.
- Try to play it cool! If you find yourself viewing your perfect first home, don’t give the game away by getting all excited and putting in a bid on the spot. Keep your cards close to your chest and leave it until the next day before you make your offer.
4. Put in an offer
Once you’ve found the place you want, you’ll need to make an offer for it. Usually this will be done through the estate agent – or your buying agent will do this for you if you’re using one. Remember, as a first time buyer, you are in a great negotiating position with no chain behind you (providing you’re not up against cash buyers). Play this to your strength. Expect your first offer to be rejected and never go in with your maximum budget straight away – it’s always a good idea to save a little for negotiations. Incidentally, it’s always good to have at least one rejection so you know that you are getting a good price!
Once the seller (sometimes called the vendor) agrees to the offer then the buying process can go ahead and you will be issued with a memorandum of sale. This gives the names of all the parties involved, the sale price agreed and any conditions (such as “subject to survey” or to include all the white goods) that you might have stipulated when you made the offer. It is worth noting that you won’t be obliged to go through with the deal if there’s a problem with the survey or contract or you simply have a change of heart. This is different in Scotland however, where your offer is legally binding.
5. Find a solicitor
One of the first things you will be asked once an offer has been agreed, is who your solicitor (or conveyancer) will be. It’s worth doing a little research on this beforehand – a personal recommendation is always best. The estate agent you offer through will always suggest a firm, but they will usually be getting a commission for this, so may not necessarily be promoting the best – or most thorough – conveyancer in town. Saying this, it is not in the estate agent’s best interests to recommend someone who might be slow or inefficient, as this will only frustrate them in the long run.
Your solicitor will take care of all the legal aspects of the sale and check for any planning or local issues that may affect the property’s value.
6. Arrange a survey
A survey is carried out by a qualified building surveyor and assesses the property for any potential problems. Your mortgage lender will insist on getting the property valued to check that it’s worth the price you have agreed to pay. There are three types of survey you can choose from:
Condition report – the cheapest and most basic form of survey, it is used on conventional homes or new builds. It doesn’t include a valuation or investigate possible future repairs.
Homebuyer report – more expensive and thorough, this examines the property in more detail and includes a valuation.
Building or structural survey – the most comprehensive option. If you are buying an older or unusual property (eg. a converted barn), this is the type of survey you should opt for, as it will detail any structural issues or issues to do with the conversion as well as list repairs needed and the timeframe within which they should be done.
If you’re unsure which survey to opt for, get in touch with a local surveyor to discuss the best option for your property.
If the survey throws up any problems the surveyor will usually give you an idea of how much they would cost to fix. You can use these estimates to renegotiate the price with the seller or pull out of the deal altogether if the work sounds like something you are not happy to do.
7. Exchange of contracts
It usually takes around 2-4 months for you to get from a ‘sale agreed’ to an ‘exchange of contracts’ (when the buyer and seller sign and exchange contracts of sale). During this time it can be really helpful to have a buying agent on your side who will do all the chasing and offer a more human perspective on issues that might crop up from your solicitor or surveyor. Start getting quotes for removals companies early too, if you need them, so you are ready to book when your moving date is agreed.
The exchange of contracts is the stage at which your offer becomes legally binding and you will be expected to pay a deposit to the seller (usually 5-10% of the sale price), which you will lose if you pull out after this stage.
Completion is when you pay the rest of the money agreed for the property (90-95%) as well as Stamp Duty, the solicitors and any buying agents fees and removal costs if you have any. It is also when the property actually becomes yours and you get the keys to your new home! The gap between exchange and completion can be as long as a month or two or as short as a few minutes but is agreed when you are discussing the terms of the contract.
A popping of a cork or two is certainly in order when you relax in your new home for the first time! For us ‘ScoutBees’, we tend to favour a little ‘waggle dance’ celebration on behalf of our clients – but only in private of course!