Important Advice for First Time Buyers
The rise of property shows has made us all want to buy a house, possibly one that is a shell, and turn it into our dream home! But, in reality, the prospect of buying a house is daunting for many first time buyers. Worries about arranging a mortgage, paying too much for a property, and the deal falling through, someone else putting a higher offer in at the last minute, the survey revealing some nasty home truths (excuse the pun!), to name a few.
…And buyers are right to be cautious, buying a property is probably the most expensive investment anyone will make, so naturally you want to make sure the buying process is as low risk as possible and that a the sale is completed quickly without any last minute glitches.
Ascot Mortgages, will not only help you arrange the financial aspects of buying your new home, but we can also help to manage the buying process, we will work directly with your estate agent and solicitor on your behalf to help keep the sale on track.
First Considerations (before you decide to start viewing properties)
Work out your budget / how much you can borrow
This is likely to be one of your most important criteria’s for your search so it is vital that you have a good understand what your maximum budget would be. If you are not sure how to work this out, give Ascot a call, it will take us less than 5 minutes to accurately assess this for you. Once you know your budget you can start to look at realistic properties.
How much deposit you have, how much do you need for other fees
Make a full list of all the other average fees when you are buying a property. These will soon add up, and if you have not accounted for these separate they will eat in to your deposit and may reduce your overall ability to borrow. Consider: stamp duty, legal costs, survey fees, removal fees, and mortgage arrangement fees, plus building insurance, all add up.
Decide what type of mortgage would suit you best
There are many different types of mortgages available, and a range of government schemes to for first time buyers, so depending on what type of property you would like to buy, you may be able to get help with a deposit, or be able to secure a lower rate mortgage if your parents are willing to act as guarantor. Again, give Ascot a call and we will be able to explain all this to you, and see what you are eligible for.
Viewing Properties (and which properties to view)
Location & Transport links
For most people the area is most important factor, particularly for commuters, but as well as thinking about location in terms of distance, consider also accessibility as some areas, whilst further away can offer better transport links. Before you decide which areas to view properties in, it is always a good idea to go and have a drive around the area first.
A good location will usually come with a premium
Try and buy in the best location that you can, because material things (like an old kitchen or dodgy wallpaper) can be changed, whereas location has a big bearing on resale value. Do some research using websites like upmystreet.com to check out crime rates and other important factors.
Use your buying position to negotiate a better deal
Being a first time buyer already puts you in a strong position, and from an estate agents point of view you are a very desirable buyer as you have the potential to complete a property chain. However, also consider asking the vendor to pay stamp duty fees, your legal costs, and removal fees, instead of lowering the cost of the property. This will help to minimise the expensive initial outlay.
Remember asking prices are just that, and offers are usually welcome
Don’t appear too keen when you first view, as much as you may love the property! This can undermine your negotiating skills! Check the land registry for similar properties and prices. Remember the estate agent has to pass on all offers to the buyer, whether they believe they are too low or not – the offer needs to be passed on. Some buyers deliberately make offers much lower than the asking price in order to lower the seller’s final expectations of the selling price. However be cautious about submitting multiple very low offers to the same estate agent as it may cause friction and demotivate the estate agent with regards to negotiating an acceptable sale price for all involved.
If things go wrong
Don’t despair if the reality of your search doesn’t meet your expectations. There are schemes to help first time buyers, such as Home Buy and shared ownership schemes. Be prepared to wait a while, and to see many unsuitable properties: don’t rush into buying a house because you think it’s a great price, when you have reservations about it.
Watch the property market: the Government’s changes, for instance the scrap of no stamp duty on properties, can be important in your purchase.
Completing the Sale
How long the process takes
The process usually takes 2-3 months. However, this can vary greatly depending on the number of people in the chain and whether the chain is complete or not. This means there needs to be people at each ends of the chain who are not also buying or selling another property. For example as a first time buyer you would be at the very start of the chain, and someone selling their property to move in to rented property would be the very end of the chain.
Choosing a solicitor
Once you have chosen your home, you need to find a solicitor who can complete the process for you. Conveyancing is possible without a solicitor, but for first time buyers it is far better to invest in a good solicitor, to make life much easier.
Getting the property valued and securing a mortgage
Before the mortgage will be formally agreed, (you will have previously been given an agreement in principal which tells you who much you can borrow), your formal mortgage offer will be provided once the mortgage company have sent one of their own valuers to the property in order to ensure it is worth the agreed price. Since the property market crashed in 2007, it has been more common for mortgage lenders to mark down the value of a property; however in most cases the seller will have no choice but to reduce the price accordingly.
Taking out your own in-depth survey
Some people choose not to, because mortgage lenders insist on basic check of the property: however, this is not as comprehensive as a survey. Like hiring a solicitor, it is better to invest money in having a professional check your new home, than risk buying it and having to spend thousands later on. The valuation, and the survey, also check the property is worth what you have arranged to pay for it.
Complete any necessary legal work, and have any draft contracts issued
At this point, arrange building and contents insurance and also consider additional policies, like life insurance or income protection insurance.
The the final part!…
Before you exchange contracts, make sure you iron out any questions, are completely clear on the agreed completion date (when the sellers are moving out, and when the money will actually be paid and you get the keys) most people exchange contracts on a Friday and complete the weekend after, however there is no fixed rule about exchange and completion, you can do this on the same day if you choose – but for practical reasons and planning last minute things, some people prefer to wait a week to ensure everything is absolutely final before they pack up the last remaining things!
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