First –Time buyers guide
So you have decided to stop throwing your money down the drain by renting and buy your first property, so what do you do first? It can seem like a minefield out there but with a few basic tips you will be well on your way to owning your first property!
1. Planning and Budgeting
Before you start going to look for your new home, you need to work out exactly what you can afford. Doing this will help you to plan and narrow down your search for property, making sure that you’re not going to overstretch your budget. In the current climate it is essential that you have a reasonable deposit to obtain a mortgage that will not weigh too heavily on your shoulders. Consider too that you will need to set aside funds to cover your mortgage fees, valuation costs as well as solicitors fees and of course stamp duty, the rate will vary according to your purchase price.
2. Mortgage Options
Financing your dream home should be worked out before you even consider browsing the property portals or booking your first viewing. It’s important to meet with your financial advisor very early on to get them to provide you with an AIP – agreement in principle. Armed with this your estate agent will take you much more seriously and work much harder on your behalf as he knows he is dealing with a qualified buyer.
3. What to Buy
Make a wish list containing your 10 most important requirements for your new home. Location has to be top of the list, consider things like size; do you need outside space and car parking? Consider the aspect, do you require a view, wooden floors, do you prefer apartments or houses. Remember your wish list is personal to you and your requirements but also look at the bigger picture remembering that one day you will want to resell the property too. The list will be your guideline but do remember buying the perfect property is often about compromise, most buyers are prepared to give up something for something else outstanding.
4. Registering with Agents
Now you know what you can afford and have lined up a mortgage in principle it’s time to get out there and start viewing. Begin by registering with all the agents in the location you have chosen to buy in. I would strongly advise that you do this in person if possible as you want the agent to meet you and most importantly remember who you are in case that one off amazing property in your budget hits their books, you want the agent to think of you straight away. If there’s not much available give them a call once a week to check if anything new has come in – this will help to establish a good relationship with your agent and put you ahead of the game.
Be prepared to drop everything to view at short notice. When an agent gets a new instruction and calls you remember that his colleague is also busy calling their applicants too. If you are ridged with viewing times then you may miss out, flexibility is the name of the game.
6. Making an Offer
Once you find the right property make sure that you have all the important information you need prior to making an offer. If the property is a leasehold find out what the service charges, ground rent and length of lease is. What is going on in the immediate surrounding areas? Is there a 40 storey tower about to go up next door that will obstruct your view? Ask what is in included in the sale, and if there’s something you like that is not, consider making your offer to include these items. Take guidance from your agent with regards to the level of your first offer, has there been a previous offer, will the fact that you’re a FTB (an unencumbered buyer) mean the seller would consider accepting less? And finally do remember that all first offers are likely to be rejected, so do decide what your absolute maximum offer will be and hold that back to have some negotiating power later on in a bid to secure the property.
7. The Legal Process
Once you have had your offer accepted you will need to instruct a solicitor, the legal work involved in transferring a property is called conveyancing. If you don’t have a solicitor then try to get a recommendation via your agent, using the agents recommended solicitor will pay off in the long run as it means the agent will be able to control the purchase easier as he will be able to get regular updates as to how the purchase is progressing and keep you informed. Next you will need to let your Financial advisor know that you have had your offer accepted so that he can process your mortgage application and instruct a valuation survey, once this has been carried out you will receive a mortgage offer and the financial side will now be complete. Once your solicitor is happy following all her legal enquiries she will report to you and if you are happy she will ask that you transfer your deposit for the next stage – exchange of contracts, this will make the process legally binding.
A completion date that both parties are happy with will be set prior to exchange of contracts. On the day of completion your solicitor will await receipt of your mortgage funds from the lender, on receipt of these she will then transfer the funds to your sellers solicitor, once they confirm receipt of the funds then legal completion takes place and you will now be the proud owner of your first home! Finally your agent will call and arrange for you to collect your keys, congratulations!