Step by Step Guide to Buying Your First Property.

Buying your first property can seem complicated but if you understand the process you can save time and money.

Here is a brief guide to the process of buying your new home.

Organise your finances

Before you do anything else, the best place to start is to organise your finances. Get together your latest bank statements, your P60, payslips or accounts and create a realistic budget (if you don’t have one already) and detail all your monthly income and outgoings. Find out bills and compile all the information you will need later, like your proof of ID, proof of address, etc. Trim back any excess expenditure and try to illustrate a regular saving habit.

Decide your budget

Once you have all the information together, it’s time to decide just what you can afford. The type of home you plan to buy will play a factor, but primarily this sum will be calculated based on your household income, monthly expenditure, level of deposit, credit history, type of mortgage, etc. At Mortgage Required we can quickly help you calculate this figure.

Find out about Mortgages for First Time Buyers.

Decide what type of property you need

Once you know what you can afford you need to establish how much accommodation you need for your family. Bedrooms, parking, location; all of these factors need to be addressed so that you can come to a compromise based on where you want to live and where you can afford to buy the property you want to live in.

Obtain a Formal Mortgage Offer in Principle

In the meantime, you should start thinking about applying for a mortgage ‘in principle’. This will help you to be taken seriously by the selling agent when you eventually start making offers. It’s all well and good making an offer, but unless you can illustrate how you intend to buy the property, your offer is just ‘hot air’. Get a mortgage offer in principle early in the process by contacting an independent mortgage adviser

Start the search!

You should now dedicate some time to trawling the internet and visiting agents in the area in which you’re interested in living. Try to build some relationships. Explain what you are looking for and in what time frame. Make it clear what your budget is and if you have a mortgage offer and a decent deposit, tell them!

Make some offers

Don’t be too silly, but it doesn’t hurt to make a few offers on the property you like. This is a bit like dating. You don’t have to marry your first date - just don’t be too promiscuous with your offers!

Negotiate

Don’t be afraid to negotiate. And remember, price is not the only factor. Proof of funding, the ability to move quickly, etc all have a bearing on the attractiveness of your offer. Ask for more than you want, be polite and explore what’s possible.

Agree all the terms

Once you have terms agreed make sure you agree everything. That means setting a realistic timetable, detailing what is and is not included in the sale, what the offer is conditional upon (for example a survey, valuation or the sale of another property) and make sure you get the process underway by instructing your solicitors clearly.

Instruct a good solicitor / conveyancer

As with all advisors, try to employ the best you can afford. Who’s the best? Well personal recommendation can’t hurt, ideally from friends, but nowadays most modern firms are keen to share glowing testimonials from former clients. Check out their website.

Read our article: How to choose a conveyancer.

Keep the pressure on

Don’t just assume everything is being done. Keep on top of the process. Speak with the agent, the seller and your solicitors regularly. This might be your home, but it’s just another file to everyone else. Keep on top of it.

Plan for the Big Day

The legal process is a lot simpler than most people would have you believe. Most house sales are done using a standard Law Society contract which is filled in by the parties to the contract via their lawyers. The main issues that take the time are;

Obtaining the valuation and subsequent mortgage offer

Obtaining satisfactory responses to buyer’s enquiries and to local searches, etc

Making sure any chain is able to perform when you are ready. In reality, this usually causes the longest delays if you are not buying a new home.

Make sure you have allowed for other costs like installing phone lines, replacing curtains or carpets and paying stamp duty!

Have a Plan B

When you agree to buy a new home (at least in England and Wales) you are simply agreeing to agree. In other words, you have agreed the terms, but they now need to be clearly recorded in a contract which you are then required to sign. Once signed, you may exchange contracts with the other side. At this point, you are legally obliged to do what the contract says you have agreed to do, subject to its terms and conditions.

It takes a little time before your solicitor will advise you that you can exchange. For example, you need a mortgage offer in place and your solicitor will want to know that not only are you who you say you are but, you also have the ability to exchange. This will normally require you to put your solicitor ‘in funds’ so that he can pay over a deposit upon exchange of contracts. This is usually between 5 and 10%.

After exchange, you will have a set day to complete. On this day you own the property and can ‘take possession’ or move in. Sometimes, there can be a hiccup. Someone might be taken ill or someone else down the chain has a problem. In a bad scenario you might end up sitting outside your new home with a removals van waiting to complete - and it doesn’t happen. Have a plan B in place for last minute glitches. Most removals companies have storage for such eventualities and you may well be able to reclaim such costs from the person that caused the delays.

What is the Difference Between Exchange and Completion?

Allow for a contingency

Moving home is expensive. Always allow for a little extra cash flow or keep a credit card clear for that figurative rainy day when the boiler blows up or you forget there is 20% VAT on the solicitor’s fees!