22nd November 2018

Ultimate First-time Home Buyers Guide

Our team at Conveyancing Direct understand that as a first-time buyer, taking the first step into purchasing a home you can truly call your own is a dream come true. With our approach and expertise, you can relax in the knowledge that we have smoothly overseen the sale and purchase of thousands of properties. We take care of the formalities so you can focus on planning for your future in your new property.

For your peace of mind, we work hard behind the scenes to ensure every matter, which could pose a problem to the purchase, or enjoyment of your home, will be found and managed. We pride ourselves on balancing speed and efficiency with thoroughness of process, ensuring you can move into your new home with the confidence that no compromises have been made.

In this guide, we outline some of the essential considerations for first-time buyers, to ensure the process goes as smoothly as possible.

Check your property is the right purchase for you

For those who have never purchased a home before, it is important to make a sound, reasoned decision, and not rush to buy the first property that captures your interest. As hard as this may be in reality, especially when excitement takes over, making the right choices now will mean you put yourself in the best possible position in the future.

Much can change in only a few years, and what you think you need now in a property may not be true in the near future. You may decide to get married and have children or extend your property at a later date. If these are distinct possibilities, consider the number bedrooms, outdoor space, and proximity to main roads. If the property you have your heart set on requires some renovation, ask a builder to your give you an honest appraisal of the condition of the house and how much it will cost to do the work you would like.

It is also important to think about other factors such as how much light is in the property, neighbours, is there parking, storage facilities, how big are the rooms, and do you like the layout?

Top-tip: No matter how attached you are to a property, take a friend or family member to a viewing, and ask them to be as objective as possible. This will ensure you remain grounded in your decision making. Yes, the kitchen/diner is beautiful, but is the rest of the house going to meet your needs? Or while the house might be lovely, are you going to regret the lack of outdoor space. Of course, there may be compromises to be made, but another pair of eyes can ensure you make the right decisions.

Ask questions, lots of them

When viewing a property, it is a good idea to take a list of questions with you to ask the Estate Agent. Doing so will ultimately ensure you make the best choice and help secure the optimal deal for you. Ask questions such as:

  • Why is the owner selling?
  • What problems should I be aware of regarding the property, land, and area (the agent has a legal duty to disclose any information which you should be aware of)?
  • How much interest has there been and when did the property go on the market?
  • What position is the seller in – are they keen for a quick sale, have they bought elsewhere?
  • Is the seller open to lower offers for a quick sale?
  • Can you tell me about the upward chain (assuming there is one)?
  • What chattels are included in the sale?
  • Are there any restrictive covenants I should be aware of?
  • How much are the management fees (in the case of a leasehold)?

By asking questions, you can not only avoid a costly mistake, but you may be able to include items in the sale that were not originally part of the deal. Furthermore, you may be able to secure a much lower price if you understand the seller’s motivations. It doesn’t hurt to ask, in fact, it can save you thousands.

Work out the real cost of your new home

Many new buyers have worked and saved for many years to raise a deposit for their new home. With the average house price now £225,047, even a ten percent deposit is a substantial amount, especially when paying rent, bills, and other costs such as student loans. Therefore, it is vital to understand the true cost of buying your property, so you can ensure you plan accordingly. Some of the additional costs you may not have considered include:

  • stamp duty (there is currently no stamp duty payable on the first £300,000 for first-time buyers)
  • mortgage advice and broker fees (if applicable)
  • valuation fees
  • survey costs (the amount varies depending on whether you choose a more basic or extensive survey – cheapest is not necessarily advisable as serious structural problems could cost thousands in the future)
  • legal fees
  • electronic transfer fees
  • removal costs
  • monthly bills (including insurance, council tax, mail redirection, and utilities)
  • maintenance and repairs
  • cleaning costs (perhaps for your existing rental, or for your new property)
  • appliances
  • oil tank filling (if your home has oil-based heating)

Research your conveyancer

Not all conveyancers are equal – to assume they are can be a costly mistake. It is highly recommended that you speak to your prospective conveyancer to understand how they work, how available they are to speak to you, the extent of the checks they will carry out on the title, property, and mortgage. Will you have the direct contact details of the conveyancer managing your case?

Ask them how they keep the process moving along swiftly – often conveyancers will wait for the seller’s solicitor to complete an action before continuing the process, which can lead to lengthy delays. Remember that paying a little more now for a quality conveyancer can save you thousands in the future.

You need someone who is highly experienced in performing all the due diligence relevant to property purchases. Just following a tick-list is not enough. The best conveyancers think laterally and based on the circumstances of your case, will adjust their process, make further checks – and most importantly, advise you if there is anything that they are concerned about. This ability to find potential problems is a skill that comes with experience; we have specialised in residential conveyancing for over 25 years.

Freehold or leasehold?

As a first-time buyer, it is easy to miss details which are vitally important to your house purchase. One such factor is whether the property you are looking at is freehold or leasehold. With freehold, you own the property and the land on which it sits indefinitely whereas with leasehold, you only own the lease to the property for a fixed period and you may not own the land at all. Flats and maisonettes are most commonly leaseholds although you can get leasehold houses too. If you have any doubts, or are unsure of the ramifications of buying leasehold, speak to a specialist conveyancer.

Top-tip: If you are purchasing a leasehold property it is important to speak to your conveyancer as the lease may need to be renewed. To avoid paying additional costs because of marriage-value (an amount paid by the leaseholder to the free-holder which represents half of the increase in value of the property), it is best to extend before the lease term gets to 80 years. With less than 80 years remaining on the lease marriage value will kick in. At this point it becomes more expensive.

Choosing a lender

As a first-time buyer, you may be tempted to speak to your bank for lending options. This is natural, as you already have a relationship. But it pays to shop around for the best deal.

Not only will you need to select a lender, but you will also need to select the mortgage that has the most favourable terms; decisions you will need to weigh up include:

  • fixed, variable, or tracker interest rates
  • the overall duration of the loan (typically 25 – 30 years)
  • application fees

Many potential buyers choose to use the services of a mortgage broker. Brokers generally do not charge you; they are paid commission from the lender. Crucially, they have a view across the whole mortgage market, so can easily find the very best deal for you. The difference between a well-researched deal and one that is not can equate to hundreds or even thousands of pounds.

Our role as a conveyancer is to review the mortgage documents, and to alert you to any fine print that you may not be aware of, or inform the lender of any errors they should correct, before you sign on the dotted line.

Don’t skimp on the property survey

Investing in a comprehensive full building survey could be the best money you ever spend when buying a property. By spending a few hundred pounds more on a complete survey, you will be alerted to any structural problem with the house. Something that lower cost surveys may not pick up. Any defects can be factored into the final purchase price you negotiate, or you can ask for the problem to be rectified before completion of the sale.

Nearly there

If you have reached this stage, you are near the point of no return. With your funding finalised, and property and land searches completed satisfactorily, you will be ready to pay your deposit, and exchange contracts. This is the final point after which you are legally obligated to proceed with your purchase.

The very final step before you can take the keys of your new abode is for your conveyancer to receive the funds (i.e. from the lender), pay the seller the full balance (after your deposit), pay any stamp duty owed, and begin the process of registering the property in your name with the Land Registry.

Congratulations, you now own your first-home

Call Conveyancing Direct today on 01424 464900, email us at enquiries@cdpll.co.uk or if you are local, pop in personally to discuss your exciting plans at our office in St Leonards on Sea.