Buying a home can be as daunting as it is exciting, especially if it’s your first time! The decisions you make along the way can have a big impact on the success of your purchase and save you money in the process, but it can be difficult to know where to start. To help you as you embark on this exciting journey, we’ve broken down the key steps that you’ll encounter along the way, and explained some of the language you’ll hear, to make getting on the property ladder that bit easier.
Do the maths
The first step to buying a home is working out your budget. This starts with understanding what you have available for a deposit. The deposit is the cash amount you will need upfront in order for a mortgage provider to lend you the balance of your property purchase price. This is normally a percentage of the total purchase price, and the size of your deposit will directly influence how much you can borrow and therefore the maximum purchase price you can consider. This can be an extremely confusing area for the uninitiated, so speaking to a financial services expert is highly recommended. Our partner, Sussex Mortgage Services, are more than happy to offer you impartial advice, and explain a fixed rate from a tracker. When you’re ready to proceed, they can help you get a mortgage agreed in principle; this is the initial agreement from your chosen mortgage provider that they are willing to lend you a certain amount, which you will need in order to make an offer on a property.
If you haven’t done so already, look into opening a Help to Buy. An ISA (individual savings account) is a tax free way of saving, and the government have created specific ISAs for first-time buyers, which will boost your savings by 25% when you save up to £200 a month. It’s also worth looking into government schemes, such as Help To Buy, at this point. There are different options available depending on your circumstances, and the funding from these might expand the horizons of your property hunt. If you’re overwhelmed by the choices and not sure which is right for you, Mishon Mackay have a specialist team who can advise you and explain your options, so feel free to give us a call.
One more thing to take into account when considering your budget is stamp duty. This is a tax paid on a property purchase. Following changes in the Autumn Budget, first-time buyers are now exempt from paying stamp duty on properties up to the value of £300,000, but if your property is worth more than that then you will have to factor this into your costs.
Once you have a clear idea of what you can afford, you’ll be in a position to discuss your requirements with an estate agent. Our team of friendly experts can tailor property searches to your needs and budget.
Pick a location
It’s highly likely you already have a dream location in mind, and it’s equally likely that this area might be a stretch for a first-time buyer. Once you have your budget, you may face a dilemma between your ideal home and your ideal location. Are you prepared to sacrifice that garden to be near the sea? Or would you rather have that second bedroom than be able to walk to work?
If your search takes you to new areas that are less familiar to you, take time to get to know the neighbourhood. Have a wander round and see where the cafes, shops and pubs are, what parks and community spaces are available, and what the general atmosphere is like.
If your estate agent is local and well-established in this location, they should also be able to share lots of information with you on the area to help you learn more.
Ask yourself if there are any additional costs you might not have thought of. For example, will it cost more to get to work? Will you need to consider investing in an annual parking permit? Council tax can vary greatly, so it’s worth finding out how much you’ll be paying. If you regularly work from home, or rely heavily on the internet in your personal life, you’ll want to make sure the connection speed meets your needs.
Have a keen eye
Pay attention to all the little details in every viewing; they might turn into big problems in the long run! We’ve pulled together a checklist that will guide you through your viewings:
- Look for things like damp and mould; you’ll know they’re there if there’s a mouldy smell, flaky plaster or watermarks around skirting boards, ceilings and walls.
- Make sure there’s enough storage space, an all-too-often overlooked asset. Does the property have built in wardrobes, for example? What cupboard and shelf space is available in each room? If you’re concerned about storage options, your agent may be able to assist with local contractors to put in cupboards and wardrobes to make the space work for you.
- On this note, make sure there’s enough human space too. When you’re buying a property, you’re probably planning on staying there for a few years, so make sure there’s enough space for you to be comfortable in the long run – you don’t want to outgrow your home!
- Take a look at the windows. If they’re well maintained, chances are the rest of the house will be too. Make sure there’s no flaky paint or condensation, which would indicate that the windows could need repair or even replacement.
- How are the power points? If the electrics look old then it’s possible they no longer meet the relevant standards and may need updating. Are there enough points in each room for your needs?
- Is there a burglar alarm or other security features?
- Does the property use electricity, gas or both?
- Check any communal areas to see if they are well-presented as this is a good indication as to whether the building is being well-maintained.
- Do you feel at home? This is maybe the most important question to ask. When you find the right property, you’ll know. After all, you need to feel right in your new home! Take a seat and spend a little extra time imagining living there.
Make an offer
Once you’ve found a property you like, the big step is to make an offer. What offer you want to make will depend on several factors, not least what the vendors are asking for the property. Other key elements to think about are:
- Demand in the area – are similar properties selling quickly or slowly, and what prices are they going for?
- Existing offers – have the vendors previously rejected lower offers, or are their other interested parties who have recently made offers or are likely to do so soon?
- Vendor circumstances – are they in a hurry to move, or do they have time to be more selective? Are they open to negotiation?
- Your budget – what is the absolute maximum you can afford, will this need to include any work on the property and what is this likely to cost?
- How long do you intend on living there? The longer-term the investment, the more sense it makes to push your budget harder to secure your dream home, as an increase in purchase price could work out to be minimal when spread over the duration of your time living there.
Having an estate agent you can trust is incredibly valuable at this stage so they can give you honest advice about the market and the vendor. They can also help guide you through further negotiations if the vendor rejects your first offer.
Once your offer has been accepted, you can proceed with instructing a solicitor and making your mortgage application. Once your mortgage provider has evaluated what they believe the property is worth and the solicitor has arranged the relevant checks and survey, issues may be uncovered that affect the value of the property, so you may need to negotiate further on the price.
As part of the offer process, you will be required to pass money laundering checks. Our team can guide you through this, so there’s no need for you to worry.
Instruct your solicitor
You’ll need a solicitor to carry out the conveyancing (a fancy word for preparing property documents). Without one, you won’t be able to take legal ownership of the property. Just remember: this is another additional cost, so make sure you’ve budgeted for it from day one. You can instruct a traditional solicitor, or an online conveyancer if you prefer.
With 30 years’ experience in the Sussex property market, we’ve come to know the sector extremely well. If you’d like us to advise you on finding the perfect solicitor for your needs, just ask!
Don’t forget the survey
You’ll have to have a survey carried out on the property, for mortgage purposes, as well as your own peace of mind. There are many types of survey, depending on the age, condition and type of property you’re buying; your estate agent and solicitor will be able to offer advice on the survey you need. The survey checks the house for any potential issues or damage, as well as making you aware of any hidden costs or responsibilities (for example, did you know that if there is a church located close to your property, you may be required to pay a contribution towards the upkeep, or take out insurance to avoid it?). The surveyor will then put a value to the property, giving you a fully informed view of the value and any potential costs that you may need to budget for. This will also be vital for the mortgage lender before they make you a formal offer. Again, this will be at an additional cost, so make sure you’ve taken it into account.
Exchange and complete!
These are the final steps in the process, and this can sometimes be the most stressful time as you wait for that home to finally be yours. Ensure you have a good relationship with your estate agent so that they can keep you updated throughout the process. At Mishon Mackay, we make it our mission to make the buying process as problem-free as possible. You can always check our Trustpilot for added peace of mind!
You can choose to exchange (when the solicitors formerly exchange contracts, securing the purchase) and complete (the moment the property officially becomes yours and you can collect the keys) on the same day, or have a gap in between, depending on what suits you better, and on the availability of the funds from your mortgage provider, but your solicitor will need to agree this with the vendor. After that, you can start arranging your furniture!