9 Steps to buying your first home
With new home ownership an apparent key feature of this governments plan to economic recovery, first time buyers are being offered financial assistance to get themselves on the property ladder. Help to Buy equity loans, shared ownership and NewBuy are three current home ownerships schemes in place to support this, with Help to Buy mortgage guarantees available from the start of 2014. Here at Nicholas George we are able to give advice, guidance and assistance to all prospective buyers throughout the purchasing process, whilst we hope the step by step guide below gives an outline to what can often be a confusing yet very important procedure.
Firstly you will need to work out your finances. Not only will you be required to pay a deposit, which we would suggest to be 10% or higher to secure a more attractive interest rate (if you do not seek assistance from a government scheme), but you must also consider the various costs including stamp duty, surveys and solicitors fees amongst them. On the whole lenders will approximately loan four times an individual or joint salary. We recommend to have agreed in principle a loan for the amount you wish to purchase a property for and are happy with this before you start dealing with estate agents.
A rather fun part of the process. Begin with deciding an area you wish to live in and talk to agents in that local area. Draw up a list of features which you need and would like your first property to have. When trawling through the online search engines this will assist in narrowing the list down to a few properties you can arrange to view.
Take your time when viewing a property, bring a tape measure, check through all the fixtures and fittings and keep your eye out for any signs of building defects. This is one of the biggest purchases in your life and a thorough inspection is needed of potentially your future home, take additional pictures if this will help you remember. It is very common for second or even third viewings of sale properties and the agent is there to help.
Once you have found the right property, make an offer to the agent. The first offer is usually below what you are willing to pay as a start to the negotiation. Make sure the vendor is aware you are a first time buyer in no chain with the finances in place and express any concerns and potential expenditures you may have noticed. An agent must put all offers to the vendor and respond with a rejection or acceptance. An accepted offer advances the process to formally exchanging solicitor’s details and the property should then be advertised with ‘sold subject to contract’. Bear in mind there is nothing legally binding about the sale at this point and either side can withdraw up until the exchange of contracts.
5. Instruct your solicitor
The agent will then assist in exchanging solicitors details with the vendor and they will make contact with each other. If you do not already have a solicitor, ask for recommendations from family and friend or your agent may be able to recommend some that they have previously had efficient dealings with. Your solicitor will check the contract sent from the seller’s solicitor as well as other checks with regards to the property’s history.
You will have to then formally apply for a mortgage. Once this has been agreed with a lender you will receive a mortgage offer document which you may present to your solicitor. This will be agreed ‘in principle’ and may be subject to certain conditions such as obtaining a property valuation.
We would recommend obtaining a home buyers survey at the very least, this will point out some issues you may or may not have noticed already. Dependant on the age and condition of the building you may also wish to get a buildings survey to unearth any more serious issues. Results from both of the surveys may affect your offer and it is not too late to negotiate.
Once both parties are completely satisfied and all queries have been answered it is time for both parties to sign the contract, this is the point of no return and the purchase will be legally bound following this. Confirm with your solicitor the finances are in place and prepare to assume responsibility for the property by obtaining buildings insurance.
On completion day your solicitor will pay over the monies and you will be due to pay all necessary fees. You may collect the documents and keys to your new property!