At some point in their life most people buy a property. It can seem daunting at first but it needn’t be. Zevizo Properties the online estate agent tells you how.
From a first time buyer’s perspective, buying a home can seem like a complicated process. In reality it is very simple indeed. You may have decided to live with a partner, have children on the way, want to put down some roots in a preferred location or wish to make a long term investment. Here are our tips for securing your first home.
Do your homework
Successful house buyers put a great deal of work into their preparation before they start their search. Decide on the area for your search based on your needs. Work out how much you can afford to pay. There is many number of online mortgage calculators available. They can help you decide how much you can borrow, based on your income and give you a guide on how much this will cost per month. Think about the type of property you want based on your needs and future growth.
Start your search
The time for trawling around estate agent’s offices has passed. 8 out of 10 buyers now start their search online. Property portals such as Rightmove and Zoopla dominate the market. You can view all houses available in the area you want and include the maximum price you can pay. Always search over your maximum price as the right property could be yours with some negotiation. Include sites such as Gumtree in your search. Many buyers try to sell their property privately first to avoid estate agent’s fees. You might find a bargain or secure a property before it is advertised on the wider market.
Book a viewing
Once you have found a property you are interested in contact the estate agent, or the seller and book a viewing. The first viewing of a property will give you a sense of whether it is right for you. You can often tell just from the outside. The area might not be suitable or the house might be in disrepair. These are not necessarily barriers to a purchase for everyone but they may be for you. Many prospective buyers take a drive past the property before booking a viewing. This may save you wasting your time if you know it’s not suitable. It is also advisable to view the area at night. Streets and neighbourhoods can change dramatically after dark.
Book a second viewing as a minimum
Many people take less time to choose a house than a pair of jeans. A second viewing is the chance to look at your possible future home in more detail. This is your chance to be critical and to look at practicalities. This could include measuring up for your furniture, checking out any work that needs to be done or looking at little things such as the location of plug sockets etc. It is also your chance to ask questions of the agent or the seller that may have occurred to you after the initial viewing.
Make an offer
Always negotiate. As a minimum calculate a figure that is at least 20% less than the asking price. Contact the agent or seller and tell them how much you are offering. The offer may be rejected outright or considered with certain conditions such as a cash purchase or an early moving date. The agent/seller will consider the offer and get back to you with a response and you can then increase if need be. Don’t get over excited and offer a figure beyond your means.
Some people are lucky enough to be able to buy a property in cash. The majority have a mortgage. A mortgage is simply a loan from a financial services provider such as a bank or building society for you to buy a home. The loan will be secured on the property. That means that if you fail to pay your mortgage the provider can take possession of the property in order to get its money back. A loan will have an agreed term or time frame such as 25 years. You pay a monthly amount to the mortgage company for that length of time.
There are two different types of mortgage. A repayment mortgage means you pay back some of the interest and some of the outstanding loan amount every month. At the end of the agreed term your house will be bought and paid for in full. You may choose an interest only mortgage. This means that you only pay off the interest on the loan with your monthly payment. This will be a lot less than a repayment mortgage. However the loan amount will not be reduced so you will need to arrange some form of investment or savings plan to run alongside the mortgage. At the end of the term the interest will be paid and you would use your investment to repay the loan. There are advantages and disadvantages to both. Always consult a mortgage adviser or independent financial adviser to find the product that is right for you.
They will also help you to decide whether you want a mortgage that fluctuates with the banks interest rates, has a fixed payment for an agreed period or is capped at a certain right. It will depend on how much you are borrowing and the deposit you are prepared to pay. However much you borrow the mortgage company will ask you to pay part of the cost of the house in the form of a deposit. This is usually 5 to 10 % of the sale price. However this can be more or less depending on market conditions and your financial circumstances.
As soon as you have had an offer accepted begin the process of sorting your mortgage. This process can take time and if you have not had the loan amount agreed it will delay the purchase. If you are turned down by the mortgage company on the amount you wish to borrow it will waste a lot of time for you and the seller. You will be asked to provide proof of identity and proof of income so make sure you keep bank statements or pay slips from at least 6 months before.
Your mortgage company will require a basic survey to be done on the property so they know it is worth the price you are paying. It also gives you valuable information on work that needs to be done on the property or any concerns in terms of its structural soundness. You as the buyer will have to pay for this. Just because something is highlighted on a survey as an area of concern it doesn’t mean you should pull out. It may be cheap to sort and may give you some leverage to negotiate on the sale price. However significant structural problems may be a reason to walk away from the sale.
In order to transfer the ownership of a property, produce relevant contracts and complete the financial transactions between Mortgage Company and seller you need to enlist the services of a legal professional. It does not need to be a solicitor. A licenced conveyancer will be able to do this for you. Your bank or mortgage company may offer this service but you can go anywhere so shop around. Costs of conveyancing can vary hugely.
Stamp duty will have an effect on the cost of purchasing your property. Properties can attract stamp duty of between 0% and 7% of the purchase price dependent on certain thresholds set by the government. You as the buyer are required to pay this stamp duty which can be tens of thousands of pounds depending on the cost of the house you are buying. Even a pound less on the sale price can drop you into a lower stamp duty bracket so make sure you know the thresholds.
As it’s your first home you may have a small amount of items to transport to the new home. However you may need to enlist the services of a removal firm. Book this as soon as you have a firm date. Also shop around as costs vary widely.
Exchange and completion
These terms are used during the house buying process. Exchange is an agreed date for contracts of sale to be swapped between buyer and seller. Completion is the date when the financial transactions are completed and the property will actually belong to you. Exchange and completion can happen on the same day. More commonly they are about a week apart. Your solicitor or conveyancer will handle this process for you.
Changes to insurance policies
Obviously when you have a new address, you will need to update your contact details with any companies you use. This can be done at your leisure using the post office’s mail forwarding service. However you must make sure that your car insurance and home insurance are in place and at the new address the day you move. If you don’t update addresses for these products you will not be covered at your new address. So if your car is stolen from your new drive or the roof of your new house falls off on the first night you will have no comeback with your insurers.
Buying your first home can be daunting and there is a lot to think about. However if you do your research, agree what you can pay and enlist the right specialist advice and support you can deal with the process quite easily.
You can always turn to Zevizo Properties, the online estate agent if you require some more detailed advice.
Zevizo Properties is a national, online estate agent marketing properties on all the major property web sites. We can sell your property from as little as £445 plus VAT.