First time buyer guide to home-buying

Buying a home is a huge financial commitment and can be daunting – especially if you’re a first-time buyer. Kym Brook, a Solicitor in our Conveyancing Team, outlines the steps you need to take when buying your first home.

Find a property you can afford

Before you start house-hunting, it’s a good idea to work out what you can afford to spend on buying a house or a flat and your monthly mortgage payments. An Independent Financial Adviser (IFA) will discuss all of the options and limitations for your own circumstances.

Remember, your savings will have to cover not just the deposit, but expenses such as mortgage fees (can be between £0-£2,000) and Stamp Duty which is a tax on property purchase; it applies only to properties costing more than £125,000.

Choose the right mortgage

It’s never too early for you to start thinking about arranging a mortgage as this can be time-consuming and cause delays after an offer has been made on a property.

Your IFA will walk you through this process and once you’ve found a mortgage product you like, they will help you make an application. The mortgage lender will review your application and agree it as a mortgage ‘in principle’. This tells you how much money they will lend to you and the interest rate you will pay.

Find a property and make an offer

This is where it gets exciting! Once you’ve found the home that you want to buy, the next step is to make an offer, usually through an estate agent.

The person selling the house pays for the estate agent, and therefore the agent’s role is to make the best deal for their seller, nonetheless they are instrumental in getting the sale through and you will probably be in contact with them throughout the process.

Your solicitor

Once you have an offer accepted you will very quickly be asked for your solicitor’s details. The solicitor will handle the legal work around the property – this is known as conveyancing.

Kym explains what the Conveyancer does “A conveyancing firm will provide you with a quote – it is important to be sure that this includes all of their fees plus any payments to third parties (for example searches, land registry fees) and you will usually be asked to pay for the third party costs up front.

“Once you give the go ahead to your chosen conveyancer, you will need to complete quite a lot of forms and provide ID documents. As conveyancers, we then begin submitting searches to the local council to check whether there are any planning or local issues that might have a detrimental effect on the property or its value. We inform you of any issues that are important, in case any make you wish to pull out of the sale.

“Later in the process the Conveyancer liaises with the seller’s solicitor, working together to agree a contract of sale, each conveyancer is ensuring that there are no issues for their own client left outstanding, so this is a thorough and sometimes lengthy process, however you may not know much about the exchanges between conveyancers until the contract is almost ready to exchange.”

Surveys

A surveyor inspects the property to check for problems, which might affect the value of the home. There are different types of survey to consider:

Valuation survey

This is done by the lender to ensure the property is worth the price you are paying before they approve the mortgage. It is not an extensive survey and will not identify any repairs that may be needed. Some lenders might not charge you for this, others may charge in the region of £150.

It is recommended that you commission a survey on the property to help avoid hidden costly problems in the long run. It is your property, so it is in your interest to be aware of any problems. It can also help you to renegotiate the price (if the property requires a repair that will cost £5,000, you can ask the seller to lower the price of the property by that much).

Condition report

Basic ‘traffic light’ survey and the cheapest. It’s most suitable for new-build and conventional homes in good condition. No advice or valuation is provided and this costs around £250.

Homebuyer report

Suitable for conventional properties in a reasonable condition. This is a much more detailed survey, looking thoroughly inside and outside a property and also includes a valuation. This typically costs from £400.

Building or structural survey

The most comprehensive survey; particularly good for older homes or homes that might need repairs. You can expect to pay £600 or more.

It’s not too late to change your mind

You can pull out and cancel your mortgage application before you have exchanged contracts. It is better to pull out rather than risk buying a property that might cost you more than you can afford in the long run. Be aware that you might lose some of your money depending on how far you’ve gone in the process.

Exchange contracts

Your conveyancer will tell you when the contract is ready for your signature. They will then exchange, with your prior authority, your signed contract with the seller’s solicitor.

Before signing the contract, your solicitor will go through it with you to check that all the details are correct. Make sure you’re happy with what the sellers have agreed to leave in the property and that all your queries have been answered.

Now, you and the seller are committed to the sale. Should you choose to pull out at this stage, you will be able to the seller for the full 10% deposit sum.

Completion and final steps

As your conveyancer, we will now transfer the remaining money owed to buy the property from our bank account to the seller’s solicitor’s account. Since some of the money comes from the mortgage provider there will be a telegraphic transfer fee (which should be included in your original quote).

It is at this stage that you will need to pay your solicitor’s bill and stamp duty (which your solicitor will also arrange payment of for you).

Your conveyancer will register the sale with the Land Registry to show you as the new legal owners.

Kym concludes “It is a lengthy and intimidating process buying a property for the first time! However, with the sums of money involved it is reassuring to know all the steps that are being taken to ensure that you are buying a solid investment. You should never be afraid to ask your solicitor a question, no matter how silly it might be. You are paying us to help you through the process and that is exactly what we are here for.”

Our Conveyancing Team, based in Christchurch, also cover Bournemouth, Poole and the New Forest. If you have any questions, you only have to ask us at Frettens. Please call 01202 499255 and Kym or a member of the team, will be happy to chat about your situation and you particular requirements.