Probably the most important financial decision you will make in life, will be when you purchase your first home. Whether this purchase is on your own, or with someone else, this is likely to shape your future in the world of owning your own property.
We understand how exciting and utterly terrifying this can be. Our Sales Team at 3Keys Property will be with you every step of the way to help you understand the stages of your purchase and help you prepare for owning your first ever property. We are accessible six days per week and will work hard to ensure you understand every part of your move and offer guidance whenever needed, no matter how small the worry or concern.
Here is a step-by-step guide to help you get started
The quote ‘time spent on preparation is seldom wasted’ could not be truer when embarking on this journey. Before you even begin to look for your dream home, there are some key points to give consideration to;
This should always be your starting point. Are you purchasing the property with the help of a mortgage, or are you in an enviable position and can purchase a property with cash? Either way, a discussion with a qualified Mortgage Advisor/Financial Advisor is key to understanding the benefits of both options, taking into consideration your personal circumstances. What is good for your friend, may not have the same outcome for you. Your Advisor, whether they are independent or tied to a particular lender, will need the same information. So be prepared to supply;
- Bank statements (3 – 6 months’ worth)
- Employment details as well as Pay Slips, P60 or Accounts if you are self-employed.
- Information of existing credit commitments such as store cards, credit cards, bank loans, car loans etc.
- Proof of address such as drivers’ licence, bank statement, utility bill.
- Proof of ID – this must be original and not a copy. Passport, drivers’ licence if not used for proof of address, original birth certificate if the other items are not available.
- Any information that you are aware of that may affect your credit rating (CCJ’s, arrears, bankruptcy, criminal offence involving fraud etc.)
Once your Advisor has all of this information, they are able to prepare a report which normally involves a Credit Check and should provide you with the information you need. This report is called an Agreement in Principle – AIP or Mortgage in Principle – MIP. This report is not a Mortgage Offer and there is no guarantee that you will be able to purchase the property you want. Other factors will need to be considered such as the amount of cash deposit you have (most lenders need at the very least 10% cash deposit, some insist on 15%), your employment status and the property you plan to purchase. However, the AIP or MIP is a very good starting place and your Advisor should be able to reassure you of your chances of succeeding in purchasing your first property as well as the likely monthly cost of doing so.
In addition to your monthly mortgage payments, a good mortgage advisor should be able to estimate the cost of other essentials such as survey fees, solicitor fees, searches and stamp duty – subject to the purchase price of the property.
Finding your dream property
Now you have your budget, you should now be able to establish your price range. Just because you can afford a £400,000 property, doesn’t meant you want to purchase a £400,000 property. You need to consider your own circumstances and take the following into consideration;
- Space – how many bedrooms do you need and how many would you like?
- How long are you likely to live in the property before moving again. This may be your forever home; in which case you have a lot of guessing to do about your future needs or this may be a short-term stepping stone. Both are important in picking the right property.
- Location, Location, Location! Where are you buying your first property? Is it close to friends or family, is it close or within good commutable distance for work, is the area somewhere you want to settle long term and if so, what are the local amenities like etc.
- What type of property do you want? There can so many beautiful homes to choose from both and new. Where a property is concerned, beauty is in the eye of the beholder. If you choose an old property and plan to ‘put your stamp on it’ make sure you have the time and resources to do it. This can have a big impact on your budget so make sure you choose carefully and have a good idea of the cost before committing.
Sometimes, people just don’t know until they see the one! Register your details with your local Estate Agent and check Rightmove and Zoopla, you can request alerts from both websites if you have an idea of where and what type of property you want. A good agent will be in touch with you as soon as they have a property, they think suits your requirements.
Once you have found a property you would like to view, make sure you have checked the sales particulars, floor plan, video and area before committing to a viewing. Once you are happy, contact the agent who should be able to arrange a viewing for you at a time convenient to both you and the vendor/agent if accompanied. The viewing should last no longer that 15/20 minutes. It is perfectly normal to be friendly with the vendor but it is advisable, if you are interested in the property, to keep any conversation about offers for when you speak to the Agent. The agent should contact you within 24 hours of you viewing the property for feedback, this will happen regardless of whether you are interested in the property. A good estate agent will want to provide their vendor with information provided by you. Don’t worry if the property is not suitable, be kind but honest with your feedback whether it is room sizes, décor, price etc that turned you off. You may find you need to view a lot of properties before finding the one… or you may view your first property and fall in love.
Making an Offer
So, you have found your dream home, what now! The likelihood is that your Estate Agent has called you for feedback and you are currently getting your thoughts together. It may be that you are sat waiting for them to call, either way, take your time. There are many things to consider when making an offer and one of them is the feelings of the vendor. Some buyers will make an offer and some are lucky in achieving a slightly lower price than the property is currently marketed at, however, some properties are priced very keenly so the vendor will not be in a position to negotiate or may not need to due to the demand they have. Silly offers can be insulting and waste the time of the agent and the vendor which leaves you in a difficult position to negotiate. Make sure you speak to the Agent; they know their vendors wishes and will guide you on the likelihood of there being room for negotiation.
Information you will need to provide before an offer can be accepted STC:
- The Estate Agent has a legal obligation to check your ID and proof of address so be prepared to supply this information.
- They will also need to know your ability to proceed to purchase the property so will need information on how you plan to fund the purchase eg. MIP, AIP and evidence of deposit.
- Your timescale and position. Being a First-time buyer means you have no chain so your purchase will not depend on the sale of another property.
- Solicitor/Conveyancer you plan to use to purchase the property.
Your Offer has been Accepted Subject to Contract
Congratulations! You have found your property, but you still have some way to go before you are handed the keys to your dream home.
Acceptable Subject to Contract is a very important aspect of house buying in England. Although most vendors and estate agents are happy to remove the property from the market at this stage, there is no legal contract between you and the vendor until you have exchanged contracts. Exchange of contracts takes place towards the end of the sales process and there are a number of legal checks, searches and surveys to be conducted before your solicitor and your mortgage lender will allow you to complete your purchase.
What to expect next
- The estate agent will send a Memorandum of Sale to both you and your solicitor and the vendor and their solicitor. This is a document which provides all parties names and address, the property to be purchased address, the agreed purchase price and whether the property is freehold or leasehold.
- If you are applying for a mortgage, you will need to contact your mortgage advisor who will need to see you to complete the application for a Mortgage. The advisor is likely to advise you on the most suitable mortgage deal at that time based on your requirements. There are various options including fixed rate, variable, discounted etc. The cost of each can be very different and will need a full explanation from your advisor. You may be expected to pay some fees at this point for example, survey fee and mortgage arrangement fees, both of which should have been provided to you in your preparation stage.
- You will receive a document confirming Solicitors’ instruction from your solicitor. This paper work will ask questions about yourself and your planned purchase. You need to complete and return this information as soon as possible along with any search fees the solicitor has requested.
- The surveyor will contact the estate agent to arrange access to the property – they will carry out a Mortgage Valuation on the property which is for the purpose of the lender, however, you should be informed of the outcome. If you want a more detailed Homebuyers Survey, you will need to arrange this as soon as you can. Your mortgage advisor, solicitor or estate agent should be able to recommend or provide you with contact details for a local surveyor if you need this help.
- Once your solicitor has received confirmation of instruction from you, they will receive a Contract from the sellers solicitor giving details about the transfer of the property. Once received, your solicitor will request searches and raise any enquiries with the vendors solicitor regarding the contract. The vendors solicitor will liaise with their client to answer the enquiries and make further investigations if needed. This process can take some time depending on what enquiries have been raised by your solicitor. Remember, your solicitor has a legal responsibility for the advice they give you regarding the purchase so there are some questions that need to be satisfactorily answered before your solicitor will commit you to purchase the property.
- Once the mortgage valuation report is complete and the lender has carried out all necessary checks on your income and outgoings, if satisfied, they will offer you your Mortgage. Your solicitor will be provided with the details so they know you are able to purchase the property before you exchange contracts. Mortgage offers normally last for 6 months but it is always best to check this with your mortgage advisor.
- If you have instructed a surveyor to carry out a HomeBuyers report, you will have the opportunity to discuss any aspects of concern with the estate agent. If further negotiation is necessary, this will be dealt with by the estate agent and any new confirmed price, if a reduction is agreed, will be sent out to all relevant parties with a new Memorandum of Sale. Sales can fall through at this stage if agreements cannot be found, luckily this is not common practice but worth remembering.
The estate agent will be in contact with all parties throughout the whole process from offer to completion. They will be there to help you understand the process, what is maybe holding up the sale and can work dynamically between all involved to resolve any possible issue or to help reduce the time is takes to reach a completion.
Exchange of Contracts
Once your solicitor has received the results from the searches and all enquiries have been dealt with satisfactorily, your solicitor will discuss dates with you for exchange of contracts and completion.
Dates will be put to the vendors solicitor and a date will be agreed, again, the Estate Agents role is to ensure both parties reach a date which is agreeable. This is normally the time to organise removals.
‘Exchange of Contracts’ is a process where both the buyer and seller sign the same contract to transfer ownership of the property and exchange contracts. A completion date is set at this stage. Completion can happen on the same day as exchange or a longer timescale can be agreed on (normally the case with new build properties).
Yes! You made it ? your solicitor will contact you on the day of completion to confirm completion has taken place. The estate agent will be advised by the vendors solicitor when completion has taken place and gives them permission to release any keys held for the property to the new owner. The estate agent will contact you to confirm the keys can be pick up.
We hope you find this information helpful and reassures you that 3Keys Property will be with you every step of the way. If you have any questions about this simple guide for first time buyers, please contact our office. 3Keys property are able to recommend a number of solicitors/conveyancers, surveyor and a mortgage advisor should you need this support.
Happy house hunting!
Download our simplified First Time Buyers Step by Step Guide to buying a home.