Ten tips for a first time buyer

1. Know the difference between Searches, a Mortgage Valuation and a Homebuyers survey –

Early on in the conveyancing process, your conveyancer will ask you to make an initial payment on account to cover the cost of searches against the property you intend to purchase. These will cover environmental matters, water and drainage and a search of the local authority records for entries relevant to the property. As part of your mortgage application process your lender will also conduct a valuation of the property, a report on which you should receive with your mortgage offer. To produce this report the valuer will however have only attended the property very briefly, or may perhaps have only conducted a ‘drive-by’ valuation. It is therefore advisable to commission a full survey of the property separate from the above reports, for a detailed assessment of the property’s condition. Your estate agent should be able to assist with booking a survey for the property.

2. The process will take time –

Chances are that after having your offer accepted for a property, you will be keen to get the key for the house as soon as possible. It is therefore likely to be frustrating to learn the conveyancing process may take three months to complete – or longer in some cases.

3. Arrange Buildings Insurance –

It is vital to have buildings insurance in place by the point of exchange of contracts, so look early on at the policy that suits you best. This may be offered by your mortgage lender, or alternatively you may wish to look at comparison websites. Remember – you will need to be insuring the property from the date of exchange, not completion!

4. Don’t make yourself homeless –

Prior to purchasing your first home, you may well be living in rented accommodation. The temptation will be to hand your notice in early to your landlord, to avoid having to pay your first mortgage payment after completion as well as rent. Be aware however that the date for you to move into your new house can only be set when contracts exchange, and therefore handing in your notice to prior to this date can be very risky, Always make sure you have a contingency plan in case the date for completion of your house purchase slips beyond the date you need to vacate your rental property.

5. Organise your source of funds as soon as possible –

Prior to you being able to transfer your deposit and exchange contracts, you will need to supply your conveyancer with documentary evidence as to how you are funding the purchase of the property. This will include the need to disclose any third party contributions, such as gifted deposits. It is advisable to provide this information as early as possible during the process so as to not delay matters closer to the date of exchange.

6. Re-inspect prior to exchange of contracts –

The principle of ‘caveat emptor’, or buyer beware, applies to property transactions. The obligation is on the buyer to ascertain as much information about the property prior to exchange of contracts, and the buyer then takes the property in its current condition at the point of exchange. It is therefore vital that you are fully satisfied regarding the property’s condition prior to exchange. Chances are by the point of exchange your first viewing of the property will have been a number of weeks ago, and therefore it is advisable to re-view before exchange to identify any potential issues.

7. Know the difference between exchange and completion – and the significance of both –

Exchange of contracts creates a legal obligation between you and the seller for you to purchase the property on an agreed date. You will need to have signed your contract and lodged your deposit with your conveyancer before exchange of contracts can take place. In only rare circumstances will this also be the date that you receive the key for the house, which will be the date for completion. Completion typically follows around a week after exchange of contracts, however it can be longer depending on the intentions of the parties in the chain.

8. Stamp duty –

Do you need to pay? If you are purchasing the property for less than £300,000.00 and neither you nor anybody purchasing the property with you have owned a property previously, you will be eligible for a stamp duty exemption. Special rates also apply if you are purchasing a property exceeding a price of £300,00.00.

9. Protecting your deposit –

If you are purchasing the property jointly but are making unequal financial contributions towards the purchase price, you may wish to consider protection your contribution by way of a declaration of Trust. Our expert private client department can advise you on the appropriate steps to take to match your requirements.

10. Ask questions! –

The process can be confusing and at times overwhelming. Our conveyancing team will be on hand to answer any questions you may have.

For more information about our Conveyancing Solicitors visit our Conveyancing page.

If you would like any further advice in relation to purchasing your first home, contact our expert Residential Property team on 01908 660966 / 01604 828282.