Buying your first home should be an exciting time, full of anticipation and planning, but if you listen to some stories it’s right up there with tales of the Bogeyman. But it doesn’t have to be that way.
Here at YHomes York and Wetherby Estate Agents, we’ve all bought and sold properties ourselves and survived. And then we’ll probably to do it again in five years’ time. But for your first time, it’s all about the unknown, and the best way to ease that problem is to know what is expected of you and what you can do to make this procedure less fraught and more enjoyable. And the main rule for you to remember is that ‘there’s no such thing as a stupid question’, so if you want to know something, ask us.
It might seem a strange thing, but finding your dream property is not the first thing that you need to do. It’s making sure that you can afford it. It might seem like stating the obvious, but making sure that you qualify for a mortgage and have the right amount for your deposit and all of the fees for solicitors, stamp duty, mortgage arrangement and survey fees, most of which need to be paid ‘up front’ are the first things that you need to find out – without that, you can’t get past the first hurdle. Do your research – both on the mortgages and the fees. Unless you know this weekend’s lottery numbers. So, that’s your first step. You need to consult either an independent mortgage advisor or enquire at your bank. By declaring your income (s) and outgoings, a mortgage advisor will offer you the type of mortgage that will suit your pocket and circumstances and then once you’ve been qualified you can start to look for properties. This is not a Mortgage Offer. This is an offer of a mortgage ‘in principle’. It’s basically saying that you have consulted and been qualified for a mortgage and all that you need now is a property to go with it. All estate agents will require proof of funding before accepting an offer on one of their properties. In some areas you can’t even view a property without having proof that you can afford it, so it is a most important step.
Then you need to look for your property. It’s a great time, but look with your head as much as your heart. Research your location choice and use all of the tools available to you but tailor them to your own requirements. It’s no good buying in a picture perfect remote location if no-one drives and you work in town outside of regular bus times, but quite another matter if you work from home and need the peace and quiet. There is no such thing as the wrong location, just the wrong one for you. Then, try to look at the property with a practical eye – if it’s only décor and furnishings that are not to your taste, a trip around the DIY paint section can transform a property. But do check to see if double glazing panels are defective, check the age of the boiler and electrics, things that will cost you a lot to put right. It’s not a case of dismissing properties that need these things, it’s knowing that they need doing so that you can make an informed decision. Differentiate between what needs doing to make it habitable, and what you would choose to do in the fullness of time to put your own stamp on it. And be aware that your lender will be lending you a percentage of the value of the property. If the property needs a lot of work and the mortgage valuer should value the property at a lesser figure than you’ve agreed, the percentage offered to you will be based on the valuer’s figure and you might find yourself with a shortfall in funds.
Once you’ve found your property, you’ll need to place an offer and wait to hear if it is accepted. Once it has been, you’ll need to produce proof of funds to the agent as well as showing them ID and proof of address. You will also need to appoint a solicitor for the conveyancing and show them the same documentation. Your solicitor will send you a letter ‘of engagement’ explaining their charges and what they will do. You will need to read that and if you’re happy with the contents, sign it and send it back to them. They won’t do any work for you until then. As explained in our earlier post about conveyancing, they will require some funds in advance before applying for searches.
At the same time, you need to go back to your mortgage advisor and actually fill in the mortgage application, now that you have an address to go ahead with. You’ll need to pay for your survey and maybe some mortgage arrangement fees. This will set the financial wheels in motion, which will run in conjunction with the legal wheels. Liaise with both your legal and financial representatives as much as you can so that you are kept up to date with progress and there are no last minute surprises. If you decide to have a more involved survey then the surveyor will send you a report. Read it carefully, then read it again. A survey report, especially on an older property that needs work, can make frightening reading on the first read through, but take note of the seriousness of any points raised. Those points labelled as 3 (or Red) relate to ‘defects that are serious and / or need to be repaired, replaced or investigated urgently’. These, of course, are the most important points and depending on what they relate to, may be a good enough reason not to take the purchase any further, or could mean that your lender won’t lend you the money to purchase. Those points labelled 2 (or amber) are relating to ‘defects that need repairing or replacing but are not considered to be either serious or urgent.’ This could relate to things that need redecorating, slight repairs or replacement within the next few years. And those points labelled 1 (or green) are where ‘no repair is currently needed. The property must be maintained in the normal way.’ If there is anything that you don’t understand or needs clarifying, ring the surveyor. Remember, there’s no such thing as a stupid question, just one that you don’t yet know the answer to so ask the experts.
Once the conveyancer has done their bit, and the finances are in place you will be invited to sign contracts. You can have them sent to you in the post or go in to see your conveyancer. Signing the contract is not legally binding, but you’ll need to do it before you can progress any further. You can suggest a completion date and wait to find out if everyone is happy to try for that, or someone else in the chain may suggest a date for you to consider. Try to give yourself a bit of leeway in case the first date is not accepted. Prepare to send your deposit to your conveyancer in readiness for exchange of contracts, which is your first legal commitment. Exchange of contracts cannot take place until your conveyancer has cleared funds for the deposit at their disposal. Long gone are the days of waiting 9 days for a cheque to clear, but the principle is the same. Then your conveyancer will need to ‘request funds’ from your lender in readiness for completion and they usually ask for 5 working days in order to be assured that the funds will arrive in time. By this time, you’re getting towards the end so you’ll need to have an idea of timing in order to organise a removal company, sort things like utilities, telephone, broadband and council tax, take time off work and arrange boarding for the cats and dogs (Cats and dogs hate moving day!). These things are always easier to do if you have an actual date for moving, rather than just a guesstimate. And you only get that on exchange of contracts, so a little gap between exchange and completion is a blessing.
The thing to remember all the way through is that if there is anything that you don’t understand, ask us. If we don’t know, we’ll know someone who does. Not finding out what is expected of you will only cause delay’s. And delays are what causes all of the friction.