Our Guide To Buying Your First Home

First and foremost, congratulations! The housing market is now on a roller coaster, yet you’re eager to take the jump and buy a home. Maybe you’re ready to move into another hometown, or maybe you’re looking for a house after renting for a while, whatever your reason for buying is, one thing is for sure, it’s an exciting time.

It’s possible that the thought of owning a home appeals to you. It’s not difficult to do with the right amount of research. However, you’ll need to understand what goes into finding a new house in order to select what you should look for. How many bedrooms and bathrooms, for example, should it have? What kind of doors and windows do you think it should have? When looking for a new home, what responsibility does an estate agent have? If you know what to look for, you can find the answers to all of these questions.

Before you start looking at homes and filling out applications, let’s sit down and talk about what it takes to buy your first home.

Make a Checklist of Priorities

Making a checklist of priorities is a necessity.

You must consider both your ‘must haves’ and your ‘wants’ when deciding what to include first on your checklist. Your must haves may include items like a master bathroom or an open plan living room. A terrace or an updated kitchen may be on your list. It’s also important to be aware of how much more you’ll have to pay for each want. For instance, if you compare two homes in the same price range, one with an updated kitchen and the other without, the home without the updated kitchen is likely to be less expensive since it needs renovations.

Consider what makes a house seem like home to you, as well as what does not. If you’re moving in with your partner, make a list together so you both know what you want in the new place.

Homes have a variety of features, so it’s important to figure out which ones are most important to you before you start looking at houses in person.

Determine How Much House You Can Afford

The second step is to figure out how much house you can afford comfortably. It’s important to note that this isn’t necessarily how much house you “need” or “want,” but rather how much house you can afford without sacrificing your budget or lifestyle.

Based on your income and needs, you need to figure out how much house you can afford. That way, you won’t be stuck with a house that will cost you money in the future.

There are several factors to consider when determining the amount of money you can afford to spend on a house:

• Your household income: After paying for monthly expenses and emergencies, you want to make sure you have enough money left over.
• Your credit score: The higher your credit score, the more likely you are to qualify for favourable mortgage rates.
• Existing debt obligations: Car payments, student loans, and credit card bills can affect the amount of money you have available each month for housing costs such as mortgage payments, homeowners insurance, and property taxes, as well as utility bills, upkeep, and repairs.

Once you’ve set a budget, try to stay within it, even if it means looking at smaller homes and making a smaller monthly mortgage payment, there are still plenty of ways to expand later. Check the cost of your purchase with this free calculator for property to understand the more complex costs of buying.

Get an Agreement in Principle

An agreement in principle, also known as a ‘decision in principle,’ a ‘mortgage promise’, or a ‘mortgage in principle’, is a certificate or statement issued by a lender stating that they will lend you a particular amount ‘in principle’. When you apply for an AIP, the lender will look at your credit file to see if you’re eligible for a loan and if they’re willing to offer the amount you need.

You can approach a mortgage lender directly or through a mortgage broker to acquire an agreement in principle. To get an agreement in principle, you won’t have to go through the entire application process. This will happen once you’ve had a property offer approved.

Having a principle decision shows that you can theoretically afford to buy a home. This may help you stand out as a more attractive buyer. The size of your agreement in principle can assist you figure out how much you can borrow. This can be used to find a home within your budget.

Search For A Property

The first thing you’ll need to decide while searching for a property is which location or areas you want to look in.

It costs a lot of money to buy a house, and you’ll only get your stamp duty discount or exemption once if you’re a first-time buyer, so buy somewhere you can see yourself living for a few years.

This means that you should consider both your current and future needs. Are you planning to start a family or start commuting to a different workplace? These kinds of questions may impact the type and location of property you choose.

It’s time to start looking for a home once you’ve decided on a location.

Most people begin their search on websites like Rightmove, Zoopla, and OnTheMarket, which show properties for sale by estate agents and developers who advertise on these sites. Rightmove is a great place to start because it usually provides the most comprehensive listings.

You can limit your search to only properties that fit your budget and have a certain number of bedrooms. You can also create alerts on the property websites to be notified when a listing that meets your criteria becomes available.

Photos, floorplans, descriptions, and key statistics such as nearby schools are generally included in online listings. They can also give you an idea of the types of houses that are available in your budget range. However, it’s important to get out and view properties in person, as they can often be really different in person.

People mostly use estate agents to sell their houses, which means you’ll need to register with them in order to go on viewings. Register your interest with estate agents in your desired areas when you begin your property search. This will not cost you anything or obligate you in any way; it simply shows agents that you are looking. Visit the estate agents’ offices and register in person if possible.

Before listing new properties online, estate agents often call registered buyers. In a thriving market, the best properties might sell before they ever appear on websites like Rightmove. This means it’s important to stay in touch with agents on a regular basis so you’re top of mind when new listings come on the market.

View Properties In Person

It’s time to start viewing properties! You may look for open homes on your own, online or through estate agents such as Highcastle Estates, but estate agents can also advise you about any upcoming houses in the area.

When you’re ready to start looking at houses, the most important thing you can do is to go to as many open houses as possible. This can give you an idea of the market value of houses in your desired area, as well as what physical features are standard in that price range. Keep track of any things you desire but don’t think you’ll be able to afford so that when a house comes up that fits your budget and includes those features, you’ll know which home it is.

There has recently been a hype about virtual viewings and whether they will become normal. Although a live or pre-recorded tour can be a great way to shortlist the properties you are interested in buying, nothing beats a personal visit to iron out any potential issues. Here’s a list of things to look out for when you are buying and viewing a property:

1. Drive around the area of the house. First impressions are really important. You should view the property from the outside even before the viewing. This is often enough to determine whether or not a property is right for you. You may also get a good feel of the neighbourhood by driving around nearby streets. To analyse things like traffic noise, do this both during the day and at night.
2. Be prepared. Before the house viewing, make a list of everything that is important to you and any questions you have. It’s easy to forget about things once you’re inside the house. We’ve outlined some of the things you should consider when viewing a house:

• Is the flooring in good condition?
• Are there any signs of damp/mould/condensation? Even if you can’t see any, can you smell it?
• Are there any exposed wires?
• Are you very overlooked by neighbouring properties?
• Do the windows and doors open and close easily?
• How strong is the water pressure in the shower?
• How long does it take for hot water to come through?
• What state are the drains and gutters in – are they clean, new, moving the water correctly if it’s raining?
• Is there a garage, off-road or on-road parking? If on-road, will you need a permit?
• Is there much scope for extending/renovating/adding value?
• Bring backup. Never attend a viewing alone. Attend the viewing with your partner because having someone to bounce ideas off of and ask for a second view is always beneficial.

3. Look for any dampness. The musty smell, mildew on the walls, peeling wallpaper, blistering paint, dark patches, discoloration, and mould are all signs of dampness. It is caused by moist air condensing on the walls and is a sign of the building’s structure and ventilation. Damp can cause health problems, woodworm infestations, and fungal decay, and it’s hard to eliminate.

4. Go for a second viewing. Buying a home is a huge investment, and you should avoid handing over your savings if you’ve only seen it once. But how many times should you visit a house before making a decision? This depends on a number of factors, including the property type. If it requires extensive work, for example, you should get a quote before agreeing to buy. When you visit the house on a quiet weekday morning when the sun is shining, it may look different than when you visit on a busy Saturday morning in the middle of the winter. You may want to see the property at different times of the day to get an idea of the neighbourhood.

5. Keep your emotions under control. It’s not always simple, but try to think of the house as a building that needs to be inspected. Don’t get too connected too soon, because your heart will take over and you will overlook any issues.

6. Speak with the estate agent. If the house you’re viewing is a strong contender, speak with the estate agent to learn more about it and why it’s being sold. Unlike the seller, the estate agent is legally obliged to inform you if the home has any major flaws. You can also inquire about how long the property has been on the market and whether or not an offer has been made.

Make an Offer

Making an offer on a home is an exciting process. You’re not only eager to strike a deal, but you’re also concerned about making the wrong decision. Making an offer may be stressful, especially if you’re buying in a hot market where homes sell quickly and sellers demand full price or more. When you have an idea of how much you would like to offer, this is how to formally put in your offer:

Inform the estate agent. Estate agents are required by law to forward every offer they receive to the seller.

Put your offer in writing. A phone call followed by an email will work to avoid any confusion or disagreement later.

Make your position clear. Sellers who want to avoid long chains and possible delays choose first-time buyers. Cash buyers have the advantage of being able to move quickly. It will also help your case if you come across as organised and eager to move.

Prepare yourself for negotiations. Negotiations are performed through the estate agent if the seller is interested in your offer. Buyers are at a considerable disadvantage because the seller has a professional negotiator working on their behalf, whereas the buyer is on their own.

Protect your purchase. Request that the property be taken off from the market if your offer is accepted. Agree on a written list of which fixtures and fittings will be included with the agent. Having it in writing at the start of the process reduces the likelihood of later conflicts and delays.

Arrange A Mortgage

Before making an offer, you should have as much of your finances in order as possible. If that’s the case, all you have to do now is go back to your mortgage company with the agreed offer and finish the process. Here’s a step-by-step guide to mortgage applications:

• Step 1: Find a mortgage. A mortgage broker can help you to make these decisions. A good broker can advise you on which providers are most likely to accept your application and which products will best suit your requirements. Ask your broker to calculate the overall cost of your mortgage, including all fees and charges, as well as any conditional fees and charges, such as early repayment fees.
• Step 2: Prepare your mortgage application documents. To apply for a mortgage, you’ll need to give the following: Proof of ID, details of your employment and up to six months of bank statements. Only certain documents will be accepted, and originals rather than scanned or printed copies are usually required, the exception to this is bank statements, printouts or PDFs of online statements are generally accepted.
• Step 3: Consider getting a mortgage decision in principle. You might want to get a decision in principle, also known as an agreement in principle or AIP, if you’ve found a mortgage deal that meets your needs. It involves a lender agreeing to provide you a mortgage ‘in principle,’ subject to final checks and approval of the property you want to buy. A credit check is normally required to obtain a decision in principle, so we recommend doing this when formally applying for a mortgage or if an estate agent asks one to check you’re a credible buyer. If you’re having trouble with the latter, try to get a decision in principle from a lender who does a soft credit check, as it’s better to keep the number of hard credit checks to a minimum. This is something your broker can help you with.
• Step 4: Make a formal mortgage application. You should formally apply for a mortgage after your offer on a property has been accepted. If you use a mortgage broker, they will take care of this. The property you want to buy will be conducted by the mortgage lender. This reassures them that the property is worth roughly the amount you intend to pay. The lender will also go over the papers you’ve submitted as well as your credit history record. This search will be appeared in your credit file. If a lender rejects you at this point, it’s worth trying to find out why and possibly waiting a while before trying again. Making many mortgage applications in a short period of time will hurt your credit score.
• Step 5: Wait for your formal mortgage offer. If your application is approved, the lender will issue you a formal mortgage offer. Remortgage offers are usually valid for three months, whereas mortgage offers are usually good valid for six months but this varies between lenders.

You should receive your mortgage offer within four weeks of submitting your application. Your conveyancer will arrange for the mortgage funds to be transferred from your mortgage lender to the person you are buying the property from on the day of completion after you have a formal mortgage offer.

Before you can exchange contracts, you must first obtain a formal mortgage offer from the lender. Your lender will conduct its own thorough research on the property to ensure that it is comfortable lending you the money secured by your new home. It may determine that you are overpaying and require you to put down a larger deposit or renegotiate the price with the seller.

Instruct A Solicitor or Conveyancer

Once you have agreed an offer on your house, you’ll need to hire a solicitor or conveyancer to perform the legal procedure of transferring title to you. Your mortgage company may compel you to use one from their panel, in which case they will make the decision for you. Your estate agent will also make a recommendation. You can hire a conveyancer who may or may not be a qualified solicitor but will definitely specialise in property or a solicitor whose recent experience in property law should be checked.

Conveyancing includes:

• Conducting searches
• Drawing up and checking contracts
• Dealing with Land Registry
• Liasing with the seller’s conveyancer, their estate agent and your mortgage lender
• Checking the documents provided by the seller, including the lease if you’re purchasing a leasehold property
• Transferring money from you to the seller

Here’s the step by step process of conveyancing:

• Step 1: You instruct a solicitor or conveyancer to work on your behalf – ideally before step 2, although you can also hire a solicitor after making an offer if you haven’t already done so.
• Step 2: You make a property offer which the seller accepts.
• Step 3: Your conveyancer or solicitor conducts all relevant searches on the property and requests a draft contract and other selling documents to the seller’s solicitor.

Decide If You Want A Survey

A surveyor’s valuation will be required by your mortgage lender to ensure that the property is good enough to lend against. This is not a proper survey, and it will just look at the property superficially. You commission your own survey to assess the property’s condition and warn you of any potential issues you may encounter once you move in. It is usually recommended getting a survey done unless you have a lot of knowledge with property.

There are several different types of house surveys. What you choose depends on the depth of survey you want, your budget, and the age and condition of the property.

It’s worth noting that the Royal Institution of Chartered Surveyors (RICS) announced new home survey report formats in March 2021. As a result, the terms Condition Report, HomeBuyer Report, and Building Survey have all been updated.

Here are the different types of survey in 2022:

Rics Home Survey – Level 1

This is the most basic survey. It utilises traffic light ratings to give an overview of the property’s condition and to identify significant issues, but it does not go into detail. A Level 1 survey is appropriate if you’re looking to buy a standard, modern property in good condition and want to ensure that everything appears to be in good condition.

Rics Home Survey – Level 2/RPSA Home Condition Survey

For most houses in reasonable condition, a mid-level survey is the best option. This level of survey will cover everything that was covered above, plus a few extras.

It will point out any problems that may have an effect on the property’s value, as well as the surveyor’s advice for repairs and ongoing maintenance. It should also indicate problems like damp and subsidence, as well as anything that doesn’t comply with current building regulations.

The surveyor will not look under furniture or under floorboards during the inspection, so they will only be able to identify ‘surface-level’ issues.

Rics Home Survey – Level 3/RPSA Building Survey

This is the most thorough type of survey. It gives a comprehensive analysis of the structure and condition of the property. If you’re buying a property that’s over 50 years old, has an unusual design, or is in poor condition, a Level 3 survey is a good option.

It’s especially worth it if you’re planning major renovations or have major concerns about a property. The surveyor will be ‘hands on,’ checking the attic and looking under the floors. The report will detail any flaws and provide recommendations for repairs and maintenance. You can also request that the surveyor include projected costs and timelines for any proposed repairs in the report.

Exchange Contracts

Contracts should only be exchanged after all i’s and t’s have been crossed. Remember that this process makes the agreement legally binding, so double-check everything before moving further.

Before the contract exchange, your conveyancing solicitor should make sure you’ve covered every eventuality before the contract exchange takes place, but some essentials include:

• You have made an offer and it has been agreed
• You have inspected the relevant Law Society forms, such as TA6 and TA10
• Surveys have been carried out
• Valuation has been conducted by your lender
• Searches have been completed by your conveyancer
• The EPC has been checked
• Funding is in place to pay the deposit
• A completion date has agreed upon, this will form part of the contract
• Buildings insurance put in place, you are liable for the property from the moment contracts are exchanged
• You have taken the time to read through the contract, and ask any relevant questions
• Once read and understood, the contract should be signed
• In most cases, contract exchange takes place one to four weeks before the completion date. It is possible to exchange contracts and finalise the transaction on the same day, but this is not for the faint of heart.

Exchanging contracts and finalising them on the same day might lead to plenty of problems, such as having everything packed and ready to move without knowing if the move will actually take place! Some lenders may refuse to agree to it since they require a minimum of five working days between contract exchange and completion.

There’s probably not much left to do once you’ve reached the stage of exchanging contracts. Your solicitors will conduct the contract exchange, which normally takes the form of a recorded phone call during which both legal firms read the contracts out loud to confirm they are identical. After this step is completed, the contracts are sent to the other solicitor to complete the exchange.

Finally! The most difficult part is finally complete. Your completion date is virtually set in stone once contracts are exchanged, and you may begin preparing for your move. You can now start work through a change of address checklist, send your title deeds to your lender, and register a transfer of ownership with the Land Registry.

Close On Your New Home

Completion occurs when you pay for the property and take ownership of it at a specific time of day which is usually mid day. The money and the property deeds are transferred between each side’s conveyancer on the day of completion.

Once all that is done, you’re ready to take possession of your new home. The seller must vacate the home by the completion date, and you should be able to pick up the keys from your estate agent. You are now free to move in, or if you are doing any pre-construction work, the workers can begin. You’ll need to make normal administrative arrangements to obtain parking permits for moving vans and other vehicles.

Congratulations! You’re now a homeowner. Then? Well then it’s time to celebrate. Cue a night of champagne and caviar with friends and family. The choice is yours, now that you own a home.

Conclusion

Hopefully, you were able to take away some useful information from this guide. Remember, the more research you do, the more prepared you will be to buy a home with which you will be truly happy. It’s also important to remember that requesting help is not a show of weakness. Getting guidance from a trusted friend or an estate agent can help you determine which one is a good home for you. Consider using an estate agent like Highcastle Estates if you need assistance with your first home purchase. We are experienced professionals who have seen it all, and we can point you towards some of the best deals out there.

If you have any questions or queries about the housing market, it is best to call on experts for support. We are still available to help you, while following social distancing guidelines, so feel free to contact us if you need to.

We can arrange a free valuation for you, and if this is of interest, please contact Highcastle Estates today. You can call us on 0203 026 4420 or email us on info@hceuk.com if you’re a landlord in Newbury Park, Stratford, Ilford, Goodmayes, Seven Kings, Plaistow, Chadwell Heath, Barking, Forest Gate, East Ham or beyond.