Purchasing your first home, or any home at any stage for that matter, can be a pretty scary and stressful time; but if you do it properly it needn't be neither! Here's my step by step guide to buying your first home!
Step 1 - See a Financial Adviser
Do not skip this step!! You have no idea just how important this first step is. I am an estate agent. I sell new build homes for a living. I speak to many first time buyers every. single. day. I cannot even begin to tell you how many people come to me after a few weeks of searching and ask me for the contact details of that financial adviser again, because they didn't listen to me the first time.
Before you even begin looking around show homes or flicking through glossy brochures, go and see an independent financial adviser for mortgage advice. Ask family and friends if they know anyone specifically or find a local estate agency that offers this service. An initial chat should be free and believe me when I say the advice will be invaluable!
Why is this such an important step? Because without knowing how much you can realistically afford your search for a new home - new or old - is futile. Sure, you can run a quick search online from the comfort of your sofa or you could head straight to your bank, the bank you've banked with since you began using a bank. The bank you've banked with since forever are not loyal to you. They aren't. Their deal is not the best deal. It isn't. And what harm can a free appointment with an independent adviser do? Go in and see the fella (or lady) and ask them to give you a rough idea of the best mortgage deal they can get you.
To put this into perspective for you. Tom and I did a search online ourselves to find a mortgage. The cheapest we found was a little over £420 per month with Natwest. We went to see an adviser at work and with his knowledge and tricks of the trade he managed to find us a mortgage for just £387 per month with Nationwide with £200 cashback on completion! WINNER!
You can't expect someone to potentially save you hundreds of pounds and for the service to be free - there will be a charge for the service if you take out the mortgage they find for you, but trust me the deal will not be any cheaper if you go to the bank direct and the charge is minuscule in comparison to the saving you've achieved!
Another big reason to see the adviser - they can tell you how much you can realistically afford. You're forgiven for not realising how much it costs to be a home owner - don't get to thinking all you have to pay for is the mortgage, gas, water, electricity and food. Oh no there's much more than that! The adviser can talk you through the extra things you need to consider and budget for. He'll make sure you have enough left over each month to live on and save. He'll help you come to a budget range that you should be looking in.
My colleague did the maths and said we could afford to buy a home up to the value of £200,000 but we wouldn't have much money left over to live on or save for the future. He said to realistically look at a maximum of £170,000. To be even more comfortable we decided to look in the region of £150,000 and we're super pleased we did.
Financial adviser. Trust me. Book that appointment!
Step 2 - Location, location, location
First time buyers often look further afield for their first homes. It could be a case of affordability and a lack of dependents to think about schools for - so consider looking outside your initial search area. Tom and I spent several weekends driving around the areas close to where we worked and currently lived and the out-skirting areas. It's okay to say you want to be within a certain number of miles to a place of work, but you will become used to a slightly longer commute if necessary and what's to say you will remain at your current workplace forever?
You will find areas you definitely don't want to live in. You will also find areas you won't mind living in, but only on certain streets. And you will find areas you would pay a million pounds to live in - and you'd really have to. Make a list of certain streets, villages and towns you want to live in as well as areas you don't want to live in - this will help when you come to searching for homes to look at.
Step 3 - Decide on your needs
This is a very important step and will take a level of discussion if you're buying with someone else. It's also worth discussing this with family members. If you don't have children, purchasing your first home is going to be very easy. There is no need for you to purchase a big 4 bed detached property with enough room for two cars plus room for cars for when the kids learn to drive and the family come to visit.
Be realistic with your needs, otherwise you'll end up purchasing a house that's too big, will cost too much to maintain and your weekends will be spent doing house work!
Make a list of what you'd ideally like in a home, what you're willing to compromise on, what would be a bonus but isn't essential and also what you definitely don't want.
Tom and I initially started looking for a 3 bedroom property with a good sized kitchen diner with plenty of space for entertaining. Off street parking for 2 cars at least was essential, a garage was preferable and we wanted a good sized back garden, again for entertaining. An en-suite to the master was a bonus but not essential. We didn't want anything more than 3 bedrooms. Again, our ideal budget was £150,000 but we could stretch to £170,000 for the right property.
In the end we bought a 2 bed end terrace, no en-suite to the master. The kitchen is tiny but it's plenty big enough for the two of us. We have no garage but we do have 2 off street car parking spaces and there are communal spaces directly opposite for guests should we need them. Our back garden is small but ample for the two of us and guests. Our home cost us £155,000. It's perfect.
Step 4 - Book some viewings/visit some show homes
Now for the fun bit! The bit you've been waiting for!
No doubt you've already had a peek online and you've got some properties lined up already. Now you know you can afford one and they're in the areas you like - it's time to go and view them! View as many houses as you can, but don't view them for the sake of it. The idea is to be realistic and don't waste your time and the sellers time.
If you're looking at new build properties - view as many show homes as possible. Unfortunately not all developments will have a show home of the exact house type you're looking at, bonus if they do, but if they don't just ask if they have any that are almost built or finished? Sometimes the sales rep will let you look inside one that's almost finished. You may have to use your imagination but you'll get an idea of size. Don't forget - new build homes always look smaller without carpets and paint on the walls!
Step 5 - Make an offer
Once you've found the right house - and trust me, you'll know - put an offer on it! If it's a second hand home you'll need to go through the agent and there may be some negotiation involved.
If you're looking to purchase a new build - put an offer in on that one as well! Offers on new builds are often unheard of as many buyers think the price is fixed. The likelihood of having an offer lower than asking price accepted is unlikely, but the builder may throw in some upgrades or extras for you - like carpets or turf if they aren't already included.
As an estate agent working in new builds I already new we were paying above premium for our property. Our home didn't come with an integrated washer dryer, carpets or turf as standard. The builder wouldn't accept a lower offer on the property but he threw in all the extras we could've asked for. We didn't just get carpets - we got the upgraded carpets, the really fluffy stuff. That would do nicely. Yes, we're a smidgen concerned for resale value - but that's not something we plan to concern ourselves with too much for another 4+ years yet and who knows, the economy could sky rocket or it could go to shit and take house prices with it. Be realistic, don't pay stupid money if your gut is telling you it's the wrong decision and don't be afraid to walk away. Chances are the seller/builder will come back if they want your business, or you've dodged a bullet and something much better is waiting for you.
Step 6 - Choose good solicitors
If you are buying a new build, the builder will likely want you to use the recommended solicitor and they may even use it as an incentive. The builder paid our stamp duty if we used their recommended solicitor. We were first time buyers and the choice of solicitor didn't really matter to us - in fact it likely saved us some effort. Plus, I deal with solicitors every single day so I knew enough about the process already to keep the solicitor working hard for us.
If your offer is accepted through an estate agent consider using their recommended solicitor also - ask if they don't offer an option. Chances are the agent will earn a slither of commission from it but the bonus will be that the agent will be used to dealing with that specific solicitor every day and communication is key when a property purchase is going through the legal stage.
I hope this step by step guide has helped somewhat.
If you've got any tips of your own - or even a question to ask - leave a comment below!