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Buying Your First Home​: Top 5 Tips

Updated: Aug 17, 2019

Introduction 

CMC Property Investors Ltd. primarily provides contemporary serviced accommodation throughout the UK. However, this is not our only goal. At CMC, we thrive to provide valuable and accessible property based knowledge to ensure your buying, selling and investing experience is both effortless and practicable. We begin this series with a brief overview of buying your first home, outlining our top 5 tips on getting into the property market.




Buying your first home is nothing short of an achievement deserving accolades. But oftentimes the thought of stepping onto the property ladder can seem incredibly daunting. Why? The overwhelming sense of dread that’s all too familiar can only be the result of a lack of information. We believe that buying your first home should be a straightforward and enjoyable experience, therefore we are making it our mission to educate, inform, and assure you on all things property to make that happen. From budgeting to chartered surveyors, we are here to provide you with valuable and applicable knowledge to make your buying experience as stress-free as possible. To do this, we have devised some top tips that we believe are essential for all first-time buyers. This is by no means an exhaustive guide, however, each of our subsequent posts will fully delve into the world of property, explaining the ins and outs of buying, selling, investing and more.




1. The power is in YOUR hands.

We would first like to note that as the buyer, the power is very much in your hands. We advise that you unapologetically use this power to your advantage. Asking prices are not set in stone, and by nature, they are open to negotiation. Do not be afraid to do so. However, as you expect the seller to be willing to budge, you too must be willing to meet them in the middle. You’ll be pleased to know that being a first-time buyer is advantageous because you are not tied up in a chain. This means that the buying process will run more smoothly. However, in order to show the seller you are serious about your purchase and are able to afford it, it is within your best interest to have a mortgage in principle ready when making your offer. Additional factors that increase your bargaining power as a buyer include: 


Length of time the property has been on the market

  • As time goes on, sellers will be more willing to reduce their asking price, sometimes considerably.


Seller’s eagerness to move 

  • Get to know your seller if possible, if they want to move as quickly as possible, they are more likely to accept a figure below the asking price.


Issues outlined by the Chartered Surveyor

  • These may increase a seller’s willingness to negotiate on asking price. 


When negotiating, do not worry about insulting the seller with an asking price you believe is too low, however, do not pull arbitrary figures from thin air. Instead, research market prices of similar properties in the area and tailor your offer accordingly, you must also be able to justify your offering price. It may be worth asking the estate agent how they decided on asking price, a good estate agent will substantiate the asking price, which allows you to make a reasonable offer. It may be that the agent will tell you that they think the seller is overvaluing the property, in which case negotiating is very possible. You should definitely anticipate the seller returning to you with a price better suited to them, an open dialogue will surely lead to a price you’re both comfortable with. A word of advice we have picked up is ‘If you aren’t embarrassed by the price you offer it isn’t low enough’ however, we still suggest being cautious when bartering. Offering a very low price, even if it is accepted may lead to ‘Gazumping’. This is when the seller cancels the sale, opting for a higher offer from an alternative buyer. This can occur well into the buying process, thus highlighting the importance of building a rapport with your seller. Having a stable relationship with the seller throughout the sale will reduce the chances of gazumping.

"If you aren’t embarrassed by the price you offer it isn’t low enough"


2. Make a budget and stick to it.

The first step to making the buying experience as pain-free as possible is to make a realistic budget and stick to it. Now there’s good news and bad news. The good news is that as of November 2017, first-time buyers are not required to pay Stamp Duty on properties below £300,000, resulting in a saving of up to £5,000. However, for properties up to £500,000, the first £300,000 will be Stamp Duty free, although stamp duty will be charged on the remaining £200,000. On properties upwards of £500,000, standard Stamp Duty charges will be applied. The bad news is that there is much more than just a deposit to budget for, however, knowing of such costs and being prepared for them will help you in the long run. The main things you should consider saving for besides your deposit are Conveyancing and Chartered Surveyor fees. 

Additional costs to budget for include: 

  • Mortgage arrangement fees 

  • Mortgage booking fee

  • Valuation fees (these may be included in the mortgage)

  • Conveyancing disbursements

  • Searches (extra to conveyancing fees)

  • Electronic transfer fee (from the mortgage lender to the solicitor)

  • Buildings insurance (required from the exchange of contracts)

  • Contents insurance 

  • Storage and packing fees (if required)

Also, don’t forget to budget for post moving costs; mortgage payments, utilities, council tax, broadband, furniture, etc.


Conveyancing - Conveyancing is the legal process in which ownership of a property is transferred. A licensed conveyancer or conveyancing solicitor will complete the paperwork required to buy the property and will manage the transfer of funds via a secure account. Conveyancing begins after you have made an offer on a property and it has been accepted.

Chartered Surveyor - A Chartered Surveyor is required after the offer has been agreed. The Chartered Surveyor will assess the condition of the property you would like to buy, ensuring it is worth the price you are paying. The Surveyor will highlight any red flags and give you an estimate of costs for the work needed.


*NB: This is a very brief overview, we will come back to buying costs in more detail in a later post.*


3. SAVE SAVE SAVE! And keep saving!

It’s no surprise based on all of these costs that the more you save, the smoother your buying experience will be. The most important thing to remember when saving is to save for all of the additional costs associated with buying your first property as well as your deposit. There is absolutely no such thing as too much saving. In fact, we advise always saving slightly above the most you are willing to spend. There is no doubt that there will be some surprise costs that will sneak up on you along the way so it’s better to be prepared for them from the start.


4. Be flexible with location and amenities 

Choosing the property seems like the easy part, right? Unfortunately probably not, however searching and viewing will be the most fun part of the buying process. Keep in mind that your first property is unlikely to be your dream property in your dream location, which means compromise is key. Realistically, the chances of finding a property with everything you desire in your ideal location and within your budget are low but this doesn’t mean you won’t find an amazing first home. To do so, start by making a list of all of the factors that matter to you, split the factors into the ones you’re willing to compromise on and the ones you must have without question. Also, consider how long you’re planning on living in the home, whether you would like to start a family in this home, what the home needs immediately and what it may require in the future. All of these aspects may alter your fixed factors and flexible factors list.

Factors to consider in terms of location:

  • Do you know the area?

  • Is the area safe?

  • Are the other properties in this area within your budget?

  • Are you able to travel to work?

Factors to consider in terms of amenities:

  • What is in the surrounding area?

  • Is there access to public transport?

  • Are there supermarkets in the area?

  • If you are looking for a family home, is it within a good school district?

  • Is there access to a doctors surgery, hospital and dentist?

You must also consider any extras such as what you really want from your home; parking, a garage, a garden, storage space, broadband speeds and mobile phone coverage in the area. Deciding which factors you are willing to compromise on will surely make your buying experience easier. A property that accommodates all of your non-negotiable factors is a good start.



5. You can never ask too many questions 

Finally, it is imperative that you ask questions. Begin by talking to people who have been through the buying process, there is no doubt that they will tell you to ask questions you had not considered important. Ask the estate agent questions:

  • Exactly what is included in the sale?

  • Which direction does the property face?

  • Is the property listed? If so, what grade is it? And is it in a conservation area?

  • How long has the property been on the market? 

  • How many people are viewing the property this week? 

  • How many offers has the property had? 

  • How many of the offers have been rejected? 

As previously mentioned, knowing the answers to these questions may allow you to increase your bargaining power when it comes to negotiating the asking price. 


As well as asking the estate agent questions, it is important to ask the owners questions. It may be useful to find out about the sellers themselves. For example, you may ask:

  • Why they are moving? 

  • When they are looking to move? 

And about the property and the area -

  •  Is there a possibility for extension/renovation? 

  • What do they like the most about the property and the area? 

  • What do they not like about the property/area? 

  • What are the neighbours like? 


*NB - pay close attention to the way these questions are answered. Sellers may not give the full picture to make a sale quickly.*


Carefully consider all of the answers to these questions. Are you satisfied? if not, then this is probably not the home for you, it's okay to keep looking.





Summary 

To summarise, buying your first home can be very stressful, however, we firmly believe that by employing these five tips, your buying experience will be much more manageable. Being flexible with location and amenities alongside realistic budgeting, saving and getting all of the available information will have you on the property ladder in no time.


#PROPERTY #FIRSTTIMEBUYER #HELPTOBUY #MORTGAGE #ESTATEAGENT #PROPERRTYINVESTORS #FIRSTHOME


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