Is it easier buying a property as a first-time buyer?
Our family has lived in our little Victorian redbrick for almost three years. As a first time buyer I knew nothing about purchasing a home. Although we were stepping into unfamiliar territory my partner and I as buyers had a lot to offer in terms of flexibility.
As a first-time buyer, you don’t have to worry about selling your home. It is easier when a family can crossover renting with a move in date so there is more time to clean and move furniture. Financially we were in a better position with the option of Help to Buy ISA scheme. A home survey is advised when buying a property. The comprehensive overview taught me so much about building condition, maintenance and the need for repair which can often allow buyers to renegotiate price. A ‘bad survey’ doesn’t have to mean the end of a sale. In hindsight there are things I would do differently. Think of a homebuyer’s survey as a tool instead of making you feel like you should ‘fix’ everything immediately. I wish I could rewind and tell myself that new facias are not essential two weeks into living in a new home.
Depending on how long your chain is, as a first-time buyer, you feel like a mouse. The seller a cat. Their seller a crocodile. And so on.
Do you want to move to a bigger home?
When you come to sell and move up the property ladder some things become a little easier. You have bought a house before, therefore you have a slightly better idea of how the property market works. The first question you must ask yourself before buying a bigger house is whether you can afford it. Before you put your current home on the market, speak to a mortgage advisor. As a rule of thumb, lenders require you to earn at least three times the monthly payment on a new house. Check this handy mortgage affordability calculator. The amount you can spend on your new home is also likely to correlate strongly with how much you’re able to get for your existing home. Getting the best possible price for it is important, and it starts with getting your estate agent around for a valuation.
Help your home sell well.
Buying a house is a stressful business, selling at the same time, can be an emotional roller-coaster. Throw in work, kids, pets etc all means choosing the right estate agent who is going to minimise worry and maximise results, is an important first step. Get your property valued and invite at least three agents over to get an average estimate and inquire about their costs.
Even in an unsteady market, there are things you can do to maximise your chances of selling your property.
#Keep the property maintained (inside and out).
So, do what it takes to create that lasting first impression. Make sure the exterior of your home is well presented. Put up hanging baskets to add colour, clean windows and clear away anything unsightly.
Your entrance hallway is the first thing people will see. Put clutter into the loft, garage or short-term storage. This will make your home appear more spacious. Make it smell good. Give rooms a lick of paint. Replace any blown light bulbs and shampoo the carpets. Consider the temperature. A couple of extra wall mirrors and well positioned lighting can transform the way a space feels. Use seasonal flowers.
#Have the right asking price (do not overvalue).
Price your home to sell. What are comparable homes in your area selling for? You want to ask for as much as possible, but not so much that you turn away potential buyers. Generally, the longer your house stays on the market, the less you’ll get. Always get good photos taken and include floorplans!
#Be flexible for people wanting to view (otherwise they may view somewhere else).
When people come to view your property, let them wander freely around the house. You want them to feel comfortable and as though they can spend time looking at each room freely. Be ready also to answer any questions after the viewing. Do not moan about neighbours. Just showing the house yourself can be awkward. I prefer viewing with an agent without the owner’s present. Selling, this time will be harder with children with weeks of keeping it tidy for viewings.
Use social media to help market!
Think fees and do your sums.
There are several costs and fees associated with selling a house that you will need to factor into your budget to avoid nasty surprises.
#Estate agent fees. Currently in the UK the average high street estate agency fee for a ‘no sale no fee’ agency service is 1.2%+VAT. Check what they offer i.e. conducting viewings, where they promote i.e. online and the high street and if you as a seller are subject to a contract with them.
#EPC. Houses in England and Wales require a certificate for around £35-£150+VAT. They are valid for 10 years and are all stored digitally by the Government and accessed via the EPC Register website.
#Conveyancing fees. This will likely burn the biggest hole in your pocket. Should you use your agents recommended solicitors? Sometimes they may be grounded on money rather than merit, as agents may receive a referral fee. Always do your research on reviews. Fees will average £550-£1000 (inc.VAT). Make sure your quote is itemised to avoid ‘hidden extras’. Legal fees are typically £850-£1,500 including VAT at 20%. They will also do local searches, which will cost you £250-£300, to check whether there are any local plans or problems.
#Removal costs. Have a big clear out before moving and make some money at the same time. Professional movers’ cost anywhere from £250-£4,000+VAT. Cheaper options can be to rent a van or move yourself but remember when buying and selling exchanges are usually done on the same day.
#Mortgage fees. Check if you are liable for a mortgage exit fee or early repayment charge!
And what about buying?
#Stamp duty. A government tax paid on homes costing £125,001 or more. Usually, your solicitor will pay it on your behalf as part of the purchase process. They will normally submit your return and pay the stamp duty on completion day, having collected the money from you in advance.
#Deposit. The bigger the deposit you can pay, the more likely you are to be given a mortgage and the lower your interest rate is likely to be. As you get older and your family grows, it gets harder to save up for a sizable down payment. If you have sufficient equity in your home then this is what many families use.
#Valuation fee. A mortgage lender will assess the value of the potential property to establish how much they are prepared to lend you. The cost can be £150-£1,500 based on the property’s value. Some lenders might not charge you for this, depending on the type of mortgage product you choose. Remember this is NOT a full structural survey.
#Surveyors fee. Surveys range from a basic home condition survey costing around £250 to a full structural survey for £500 or more. We paid £800 for our previous one but the contents help us negotiate thousands off the asking price.
#Mortgage fees. These may include a booking fee, an arrangement fee, a mortgage valuation fee and an electronic transfer fee. Some feel it’s best to pay these upfront rather than adding them to your mortgage, as you pay interest, but it depends on how many savings you have.
#Cheeky extras. Save extra for cleaning fees, you may have to shell out for indemnity insurance, there may be charges for moving utilities and setting up in a new property. Don’t also forget the ongoing expenses such as higher monthly payments. When you exchange, you are likely to be liable for buildings insurance straightaway. I never knew this, I thought it would be when you moved in. Will you pay for Royal mail redirection? Do you need to budget to put pets in kennels and should you plan for buying takeaways for a day or two?
It’s all about the mortgage.
Mortgage deals are a minefield. Check your credit report and do all you can to improve your credit score. Use an online mortgage affordability and mortgage repayment calculator to get an idea of costings. First time round we were scared to maximise our budget so picked a house that didn’t tick off the must-haves so have outgrown it fast. Second time round we are more focused on amenities and space rather than aesthetics. DIY is our friend. Talk to a broker. It may seem like the obvious choice to stay with your current mortgage provider; is your mortgage portable? However, this is the time to shop around and find a mortgage deal that may suit your circumstances better. If you’re STILL within your existing mortgage term, it’s important you check which fees you’ll be liable to pay by moving. If possible, this time around I would ideally like to purchase a house with no chain. Just remember second time buyers can find it difficult dealing with the larger monthly repayments that come with a home worth more than their first.
It is a BIG step making the move to a bigger family home and one I am finding almost more overwhelming than a first-time purchase. With anything the more information, you have the more prepared you will be. I really want a garden, and a parking space!