Tips for First Time Buyers

Are you looking to buy your first home? JW Hughes has an experienced team of conveyancers who can help guide you through the process. Here are a few tips if to help you if you are a first time buyer.

It is a great time to be a first time buyer! If you are purchasing a property up to the value of £180,000 in Wales, you will have no Land Transaction Tax to pay (which is the old Stamp Duty Land Tax). If you are purchasing your first property in England up to the value of £300,000 you will have no Stamp Duty Land Tax to pay.

In Wales the government has various schemes to help you buy your first home through their home ownership schemes, which provide financial assistance to help people in Wales own their own homes. Each scheme is aimed at people in different situations. For more information look at their website: https://beta.gov.wales/help-buy-wales.

Also, if you are saving to buy your first home you can save money into a Help to Buy ISA and the Government will boost your savings by 25%. So, for every £200 you save you will receive a government bonus of £50. The maximum bonus is £3000. For more information see https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/.

When looking for a property, make sure it is affordable – remember bills may have to be paid on top of the purchase price, especially if there is a leasehold service charge and ground rent. Aim for best area you can afford and that it is in an environment you would like to live in. Make sure you do your homework on the property so that you can budget properly. Speak to the neighbours and visit the property at different times of day so you can see it from every aspect. Make sure you know what you are buying. Ask questions! It’s good to know why the seller is selling, how long the house has been on the market, etc., as this can bring up other considerations that wouldn’t be found through the searches. Find out as much about the property as you can. Has any structural work been done to the property? Also think about what information you want about the property - for example, what is the route of the drainage system?

Prepare your finances and know your budget and be prepared for costs other than the deposit, such as legal fees and mortgage fees (though these can often be added to the mortgage). Shop around early for home insurance so you’re ready to go when the time comes. Make sure you understand what finances your solicitor will need. If you have a Help to Buy ISA, make sure you understand your bank's processes for closing down the account in readiness.

Be prepared! If you need a mortgage, get the mortgage offer in principle as soon as you can. Have your agreed deposit ready, and if this is coming from elsewhere then make sure all parties are aware of that. Use estate agents rather than trying to go it alone, a good estate agent will often act as a go-between. Remember to fill in all forms promptly & accurately.

Once you have decided to buy make the seller an offer through your estate agents. They will guide you as to the price to offer. When making an offer never immediately propose the full asking price, start from below the asking price and negotiate to get the best deal for you. Make sure you budget for all expenditure and have a contingency for unexpected issues that may arise.

Once the offer is accepted you will need to choose a good conveyancer to help with the transaction. Engage a solicitor from the beginning that gives you a good, clear explanation of the process. Here at JW Hughes we have a team of very experienced conveyancing lawyers who will guide you through the whole transaction and keep you up to date with the process. Throughout the process it’s important to respond to your solicitor as quickly as possible, for example if they need your views on something, or to resolve any other issues that come up in the process.

Get your survey organised early, so that any issues can be resolved to avoid any delays and negotiate with the estate agents if there are any adverse results; if you need to have work done on the property, get quotes from specialised contractors. You may be able to further negotiate on the price.

If you are in rented accommodation, don’t quit your rental until exchange of contracts; consider completion dates based on when first mortgage repayment is due and when your rental will expire to save on costs.

Until you exchange contracts, neither side has any legal obligation to buy or sell the property, and both can pull out without any penalty (or only the deposit on agreeing offers, if one was made). Both buyer and seller sign identical contracts, but only when they are formally exchanged by the solicitors does the deal become legally binding. Between exchanging contracts and completion, either side will almost certainly pay major penalties if they pull out. You usually exchange contracts between 7 and 28 days before completion – although you can exchange contracts on the day of completion. Because exchanging contracts means you are legally committed to buying the property, you have to make sure you have everything in place before hand, so that nothing can go wrong. You should only exchange contracts after:

You have agreed on an offer, including for fixtures and fittings
You have had the mortgage valuation and any surveys you want
You have been formally offered a mortgage in writing
You have arranged funding for the mortgage deposit
Your solicitor has done all relevant searches
You have organised building insurance. After you exchange contracts, you are liable for the property, and so you need to have buildings insurance in place before hand
You have sorted out funding for the contract deposit (traditionally 10% of the purchase price, but nowadays often less)
You have agreed on a date of completion for the sale, which will be written into the contract
You have read, understood and signed the contract

After contracts have been exchanged both sides of the transaction are legally committed to the terms of the contract, which in basic terms usually means the buyer must pay the purchase price by an agreed date and the seller must hand over the keys to the property and vacate by a certain date. A deposit is usually paid by the buyer’s solicitor to the seller’s solicitor at this time but, critically, the purchase price has still to be paid and so whilst the transaction is agreed and legally binding, it has yet to happen.

The date that the contract requires the transaction to be completed is the day upon which the remaining money is paid over to the buyer’s solicitor and the seller vacates the property and hands over the keys. This is usually moving day and is known as the date of ‘completion’. The solicitor’s will arrange the date and you can make plans accordingly.

On completion you will be given the keys to your new home. You can now move in and enjoy it!

If you are a first time buyer we would be very pleased to help you and for all your conveyancing needs, please contact our expert team:

Nick Passey np@jwhlaw.co.uk 01492 596596

Kim Wilkinson kw@jwhlaw.co.uk 01492 874774

Rhys Lewis rl@jwhlaw.co.uk 01492 596596