- Personal Finance
A guide for first time buyers; from making an offer to moving in!
First time buyers
Buying a house for the first time can be an incredibly exciting yet daunting experience. For the majority of first time buyers this purchase will involve decision making on a scale that they have not previously experienced with consequences that may remain with them for many years.
From finding that first perfect home to financing the purchase and finally moving in, this article will offer some sound advice to help first time buyers. Looking at some case studies it will teach you the common mistakes that are made by first time buyers as well as some suggestions for removing a lot of the perceived stress associated with that first exciting purchase.
Guide for first time buyers
making the decision to buy - first time buyers
The majority of first time buyers will have come from a rent paying situation, either as in informal arrangement with parents or a formal rental agreement on a property. Many have seen money spent on renting as money wasted. Yet in the recently declining housing market, renting whilst waiting for the market to 'bottom out' would have been a shrewd move, reducing the chances of a purchase resulting in negative equity and maximising any financial gain in any subsequent market recovery.
It is very important that you make the decision to move based mostly on your financial ability to afford the move. Too often first time buyers are prompted to move through circumstance or emotional factors and this can lead to problems down the line. First time buyers must make sure they have considered all the costs associated with the purchase and allowed provision for those hidden expenses that even the most rigorous planning can overlook.
For first time buyers choosing the exact moment to buy can be difficult, especially if you think you have seen the perfect property. Consider carefully your long term plans for the property. If you are buying a family home that you may have for twenty years, then concerns of negative equity may be less so, as it is likely that the property market will have recovered significantly by the time you sell. However if you are buying it with every intention of it being a stepping stone to bigger things then you will need to make a more considered purchase. In this circumstance selling below your purchase price is not an option and you may be better off continuing to rent and saving a larger deposit.
Finding the right home - First time buyers
For most first time buyers there can be a large range of factors when choosing the right property. Its important that you don't let one factor unfairly dominate the rest of your factors, particularly where finance is concerned. For example if it is important to a first time buyer to have outdoor space, then they may prioritise a property with a large garden over a property with a smaller garden that is financially more viable.
As with the decision as to when to buy a property its important to include your plans for the futurewhen deciding which property to buy. For a family home you may well be able to stretch your budget and even take on a house that may take some years to get into the state you want it. In contrast a first time buyer looking to get on the ladder with a view to upgrading in a few years may consider it more financially viable to buy something well within their budget that can be a home whilst they save or work on a career that will provide the finance for a family home. Certainly it may not make much sense for a first time buyer to finance to the maximum to take on a larger property that needs a lot of work, especially if the market makes only a slow recovery, or non at all.
First time buyers guide
making an offer - first time buyers
For first time buyers that have found the property that is suited to them the next step is to make an offer. There are no hard rules as to how much you should offer as the circumstances of every first time buyer is different. Consider how keen you are on a specific property and don't be afraid to make a considerably lower offer, particularly if the property has been on the market for some time. However beware of missing out on a dream property just to get a small price reduction.
Taking the stress out of moving - First time buyers guide
With your offer accepted its not quite time to get excited yet. There are still plenty of potential stress points ahead. If you don't already have one, then try and find a conveyancing solicitor either as a recommendation from a friend or one that works locally so you can visit them. Solicitors can have an annoying habit of being 'unavailable' when you need them most, and having the option to visit will help significantly.
A competent solicitor and mortgage advisor should take care of most of the paperwork, but don't be afraid to hassle them. With each meeting try to get a set of objectives in place and a timeline. Always arrange to ring them rather than waiting for them to call you. As a first time buyer it is easy to get 'pushed' around a bit, so don't feel pressured into anything or have any reservations about asking questions or taking time to get a third opinion.
First time buyers guide books
First time buyers guide - Final tips on moving
For a first time buyer that has been living in a rented property, moving home for the first time can have a lot of unexpected costs and things that need doing before you can relax in a new home. Once your offer has been accepted, start making a list of all the jobs to be done. Consider all the organisations that will need informing. banks, driving licences, phone contracts, council tax, utilities and credit cards will all need changing amongst others.
Try and anticipate any work that will need doing to the property in order for you to live there. If significant work needs doing, such as new heating or electrics consider having a week or two beteeen moving in and leaving your rented accomodation. This will give you the chance to have any messy work done before you move in. For many first time buyers, the unexpected stresses of moving house could do without a follow of living in a building site.