Everyone knows buying a house can be stressful. Even those who have been through the process before still find moving house challenging. But what about those first-time buyers who have not yet got their foot on the property ladder?
In this guide for first-time buyers, we seek to explain the steps involved in the house purchase process.
Before you submit your offer
Even before you submit your first offer, there are many aspects of buying a house you need to consider. It is important to be prepared before you submit your first offer to buy. Here are the key elements of the pre-purchase process.
Arranging your mortgage
Do not wait until you are ready to make an offer before exploring your mortgage options. The sooner you do this, the better.
You should speak to your lender or engage a specialist mortgage adviser. If you engage with your lender, they will offer you options on the mortgages they provide. When you engage a mortgage broker, they will review the best options available to you across the market. That means there may be better deals available than you might get from a single lender.
You should also consider the type of mortgage you wish to take out. There are a wide range of options available but the most popular options tend to be fixed rate mortgages, especially for first-time buyers. These fix the monthly costs for a period of time before reverting to the lender’s variable rate. Fixed rates allow you to budget better because the payments remain the same during the fixed rate period.
Your mortgage adviser or lender will explain what it involved with the different types of mortgages. They will also calculate how much you will be expected to pay for each of these.
Once you have decided on which lender to use, try to obtain pre-approval. This is an approval that the lender will provide you with a mortgage up to a certain amount based on the information you have provided. Please be aware, however, that the lender will not conduct the full underwriting process until a full application along with details of the house you’re buying has been lodged.
Cover the costs of buying a house
You need to prepare not only for the deposit for your house purchase. You also need to provide for the costs. You also need to consider any costs involved in upgrading or carrying out repairs to the property you buy. It is always sensible to budget for this cost before you buy.
When it comes to the legal fee you pay to your solicitor you need to provide for the outlays and expenses. These can include any arrangement fee charged by your lender, Land & Buildings Transaction Tax, Registration Dues to have the title to the property registered in your name and VAT. Your solicitor will provide you with an estimate of the costs when you engage them.
Searching for your first home
There are always choices when you start off your house search. Perhaps the first challenge is to decide where you want to live. After you’ve decided on the area, does your budget allow you to buy a property in this area?
There will always be trade-offs when you are searching for your ideal property. For instance, what type of property do you want to live in? If it a flat or a house. If it’s a flat, is it a traditional tenement flat or a flat in a modern building? Do you want to buy a newly built property or are you happy to buy a second-hand property?
How many rooms do you need? Do you need a driveway or does your new house need to be close to public transport.
These are just some of the questions you should ask yourself as you embark on your house search.
Dealing with Estate Agents
One of the key things to take into account is that estate agents who are marketing the property represent the seller. It is their job to sell the house for the owner. Usually, the more the house sells for, the bigger their fee.
The estate agent will provide information and arrange viewing and follow-up to find out if you are seriously interested in buying. However, if you are serious about buying, you should ask your solicitor to “note your interest” with the selling estate agent. When your solicitor notes your interest, if the estate agent is going to fix a closing date, your solicitor will be informed. They will discuss your offer with you in time for submission on the closing date.
Viewing properties and the Home Report
When you decide to view a property, make sure you obtain a copy of the Home Report. The Home Report contains details of the property and highlights any issues. Pay attention to anything that is marked as an essential or recommended repair. If you buy the house, you will be responsible for the cost of those repairs.
Take the Home Report along with you to the viewing. When you do that, you can discuss any repairs issues with the owners and identify the areas the surveyor has identified as needing repaired.
When you buy a property in Scotland, you accept the extent of the property as described in the title and the condition in which you find it. Be clear about what you are buying and if there is anything that looks strange or out of place, make sure you discuss this with your solicitor.
Make sure you enquire about any common or shared property and ask who is responsible for what costs. It is important to know what these additional costs are likely to be to help you budget once you buy the property.
If you can, visit the property at different times of the day to get an idea of what it would be like living in the house. It is not unusual for an area that looks nice and quiet during the day to be choc-a-block with cars in the evening making parking very difficult!
The legal process
It is very important to appoint a solicitor as soon as you decide to buy a house. Your solicitor will then be able to answer your questions and give you advice about the buying process. Importantly, once you find the property you wish to buy, they will note your interest with the estate agent and keep you informed about any closing date.
Making an offer
Whether or not a closing date has been set, there will come a time to submit an offer. Your solicitor will discuss this with you. The important parts for you are the price, the date of entry and any extras included in the purchase. Your solicitor will include all necessary conditions to ensure the title is safely transferred into your name.
How much you need to offer to secure your purchase is always a challenge. When considering the price you want to pay, make sure you review your budget so you do not overextend yourself. To understand how you reach your best price, we recommend you read our article “Offers over – but by how much”. When you are satisfied you are making the best offer you can, instruct your solicitor to go ahead. If your offer is accepted, the next milestone is reaching conclusion of missives. Please read our article on what it means to have a concluded missive to get an understanding of what is involved.
The conveyancing process
Once your offer has been accepted, your solicitor will deal with the conveyancing process. This involved checking the title and reporting to you and checking various property and personal search and local authority reports. Your solicitor will prepare the deed transferring ownership of the property to you and arrange to have the seller sign it. If you are taking out a mortgage to buy the house, your solicitor will prepare the Standard Security you will need to sign. The standard security is the formal loan document that it registered in the Land Register when you buy the house. Your lender can use this to call up the security should you breach the mortgage conditions or fail to pay your mortgage and then sell the house on the open market.
There are many technical aspects of this process and your solicitor will send you information on these. It is important that you check the extent of the property against any plan your solicitor sends to you. Remember, you have seen the property – it is very unlikely that your solicitor has.
The date of entry and settlement
Finally, your date to get your hands on the keys. The date of entry and settlement if when you pay the price for the house and the seller hands over the keys. Your solicitor will deal with the formalities of settlement and arrange to pay any Land and Buildings Transaction Tax and register the title in your name. Once registered, you will become the owner of the property.
Your solicitor will give you a settlement statement showing what monies have been received, who has been paid and what their fees are. They will, of course, provide you with an estimate of these costs at the outset and will have asked you to send your deposit and costs before the date of entry.
If there is any money due back to you, your solicitor will send that to you. If you are due to pay your solicitor, the amount will be details on their fee note and cash statement.
Looking to buy your first home
We hope you found this guide for first-time buyers helpful. Our solicitors have many years of experience in advising clients on house purchase and sale in Wishaw, Motherwell, throughout Lanarkshire and across Scotland. The first step when you are thinking about buying a house is to appoint a solicitor. If you would like to have a chat with us about buying a house, just get in touch with us today.
