Top tips for buying your first home

On our recent Levelling With podcast episode, we spoke to Shibli Begum, Associate in our Residential Property Team, to discuss the key things you need to know when buying your first home.

What are the first things to consider when buying a property?

I would say the first thing is your finances. You might already be on the track to buying a property, in which case you might already have an understanding of how you’re going to finance the property, legal fees and SDLT and already have your savings in the relevant pots and spoken to the relevant people about a mortgage.

For most people, funding the purchase includes a mortgage so I would suggest your first step is getting in touch with a mortgage broker who can check your eligibility and then find the most appropriate mortgage deal for your circumstances. They can tell you what you can afford, the best product for you and then present them to you clearly so you can understand what it would mean for you in terms of repayment. They can also assist helping you to understand the full costs involved.

What are the first stages of the first-time buyer process?

Once you’ve decided on the home you want to buy, had your offer accepted and had your mortgage approved, finalised any remaining funding – most of which is dealt with by the estate agent and mortgage broker – then you need to instruct a solicitor.

Our role is to deal with the legal process involved in you becoming the owner of your first home in a safe and informed way. The solicitor acting for the seller will prepare a contract pack, which includes how the seller owns the property (known as the seller’s title), the property included in the sale and information about the property, such as  what, if anything, they’re leaving at the property, and any building work they have had completed and the relevant forms that go with that.

Once we receive the contract pack, we use the plan provided by the seller which shows the extent of the property you are buying to to request searches which give us further information about the property. Once we have the searches back, we will raise questions about the property with the seller’s solicitors. These are called enquiries and can go back and forth between the solicitors for a few weeks.

If you are taking a mortgage, the mortgage offer will usually be issued during the period we are dealing with these enquiries and we will then act for your lender as well as you in the buying process. This is normal practice.

Once all the enquiries are satisfied and we have your mortgage offer, we will report to you with all of the findings. This is an important stage for you as it enables you to make an informed decision on whether or not you wish to proceed.

What happens at the exchange stage of buying a first home?

Exchange of contracts is the point at which you become legally committed to the purchase. Before you can exchange, we have to agree a moving date with your seller (known as the completion date). This must also be the same for everyone else in the chain of transactions. Most of the time, though not always, there will be a period of at least five days between exchange and completion. It largely depends on how you’re funding the purchase. Let’s say though you’ve purchased with a mortgage through a lender, your solicitor would need to send them the paperwork requesting the money and majority of the lenders ask for 5 – 7 working days between exchange and completion.

The 5-7 days are also helpful for you as the buyer, as it allows you to arrange removals, get time off work to move, pack and move your money around to send to your solicitors.

Once everyone is ready to proceed and a completion date has been agreed we then progress to exchange the contracts and that is when you legally commit to the purchase including the agreed completion date. At this point, you will pay a 10% deposit based on the purchase price.

The deposit means that if you do not proceed to complete, you would lose your deposit. You must therefore be certain that you want to buy the property you have chosen and you have all the money in place that you need before you instruct your solicitor to commit you to the purchase by exchanging contracts. If you do withdraw from the purchase, you will not only lose your deposit but you could also be liable for any reasonably foreseeable costs incurred by any other part in the chain of transactions.

What should I expect at the completion stage when buying a first home?

Once exchange takes place, the solicitors will then prepare for completion. This will involve the seller’s solicitors confirming the total sum required to complete and their bank details and us, as your solicitors, requesting funds from you. The amount you will need to send us is the remaining total cost of the purchase which is the balance of the price, the stamp duty land tax (if any) and our fees and costs. We will also undertake searches required for completion.

A tip that I give to my clients is to check with your bank the amount of money you can send daily without visiting your branch. This allows you time to plan ahead of your time. This is because we need to receive your completion funds at least one working day prior to the completion date.

On the day of completion, we will send the balance of the price to the seller’s solicitors. When they receive it, they will call us and confirm that legal completion has taken place. They will also confirm to the estate agent that the keys can now be released to you. We will call you to confirm that you have completed, and you are then free to move into your new home.

At this point, there is still one legal process to take place which is to register the property in your name at HM Land Registry; however, this process takes place by us in the background. It can take many months for the process to be concluded because there are significant backlogs at Land Registry.

How long will the whole purchasing process take?

As a benchmark it usually takes between 8 to 12 weeks for freehold properties to complete from when we receive the contract so it could be longer taking into account when your offer is accepted. For leasehold it can be closer to 16-18 weeks. It really is on a case-by-case basis though as there are a lot of things that can impact and delay the process.

What are the most common causes for delay in the purchasing process?

We are subject to very stringent rules around identifying clients and their source of funds. These checks have to be concluded before we proceed very far with the process. To minimise any delays associated with this, we recommend that clients are clear and prompt with the information they provide at the outset.

Some buyers will be fortunate enough to be gifted some of the purchase price and we are required to identify who is making the gift and their source of funds too. This can lead to delay and so we recommend any person gifting money is also clear and prompt in the information they provided.

If there are several buyers and sellers, then the chain is only complete when the person at the end of the chain has nothing to buy and the person at the other end has nothing to sell. The length of the chain is a significant contributor to delays and also increases the risk that the chain may collapse. Your selling agent will monitor progress throughout the chain during the process.

Searches can take longer to obtain in some areas which can lead to delay.

Unforeseen title issues can also lead to delay as they need to be resolved before exchange can take place.

How often will my solicitor be in contact with me?

Again, this is very dependent on which firm you choose. There are lots of things that go on ‘behind the scenes’ that your solicitor may not update you on, so it might seem like there’s some radio silence. Your solicitor will always contact you if there is anything important that needs to be discussed or explained though, and if you want to ask a question or get some clarity, you are well within your right to request a call or meeting.