Before you even set foot through an estate agent's door, you need to lay down the fundamental groundwork for buying the property — the finance.
I cannot emphasis enough how incredibly stress alleviating it is to get an independent financial advisor as a way of securing the best possible deals on the market.
IFAs can help with everything from the mortgage to the insurance related to the home. They also have access to vast platforms of mortgage options that the person on the street wouldn't. On top of that, they actually speak to humans when looking for a deal for you or working through problems you may come across when applying by yourself.
And guess what? You don't pay them commission because the law says so.
Don't get Help to Buy unless you're desperate
When you look to buy a property, always think the long term. It doesn't matter that it's your first home and you're willing to get a pokey small starter flat or a house — your mortgage can break you.
Help to Buy is a government scheme where a buyer only has to put down a 5% while the government makes up a further 15%. This sounds fantastic right? Well, you first of all have less equity in your home and secondly the mortgage products are more expensive. In other words, you could be paying more per month in interest on your home because of this scheme.
Also, if you're finding it a struggle to raise more than 5% deposit, you've got to ask yourself whether you're financially fluid enough to keep up with payments should interest rates rise.
Realistically think about whether you could afford an interest rate rise
This may sound like a boring topic but there's no point in bagging a property, only to lose it because you're too broke to keep up with payments.
Us Brits have stayed rather comfortable since interest rates fell to 0.5% in 2009 — but this isn't going to last forever. Really think about whether, even if you get a great mortgage deal, that you would be able to cope with hundreds of pounds more a month in payments.
Realistically thinking about your financial situation now as well as your career trajectory and earning power is vitally important.
Get a mortgage agreed in principle
Securing your mortgage is paramount to getting your home. It's crazy that there are still a lot of people who just sort a deposit, look at properties, and then hope later they'll be able to get a mortgage immediately.
The amount you can borrow comfortably is the linchpin to the whole process and of course can narrow down exactly what you can get for that money and therefore where you're likely to live.
Also it's like holding the Golden Ticket. Having your IFA writing a letter with confirmation that your mortgage is agreed in principle will put you in the estate agents good books.
Being a conveyance solicitor is pretty repetitive but a guaranteed earner. The result is there are some pretty crappy lawyers out there. It's pretty much paint by numbers for them and there will always be a steady flow of business.
So, it's vital you secure a good solicitor that you know from trusted friends or colleagues.
Solicitors can make or break a deal, so make sure you have a good one on board, are aware of the fees (which are between £950 and £1,250), and have sent off all the correct documentation to make the purchasing process as streamlined as possible.
Get all your documents and identification ready
Sometimes the biggest headaches for either party is the delay between each step of the process because of documentation. If you have already spoken to an IFA, secured a mortgage and a solicitor, make sure you have the following documents to hand:
— Passport — Three months of bank account statements from the bank itself (not internet print out) — Two proof of addresses — Three months of payslips — Proof of deposit funds — Gift declaration forms signed by the relevant parties. (This is usually when the funds for the purchase are partially or fully being given by another party - usually parents or family members).
Live in rented property while you look
If you can rent a place while you look for a property, this will make it all the more stress-free while finding a home. You'll be in the controlling part of the housing chain because you are not reliant on someone buying your home — you should have done this already.
By being in rented accommodation you also have a lot of freedom to shop around and not be stuck in the horrific situation where you may be committed to buy somewhere but the person purchasing your property pulls out.
You also don't have to panic if the process is dragging on. You are in control.
Narrow down three areas at the most where you want to buy
It goes without saying that it's usually about location, location, location.
Nailing down three areas where you really want to live will mean you can concentrate all your efforts on finding the perfect place in the perfect location. Now you have a budget and a mortgage, take time to look at what you can get for your money.
For example, you may have your heart set on living in an affluent London area, but do you really want to spend £500,000 on a 1.5 bedroom flat with no garden or for an extra half an hour commute, a five bedroom house and garden?
Have a thorough search and debate and then stick to just 3 areas — two would be ideal though.
Be realistic in where you want to live
Everyone would probably love to live in Mayfair in London or the Cotswolds in Oxfordshire but will your budget it allow it?
Location is important but not everything. Are you able to get to and from work in a decent time? Is living near the lively high street where all the pubs and clubs are going to be as fun in five years' time for you?
Think about the long term, even if you hope to move on in just a couple of years. If the market crashes or you lose your job or you are unable to move up the ladder because your wages won't allow you, make sure you would be truly happy in that area and property for the next five years at least.
If you have to option to buy freehold, always do that. But if you buy a leasehold property, make sure there is at least 100 years on your lease.
Basically, if you are a leaseholder, you "buy" a property but you don't own the land it is on. So, you will have to pay ground rent and service charges to a faceless entity that happens to own loads of land. The freehold means you own the lot.
In Britain, if you are looking to buy a flat, it's pretty inevitable that you'll be buying a leasehold property. Sometimes it looks like a flat is an absolute bargain — but that's because the lease is about to run out on the property.
Have a list of absolutes and no compromises
There will always be an element of compromise when finding a property but have a list of absolute "must haves." Whether it is a garden, three bedrooms, or even next to a park — have a list.
That way you don't waste your time on seeing properties that the estate agent is trying to flog you and you can spend your time just seeing the places that tick the boxes for you.
Meet estate agents and get on the special lists
With a plethora of property searching websites and online forms to register interest, it is very easy to look around and not have to deal with estate agents in person until on the day of the viewing — but this is a bad move.
You need to go into the branches and meet them. Sure, they will pool you in with another 20 people that want to see the same place, but this is your chance to wave that mortgage agreed in principle in their face and make them put you at the top of their list.
You can look on the online property searching websites to get a gauge of who are the active agents in the areas you're looking for and to see what kinds of properties you can get, but a lot of the time they're either gone or the open days are fully booked.
Want to know how to get around that? Well, estate agents like Barnard Marcus have a special list of people that they show properties to before advertising them more widely. To get on it, you show how financially liquid you are and your mortgage agreed in principle.
Treat every viewing as a job interview
Once you actually get to see some properties, treat every viewing like a job interview.
Don't turn up looking like you've rolled out of bed or that you're on the way to the job centre. Look smart/casual, act engaged and interested, and ask the agent or the vendor questions.
The estate agents are the gatekeepers and the vendors make the final decision, so you need to show them why you're a serious buyer. For them that means an easy commission and a quick sale.
Have a good relationship with the vendor
If you are able to meet the vendor at the viewing, it is vital you becoming friendly with them and develop a good relationship.
Many estate agents have started using the American-style form of open days for showing people round houses and this leads to a number of people making bids at exactly the same time as you.
You need to stand out. Even if someone bid the same or more than you on a property, some vendors will go with the safer and quicker sale option than those who may pose too much of a risk. If you show them you are serious, ready to move, and have all your finances in order — they'll pick you.
Thinking of getting a place so you can convert a loft or extend out the back so you can have a family? — it all comes down to planning permission. Once you've seen a property, it's worth having a check online and asking the estate agents and vendors if any planning permission applications were rejected or if other people down the street have had building works done.
It's also worth checking that the local area isn't having a huge amount of work done. There's no point in buying that beautiful flat overlooking a common if a giant block of council houses is going to be erected right outside your window.
Sell yourself to the agent or vendor when making an offer
When you make your offer, sell yourself to the agent or vendor. If you can, do it on the day you see the property, and in person.
Give them as many documents as you can — like the letter from the IFA — to show them exactly why they should pick you. You're ready to move right now and, if you're renting, have no chains to worry about.
Move fast on sending over solicitors details
If you're lucky enough to get your offer accepted— and be prepared for quite a few rejections from the inevitable bidding wars — move fast on sending over the solicitors details and get the ball rolling.
The fight isn't over yet. The vendor can still pull out, especially if they've changed their mind on wanting to accept another offer that has come in higher or last minute. Lock them in!
Whether you like it or not, always be available and respond quickly to emails and calls on the house
If you are controlling the chain, then that's great, but always be available by email at least to respond to questions from the vendors, solicitors, or estate agents.
Estate agents are hungry for their commission and if they feel you're not moving fast enough, they may start talking the vendor round to put the house back on the market to see if there is another buyer.
Pay for a full valuation
When you get to the stage of sending in a surveyor to evaluate the house, pay for the top and thorough service. While these can cost around £500, it is incredibly detailed on everything you need to know about the property.
It can also warn you of potential issues you wouldn't want to deal with or pay for. This is vital.
Be realistic on what you're willing to compromise on if there are problems
No house is utterly perfect unless you bought a complete new build but be prepared to compromise on extra costs to fix things that the vendors may not want to do.
For example, is it worth arguing over a broken door or ricketty cupboards or grubby walls for the sake of the whole house? On the flipside, if there are any structural issues, will you be willing to pay for that to be fixed in the long run? They may knock down the price of the sale for you but will you have the thousands of pounds in cash ready to pay for a new roof within the next year?
Have a £1,000 to burn
Having £1,000 available for extra solicitors costs, repairs, bills, and move out charges is a must. It doesn't matter how hard you budget, other issues will come up.
The moral of the story of buying a property is all in the preparation.