If you are a ?rst time buyer, entering the property market can be daunting. Here are our 12 top tips and step by step guidance.
- Appoint a solicitor
This is one of the ?rst things you should do, so that if you see a property you like your solicitor can move quickly and note interest or submit an o?er on your behalf. There are a number of things to consider when deciding who to appoint. Ask for a detailed estimate of fees and outlays and ask who you will dealing with eg. a solicitor, a paralegal or a team of people. As this is likely to be one of the biggest purchases you make, you should discuss matters over the phone, or arrange an early meeting with the person who will have overall responsibility for your work, before accepting the estimate. You want to have con?dence and trust in the person who will be advising you. Bear in mind there are certain checks a solicitor must carry out before they can do any work for you. Dealing with these early on means your solicitor can act quickly when you see a property you like.
- Obtain mortgage advice
If you need a mortgage, arrange to speak to a lender or mortgage adviser to ?nd out how much you can borrow and ask for a mortgage decision in principle (sometimes called a mortgage promise) which is approval based on an initial assessment of your personal circumstances. Only when you have found a property can you make a full mortgage application, but provided the information provided is accurate, and the property is acceptable to your lender, there shouldn’t be a problem. While any o?er for a property you make will be subject to a ?nal mortgage o?er being issued, having a decision in principle provides comfort to both you and the seller. As a ?rst time buyer we recommend that you use a mortgage adviser, as they can assess your ?nances and advise on the most suitable mortgage deal for you. There are many to choose from and getting the right advice will save you money in the long run. They can also advise on other ?rst time buyer products such as the Government’s help to buy ISA.
- Attend one of the ESPC’s ?rst time buyer events
And enter their prize draw before 13 October 2017 so that you have the chance of winning £3,000 towards your deposit. Enter here espc.com/win
- View properties
The ESPC, which is used by solicitor estate agents, has a very strong presence in Edinburgh and you should arrange to sign up to receive alerts when suitable properties come to the market. While the ESPC is the ?rst port of call for many, it is also worth signing up for alerts from the other online portals such as Rightmove or Zoopla which are used by both solicitor and non-solicitor estate agents.
- View Home reports
Don’t waste time viewing unsuitable properties. We recommend looking at the Home Report for a property before viewing. If you want a “walk in” property then something requiring complete renovation may not be for you. Most properties on the open market other than new builds must have a home report and they can usually be downloaded online at no cost. A home report is made up of a survey and valuation, energy report and property questionnaire. In a buoyant market, the seller may be looking for a price in excess of the valuation. Don’t forget that your lender will lend on the basis of the valuation and, therefore, you will need to make sure you have a large enough deposit to cover any amount you pay over value. Your mortgage adviser can explain this to you. Most purchasers and lenders are happy to proceed on the strength of a home report if it is up to date. If a report is over 3 months old then your o?er should be subject to the seller updating the survey/valuation. Of course, you may still choose to have your own survey carried out and your lender may want their own valuation carried out. In some cases, it will certainly make sense to have additional checks carried out (eg if the surveyor had no safe access to the roof an inspection by a roofer may be more useful than another survey). Most solicitors will o?er guidance and will also be able to instruct any extra reports you wish to have carried out.
- Noting interest
This simply means asking your solicitor to note your interest in a property with the selling agent. It doesn’t commit you to o?ering and doesn’t prevent a seller from accepting an o?er from someone else but, in most cases, it means you will be kept informed of any developments. If you are the ?rst note of interest it may be worth trying an early o?er. If there are other notes you may decide to hold o? and see what happens. If a seller has many notes, then they may choose to set a closing date for o?ers at which everyone will be invited to submit sealed bids. Your solicitor can advise on tactics and give up to the minute advice on what similar properties are selling for. This is very important in a fast-moving market.
Most solicitors use a standard type of o?er which will be submitted on your behalf. It will cover key points such as the price you are prepared to pay, your preferred entry date (the date you pay the price and get the keys) as well as containing all the necessary technical clauses. If you submit an o?er, it is normal to expect a verbal response within 12-24 hours. If the selling agent con?rms verbal acceptance, this is the point at which you should proceed with your full mortgage application, unless the o?er is subject to other checks being carried out (in which case you should wait until those have been done).
Missives are the letters that will make up the legally binding contract between you and the seller. The o?er is a missive letter. If the o?er is verbally accepted the seller’s solicitor will issue a formal written acceptance. This too is a missive letter. It is normal for this to delete some conditions in the o?er eg those making the o?er conditional on further reports that have been carried out. Your solicitor will advise you carefully on the acceptance. If you’re happy with everything, and your mortgage o?er has been issued, then your solicitor will issue a ?nal missive letter con?rming this and at the point you and the seller will be tied in. Otherwise the exchange of letters will continue until agreement is reached. Your solicitor will sign the missive letters on your behalf.
- Title deeds and searches
Your solicitor will check these on your behalf and provide you with a report on the title, outlining the legal description of the property and the title conditions that apply eg the share of common repair costs applicable to the property, any restrictions on use, factoring arrangements and so on. In most cases there are no issues with title deeds, but if there are any serious issues, which the seller can’t rectify, then you may have to withdraw.
- Mortgage papers
Once your mortgage application is approved by your lender a mortgage o?er will be issued to you and copied to your solicitor. Your solicitor will then prepare the mortgage deed (standard security) for you to sign. Your solicitor is also responsible for reporting on the title to the lender and requesting the funds in time for the entry date. Your solicitor will separately request funds from you to cover the balance of the price, the LBTT, if applicable, and the dues required to register your title and mortgage. Deposits are not usually paid to sellers in Scotland except when buying a new build property and so funds are generally not required until just before the entry date. To allow plenty of time for the legal formalities to be dealt with and mortgage o?er produced, we generally recommend an entry date of 8 weeks from the date of your o?er. This is however negotiable and if you prefer a later date you can put that in your o?er.
- Land and Buildings Transaction Tax
If LBTT is payable (check your estimate) your solicitor will assist in completing the necessary tax return on your behalf and will pay the LBTT following completion of your purchase. This must be done before your title can be registered. Once the title is registered an updated title sheet will be issued electronically by the Land Register and your solicitor will provide you with a copy.
- If you buy a new build property the process is slightly di?erent.
The builder normally issues an o?er to sell in their preferred format and in most cases they won’t accept any major changes to it. They won’t agree a set entry date unless the property has been completed at the time of the o?er. The date will normally be x number of days after the completed property has been passed by the Council as suitable for occupancy. There can be many reasons for delays such as poor weather conditions a?ecting the build, shortage of materials and so on. This means you need to be more flexible about your move in date and have somewhere to stay until your new home is completed.
Don’t be afraid to contact your solicitor with any questions you may have, even if they are not directly related to the legal process. Most solicitors will be happy to o?er guidance on the removal process and other practical matters.
This is a brief outline of the process. If you would like further information on the services we provide, please don’t hesitate to contact us. We are very happy to answer any initial queries you may have either over the phone or in person.