How do I buy a house? Clueless

[ribbetribbet]

Hi,

DH and I in the position to buy our first home. Our parents are useless and don't help with advice for things like this.

We have a mortgage in principle. How can we tell if something is a good price for what it is?

Should we pay too much attention to things like leaseholds etc? We'd like a freehold if possible but people keep saying it doesn't matter?

Is there anything in particular we should be looking out for structurally? Damp etc?

So we put in an offer, and then they accept - does the survey and stuff come after that?

Thanks very much, sorry these are such dumb questions but I'm honestly clueless and really daunted by the whole process.

I'm assuming you're not in Scotland where it's all a bit different.

Yes, survey after offer accepted. If the survey finds problems, you can revise your offer or pull out. A full survey will look for damp, rot, dodgy roof, all sorts. Your surveyor should also provide a valuation so the mortgage company has confidence that you're not overpaying. Your conveyancer will carry out searches for stuff like rights of way or nearby planning applications (so you don't your rural view obliterated by a 600 house estate within the year).

Freehold is easier than leasehold. I would always go for freehold first.

Buying your first house is terrifying but it is SO good once you move in.

Thank you! Yes I'm in England.

I think I remember also seeing an 'idiots guide to house buying' on MoneySavingExpert website?? (not saying you are an idiot, I have a similar lack of knowledge :-))

yep here

www.moneysavingexpert.com/mortgages/mortgage-guide/

Sorry, that wasn't actually helpful - only about mortgages. Must have been elsewhere i saw it....

If in England, you look at what you can afford or a little above.
I would always buy a freehold property, I have seen so many people get stung by leasehold especially with new properties.
Put in an offer of what you think the house is worth, do your homework on right move on what similar houses have sold for on that street. Also remember that the longer the chain it's more likely to fall apart.
Once offer is accepted, appoint a solicitor and get a survey done, I would always have a proper survey done, instead of a drive past one that banks offer.
The solicitor will check the legal work and talk about what included in the sale.
Just before exchange I would request another viewing to make sure that everything is ok with the house, and get your solicitor to state in the contract that the garden is tidy and grass cut and that the house is a reasonably clean (I have been stung by this before) from now on this will be what I will request!
Once exchange of contracts is completed you have up to 28 days to complete, book your removal company etc.
Good luck

It's a very daunting process OP. I've been through it twice and I would struggle to explain it in much detail! A word of warning - if you're in England, the process can be torturously slow. Expect it to take at least 3 months from offer being accepted to getting keys in your hand, and taking more like 6 months is not unusual. Some lucky folk get it all done and dusted in about 6 weeks but that's very rare. Best of luck, its worth it!

Hi that's very exciting.

I would go onto rightmove or zoopla sold house prices and see what properties have gone for in the past - you'll get a better idea of what it is worth. Have a look on what is currently on the market too.

Have a look round a home and check anything you are particularly bothered by (I weirdly always ask to turn on the showers as I had pathetic showers and putting in power showers can be expensive) - see if there's any damage to the property - mould, large cracks, uneven floors etc.

Put in an offer you think is worth it and what you'd be willing to pay - make sure you take into account legal fees, stamp duty, mortgage fees, surveys and redecoration fees and any other repairs it would need.

If it is accepted great, if not there may be room to negotiate.

Appoint a conveyancing solicitor (also check with your mortgage company if it has to be someone approved by them). Also go back to your mortgage company with the agreed price and check they will stick to the full amount they offered (this isn't always the case), they will also send out a surveyor of their own to check it's worth what they're paying. if you're putting down a very small deposit the result of this may affect what they're willing to give.

Appoint a surveyor who will look round the house and see if there's any major issues - do not skimp on the surveyor. There's always gonna be a few issues with any house but a surveyor should point out any big flaws. if it's something big that's gonna cost a lot to fix you can either just get on with it, try to renegotiate a price or walk away.

Then just wait...and wait and wait. Conyenencing solicitors are notoriously slow. Eventually you'll get to exchange which is everyone signing the contract saying you'll move on a particular date and pay this price. You are now responsible for the house even if you aren't living in it so make sure you get some insurance.

Completion day is moving day - I'd recommend a completion at least two weeks after exchange to sort packing and movers etc bear in mind as well things like sofas and beds can take months to order so make sure you've got something in the meantime.

Move and celebrate (cheaply as you will have no money)

As for lease v freehold. If you're buying a flat it will be hard pressed to find a freehold but i wouldn't buy a house on leasehold. If you do leasehold make sure you check the fees etc carefully and the lease should be well over 100 years at time of purchase.

Avoid new builds like the plague - every one i know whose bought them has regretted it, usually ending up with loads of issues inc damp and the resale v purchase value is redic low and intial purchase price is way more expensive. they're not great investments.

First please view whichever property you want to make an offer on at LEAST twice, and three times is not outrageous. This is the most money you will be spending in your life. First with your heart, second time with your head. Third time with a builder or friend (for second opinion) and measuring tape!
Most flats are leasehold and I wouldn't buy one less than 125 years, certainly no less than 90. You can get share of freehold or even leasehold and share of freehold.
Most houses are freehold, though some are on really long leases (that started at 999) so are virtual freeholds. Some less.
Your lawyer can help walk you through the process after you have found a property (look on rightmove and check out 'sold' prices for the neighbourhood - though its tricky right now but it should give you an idea). Ask the agent to justify the asking price too. Your lawyer will explain the lease or freehold responsibilities. You have to look out for ground rent and service charges (and how they may increase over the years).
After offer accepted, the agent more or less bows out, except to arrange times for surveyor etc and that is usually done directly with them. They will keep an eye on progress and can ask sellers questions, but it's up to your lawyer from here on in. Yes get a survey - unless a flat in a sizable complex. If a house get a homebuyers survey. This is the mid range one. A full structural one if you see anything concerning (big cracks etc), but I generally just take a builder friend with me if I'm that worried. The survey will help with negotiations if it flags up something (like damp or roof issues). It would be normal to have the seller pay for half, or take half off the agreed price, unless your initial agreed price had been negotiated considering these. Your lawyer will start the conveyancing. This is applying to the council for drainage/flood risk stuff plus any planning applications that may affect the property, land registry details (which will indicate rights of way etc) and so on. They will prepare a pack for you. The seller's lawyer will draw up a contract and also have the sellers fill out a fixtures and fittings form (what's included in the sale) and property condition (what guarantees, planning permissions, building regs, FENSA, who supplies the energy, where the water meter is and so on). This will be sent to you by your lawyer with your pack. They will make sure that everything is in order.
Meanwhile your mortgage company will want to value the property to make sure their loan is covered with whatever loan to value you have agreed. Hopefully this will be in line with your agreed price.
Delays come with the conveyancing process and the speed of your lawyer is crucial. They have to keep on top of the other lawyer too (or several if you are in a chain of buyers and sellers). The contract will have the exchange date (when you put 10% down, and at that exchange you are now legally obliged to buy and seller to sell). And the completion date. These are both movable if all parties agree and there are several reasons why this happens. You sign the contract when the terms are agreeable. Then you wait! Tentatively book a removals firm...

Thank you so much all, this is incredibly helpful and reassuring!

How can we tell if something is a good price for what it is?
Look at details of similar properties nearby & compare. Ultimately if you think it’s too expensive for what you are getting look at other properties.

If you like somewhere you put an offer in then, if it’s accepted, call a few solicitors and ask for their conveyancing fees and pick which solicitor to use. The solicitors guide you through it all tbh. Survey & searches will then be done. Some info here. Scotland is completely different.

www.your-move.co.uk/buy/guides/house-buying-process-england-and-wales

Look at floor measurements. See how they compare with current place.

Make a list of what you want from a house,ie near to facilities and transport.
Go for Freehold.
Don’t Don’t Don’t get talked into the estate agent telling you they want you in with their finance people to check you have all the right finances.They are trying to sell you products.
Don’t believe a word estate agents say.If their lips are moving they are lying.
When you find houses you like,have a look round the neighbourhood at different times to see what the areas are like.
And finally,prices are about to drop,so do not rush in to anything or pay top whack.Currently people are offering anything up to 10 percent off asking price.The estate agent will of course say the buyer will be insulted.It is your money you are putting down

@Bells3032 @ribbetribbet
"Avoid new builds like the plague - every one i know whose bought them has regretted it, usually ending up with loads of issues inc damp and the resale v purchase value is redic low and intial purchase price is way more expensive. they're not great investments."

Oh dear! That sounds unfortunate. Although, I started a thread on this forum and asked about new build experience because I'm in the process with one. Tbh, I think it depends on the builder and location, because it does seem to vary. There are some advantages, but also disadvantages with new builds too.

Initially I was not considering new builds. However, most the 2nd hand homes coming up in the area in my budget needed some renovation work and that can easily become a money pit. New builds ought to come ready to go and come with warranty/guarantee too. Snags are common, but I'm getting a professional snagger so hoping it will be ok.

This is a useful and fact checked article: Buying a New Build vs Old House: Which is Better?.

Choosing a home is tough. So, it's worth doing as much research and making sure it's what is right for you.

Regarding leasehold.

Look carefully at the amount of years remaining. I learned the hard way when a lease gets to less that 70 years it's is virtually impossible to remortgage. Costing thousands to extend the lease.

@ChocoTrio it may very by different areas. Here the prices of new builds are usually a good 25% more (often amounting to £100k+ difference) so it really isn't worth the difference because when you come to resell it then you just can't recoop the difference. if the difference in price is minimal then it may be different.

@ribbetribbet oh and definitely freehold if you can!

Good luck!

@Bells3032 - yeah location is a big factor. There is known to be a new build premium (though 25% sounds very high even for that). New build buyers are paying the premium for the newness - no one else has had that house before, so it's easier to apply their own stamp. Also, paying the premium for the guarantee, 10 year warranty and 2 years or so settling in customer service that comes with the new home.

It's like a new car. As soon as you take it on the road, it stops being new and has lost its initial value.

As it happens the newbuild premium I'm paying for the area, compared to 2nd hand homes with equivalent square metre, is negligible and worth it bearing mind the potential renovation work I would have had to do on a 2nd hand home.

I haven't moved in to the new build house yet, so yet to see if it's worth it. I am nervous though - especially when I read horror stories like yours! So far it has actually been a good experience with the new build, the builders seem on the ball and care. I have actually enjoyed watching the house grow - I bought off plan so chose the colours/designs/extras, put a stamp on it, saw it from the very foundations and being built upwards!

When i looked 3 years ago i found 2 bed flats that were 5-10 years old were in the 350-400 mark whereas the new builds were sitting at 500k plus. This was also because they were available on the help to buy scheme which in London gave you 40% of the value of the home as a govt backed loan so it sent all the new build prices through the roof. I eventually settled on a 10 year old flat which i loved.

But my experience isn't every ones experience and these were not off plan and everything came as standard so a very different experience to yours

@Bells3032 - wow that is a big difference! Makes sense with it being London - the developers may feel they can get away with a price hike like that.

I guess it might also be different between houses and flats as well. New builds come in all sorts!