First Time Buyer Myths Part 1

This month, we look at some of the most common myths when it comes to purchasing your first property: Whether it is for yourself, for you and your partner, or the whole family; from a one bedroom flat to a mansion. Guaranteed, it is a stressful time for all those involved (as well as their family and friends) with everyone equally desperate to set aside some of the common misconceptions, which do nothing more than cloud our minds. We look at some of the key stages in the process which aim to reassure you of an otherwise, unfamiliar transaction:

Since 2008, in Scotland, a pre-requisite of advertising a property for sale on the open market is to instruct a Home Report over the property. Home Reports consist of three main parts: 1) Single Survey; 2) Property Questionnaire and; 3) an Energy Performance Certificate (“EPC”). Let’s have a brief look at each of the component parts:

Where do you start? Well a good position to be in, is to have an Agreement in Principle (an “AIP”). An AIP is essentially an indication that the lender is in a position to consider lending you loan funds to purchase a property, and the most important question, how much they are willing to lend you! It is the first step you can take to make you seem a more desirable purchaser to the seller of the property. To be one step ahead and letting the estate agents know you have an AIP is sometimes the determining factor when a Seller is considering your Offer amongst others who are perhaps unable to provide this confirmation at such a key stage.

Well the answer is: it depends?  There are mortgage products available in today’s market whereby you are required to provide only a 5% deposit. This means that if you are considering purchasing a property at £150,000, the minimum realistic savings target you should set yourself is £7,500. Everyone’s individual circumstances will be different so if you are considering applying for a mortgage, see what lies on the horizon and how likely you are to be approved instead of trusting instinct and hoping that everything falls into place!

Not quite (you will be glad to know) All purchase transactions generally tend to work towards an entry date which has been mutually agreed between the parties. It is at this point you will need to have your deposit in place.  A rough guide to this date, is often 6-8 weeks from date of your offer. Your individual solicitor will of course be there to guide you through the process in light of your particular circumstances, but you can never be too organised.  Your solicitor will likely ask for the funds in the week leading up to the settlement date and will specify what is required of you by way of signing documents, etc.

This is perhaps the most nerve-wracking stage. Your solicitor will come to you with questions that, you feel, you may have already answered. The majority of the communication is between solicitors. It is important to know that, this is the stage where the ‘conveyancing’ is done. This can be a complex aspect of the process and can involve many weird and wonderful things which are largely resolved between the solicitors. Guaranteed, your solicitor is making sure that you will receive a property which not only feels great (to officially own) but which is also legally watertight and unchallengeable. The property could be a home for you and your family for the foreseeable future, so we need to make sure you have a good and valid title.

I mentioned that the Conveyancing Process may be the most nerve-wracking stage. Bar one other – having a concluded contract. The contract for the purchase of a property is made up of an offer and (sometimes several) formal letters issued between the solicitors acting for the purchaser and the seller. This contract is known as the ‘Missives’ and once you have concluded missives, you have entered a legally binding contract to purchase your new property. For those of you who may find themselves in a transaction whereby all parties are in a position to conclude missives at a comparatively early stage in the transaction, thereby having peace of mind that there is a legally binding agreement in place, consider yourselves fortunate! Nowadays it is not uncommon for missives to be concluded very late in the transaction, which is not good for anyone’s finger nails! If you are at the end of a long chain for example, matters can unfortunately go at a pace slower than you would like, please bear that in mind.

Once the process of concluding the missives has completed, your solicitor will thereafter proceed to complete your purchase on the entry date. This is when you will get your keys! Your solicitor will thereafter deal with the registration formalises of your title deeds, but at this point you have nothing more to worry about other than possibly the stress of moving in, decoration, etc!

As soon as you are thinking about purchasing your first home, please do not hesitate to get in touch with our