Purchasing your first home can be a daunting prospect. We’ve put together a guide to the key issues that can negatively impact on a first-time home buyer, the key stages of the buying process and some helpful professional tips regarding the legalities of your purchase.
Opening the door of your first home is one of life’s key milestones. However, the actual process of buying your first home can be a daunting experience, with first time buyers frequently finding themselves overwhelmed by the mass of information provided by the Estate Agent, Lender and Solicitor.
I’ve developed a short guide to the key issues that can negatively impact on a first-time home buyer, the key stages of the buying process and some helpful professional tips regarding the legalities of your purchase.
Your Solicitor will appreciate that you are excited to purchase your first home and want to progress the matter as soon as possible. However, the Title documents must be investigated. The Vendor is required to furnish certain replies to enquiries, searches and property certificates, which can take between 2-6 weeks to obtain. It is vital that you obtain good and marketable title to ensure that the property can be sold without difficulty, and this may require some patience on your part.
Obtaining a professional housing survey is a very important part of the home buying process. A house survey helps you find out about the condition of the property and identifies any problems or issues that will form part of the negotiations with the seller.
Many first time buyers do not want the extra expense of obtaining a survey and some avoid it. But the failure to gain a professional survey can lead to major problems and legal issues after you have purchased the home.
A survey may reveal a minor or major structural defect, rot, woodworm or another significant issue. If such problems come to light after completion, you have no remedy. I have successfully renegotiated the purchase price of properties on behalf of my clients to counter for problems revealed in their survey. You wouldn’t spend £5000 on a car without taking it for a test drive, you shouldn’t spend upwards of £100,000 on a house without having it surveyed, it will be a few hundred pound well spent.
Once an offer is accepted, a contract is drafted to transfer legal ownership from the seller to the new owner. The contract contains key details including the sale price, property boundaries, legal and planning restrictions.
There are three elements to a contract; offer, consideration and acceptance. Your signature on the contract together with the price you are willing to pay for the property is the offer and consideration. You are not in a contractual situation until your Solicitor receives copy contract returned from the Vendor’s Solicitor signed by the Vendor, which is the acceptance element. Therefore, either the Purchaser or Vendor can decide to withdraw at any stage up until that point.
4. Fixtures & Fittings
On viewing the property you may have seen items that you liked and presumed would be included with the property, however unless specified otherwise, you are purchasing the property and its fixtures only. Fixtures are items that are built in, such as the kitchen and the bathroom. Some fittings may be included in the sale, such as blinds, curtains, mirrors and furniture. Your Solicitor will share with you the fixtures and fittings list completed by the Vendor. If there is anything omitted from the list that you wish to purchase with the property, raise this with your Solicitor so they can make the relevant enquiry.
5. Joint Tenants vs Tenants in Common
If you and your partner are jointly purchasing the property there are two different ways in which you can hold Title.
Most purchase as joint tenants, which means that on the death of one of the parties the deceased persons share automatically transfers to the survivor. No one party owns an identifiable share to the property, it is held jointly.
If you purchase as tenants in common, each party will own an identifiable share of the property, which will not automatically transfer to the survivor on death. A party who owns a share in a property as a tenant in common can dispose of their share without the other persons consent.
You will need to discuss this issue with the person you are purchasing the property with and inform your Solicitor how you wish to register your Title so that they can reflect that position in the Transfer Deed.
6. Reading your Root of Title
Your solicitor will forward a copy of your Root of Title and Transfer Deed which will form the basis of your title.
You will be bound by the covenants contained therein, and so you should read the documents carefully. Covenants not to use the property as anything other than a residential home and to keep the property in good repair are fairly common. You should be aware that there may be restrictions on altering the property, painting the external walls a different colour or even keeping pets at the property without the head Landlord’s consent. There may be a service strip to the front of the property, over which you cannot build a wall or plant trees. There may be a right of way over the property. If there are any covenants that are of concern you should ask your Solicitor for further explanation.
7. Check and double check the Map
Part of the sale process will involve the ‘Title Plan’ based on the Land Registry drawing showing the general boundaries of the property.
Disputes about land boundaries can arise if there has been a misunderstanding about the Title plans and the exact boundaries of the property. So we strongly recommend the buyer review the Title plans and to advise your Solicitor if the map does not reflect what is on the ground.
Your Solicitor will probably not have attended the property and, for instance, be aware if the garden is a different shape, or if there is a driveway to the side of the property which is not noted on the map. Your Solicitor can then enquire why that portion is not within the Title furnished and seek any further Title to the garden. This important step can help avoid future boundary disputes and potential legal cases.
8. Gifted Deposit
Receiving a gifted deposit from parents to help purchase a starter home has become increasingly common in recent years.
This should be disclosed to your mortgage broker, so that the Lender is aware that you have been gifted a deposit and that will be noted within your mortgage offer. Your Solicitor will have to then prepare a Deed of Waiver for execution by the person providing the gift, to satisfy your Lender that the person disclaims any interest in the property.
9. Stamp Duty
If your property is over £125,000 you will have to pay stamp duty, at a rate dependent on the price of the property. The rate for properties between £125,000 - £250,000 is 2%. Your Solicitor will require the funds prior to completion as there is a 30 day deadline from the completion date within which to pay HMRC and so you will need to have the funds at hand before entering into contract.
10. Completion Date
At the final stage of the buying process you need to advise your Solicitor of any factors that effect when you can proceed to completion, such as you are currently in a rented accommodation and need to serve notice on your Landlord. Your Solicitor will factor this in when agreeing the completion date with the Vendor’s Solicitor. On the contracted completion date, keys will be authorised for release only when the Vendor’s Solicitor has agreed to the terms of the completion letter and safely received the completion monies. Keys are most often held at the Estate Agents or in the circumstance of a new build property, keys will be released on site by the foreman.
Getting in touch with us ........
Worthingtons Solicitors regularly act on behalf of first time buyers. Please do not hesitate to contact us on 028 90 434015 to receive a competitive quote for conveyancing services.