So far in our series of property development top tips, we’ve covered planning, architecture, interior design and self build. Today we’re turning our attention to buying a home, particularly if you’re a first time buyer.
There are a million and one things to think about when buying a home – they don’t say it’s one of the most stressful things in life for no reason! Here are seven pearls of wisdom to help you if it’s your first time.
1. What can you afford?
Before you even start looking on Rightmove or Zoopla, you need to work out what you can afford. We suggest that you speak to a recommended independent mortgage advisor regarding your personal circumstances and get professional advice.
Mortgage companies will stress test your income to ensure you can cover the payments. Therefore, you need realistic advice on what your deposit and mortgage amount will allow you to buy – and don’t start viewing properties until you know this! You don’t want to fall in love with a property that you can’t afford because then nothing else will compare to it.
And don’t forget, you’ll also need to consider the additional costs of buying a home. From surveys to conveyancing to removals to insurances to stamp duty and so forth, the cost of buying a home isn’t cheap so you need to ensure you have money set aside for this, aside from your deposit.
You also need to check you can cover the repayments without sacrificing too much. Obviously buying a home is a huge step in responsibility, but don’t just take the maximum mortgage you may be offered if it means you have nothing left to enjoy the things you like to do. You need to live, too.
2. What’s your credit score like?
If you’re buying a home, you’ll want to be familiar with your credit score so make sure you check yours out. If it’s in good health, then great. If it needs improvements, then that’s ok too – you can research ways to improve it, the important thing is to know what state it’s in so that you can act on it.
Sometimes there are errors on your credit file that you can apply to have removed so it’s important that you check to spot potential errors and keep on top of it.
3. Location, location, *open mind*
The age old cliché in property is location, location, location. But what tends to go hand in hand with that is expensive, expensive, expensive. It’s simple market theory: when something is desirable, it means the demand is high and when the demand is high, the price is pushed up.
If you have a lot of funds then this isn’t really a problem, but if you’re a first time buyer, chances are you need a bit of bang for your buck. Therefore, you need to be a little savvy.
If you can keep an open mind on location, then you could make some good money on your property. Research areas which have approved plans for development, are in good proximity to other desirable areas or communication links, and are showing signs of investment (such as little trendy shops or cafes appearing).
If you can get ahead of the curve with buying in an up-and-coming area, you’re likely benefit from better capital appreciation performance in the long run.
4. View properties multiple times
Once you’ve started viewing houses, if you find one you like, you should view it at least twice more at different times of the day. For example, the neighbours may not be in until the evening and that may be when they like to play their music very loudly. If you only view the property in the morning, then you wouldn’t find this out.
Viewing the property during different weather conditions is also useful – if it’s been raining then you’re more likely to notice if there’s a leak so you can get a feel for any repairs the property is likely to need.
5. Take a checklist, take your time
Estate agents should allow 30 minutes for you to view a property so take your time and don’t rush. There’s a lot to think about when you’re viewing a property so take a checklist with you to prompt to you to look for things. This is a particularly good one from Rightmove in their home buyer’s section.
You want to check the taps are working correctly, the toilets flush, the windows open and shut, the doors open and shut, there isn’t damp behind any furniture or curtains, there aren’t any stains on the ceiling, the chimney stack looks solid… the list goes on. Taking a checklist will prompt you and help you formulate your offer if you spot any repairs that are required.
6. Consider resale value
No matter how much you fall in love with a property, it will have a ceiling value due to its location. You should call a three estate agents – the independent ones in particular have their fingers on the pulse – to ask for their opinion of ceiling values in the street, and take an average figure.
Then, when thinking about how much you’ll pay for it, take into consideration the cost of any works the property requires as per tip number 5. If this exceeds the ceiling value for the property, you should really consider whether you should go ahead with it.
As much as the property may seem perfect after you bought it and spent the money to get it how you’d want it, any change in financial circumstances could risk you loosing money or being stuck with the property if you’ve overpaid for. Being able to sell or leave a property is essential so as hard as it is, don’t let your heart rule your head in this case.
7. Look beyond décor or staging
At one end of the spectrum, you can view houses that are ghastly, cluttered and outdated, and at the other end of the spectrum you’ll view houses which have every inch planned to trick you into falling in love with the lifestyle they’ve presented. In both situations, you need to learn to look past this.
Once you’ve viewed a property, go through the dimensions and plan how you would use the space:
- How would you use the reception rooms?
- How would you use the bedrooms?
- Would all of your furniture fit?
- Do you have lots of space left over?
- Could a lick of paint, new flooring and a good clean make all the difference?
- Or if you take out all of the furniture and décor, is what you are left with a bit underwhelming?
Being pragmatic in your search for your home could help you pick up a gem as a lot of people struggle to see past the cosmetic needs of older, less loved property or are quick to fall in love with show homes, which are often over priced.
Next week will be our last in this series of top tips. We will be sharing our advice on investing in property. In the meantime, if you were buying your first home again, what would you say to yourself? Please let us know in the comments below.