These are the most common mistakes made by first-time buyers
PUBLISHED: 13:00 29 September 2017 | UPDATED: 14:11 29 September 2017
While picking a house and moving in may sound like a simple task, it is very common for first-time buyers to rush the process and make lots of easily avoided mistakes along the way - some of which can end up costing them a lot more money in the long run.
To help first-time buyers avoid this, Elliot Castle, founder of home-buying service Webuyanyhome.com, reveals the common mistakes that first-time buyers make, and how they can be prevented.
Avoiding a house survey
Many first-time buyers make the mistake of skipping a proper property inspection. This is usually because they are not willing to pay for a survey or have fallen in love with the property so much that they are in a rush to seal the deal and move in.
Although it may not seem like a priority at the time, everyone should arrange for a professional survey to take place before they complete on a property, even if the property is brand new. It might look great on the outside, but there could be a possibility that the property has underlying structural issues that you cannot see, such as rotting floor under the carpets, rising damp or a leaking roof - which will all end up costing you more money in the long run.
First-time buyers can find out if their property has any of these problems in advance by paying for a survey. These don’t take long, and are really worth having as the buyer will then be in a good position to ask the seller to fix any problems or lower the price to accommodate the additional costs and, ultimately, avoid any nasty surprises once they have signed the contract!
Not carrying out enough research
Before making an offer, it’s important for first-time buyers to do their homework and spend some time researching the property and other similar properties in the local area – as this will help them to decide on the best offer they can make.
It’s important to consider buyer-demand in the area, by using property websites to investigate the going rate for houses nearby and see how much they are selling for. Also look at the current competition, and how the housing marketing is performing in the area at the time. If properties are moving slowly and going below the asking price, then they will be in a stronger position to negotiate.
Not asking enough questions
So many first-time buyers fall in love with a property and rush to make an offer so that they can ‘seal the deal’. A quick sale is always great - but if the buyers take some time to ask questions about the property, they may find that they are able to agree on a better deal and save money.
I always encourage first-time buyers to ask their estate agent lots of questions about the seller. For example, how long have they lived in the property for? How long have they been trying to sell the property for? What is their motivation for moving? When are they hoping to move out? This information will help them to tailor their buying strategy if they decide to make an offer. For example, if the seller is in a hurry to sell or has been trying to sell for a long time, they may be willing to accept a lower offer to make a quick sale.
Most first-time buyers feel nervous or uncomfortable negotiating on a price for their dream property. Because of this, they may end up paying more than they need to for the property – which they will come to regret later down the line.
As a first-time buyer, you aren’t locked in a chain, which makes you very appealing to sellers. This puts you in a strong position when negotiating. Once you have decided on a final offer, don’t be afraid to be firm. A great tip is to put a 24-hour expiry on your final offer, as this will show the seller that you won’t be pushed any further. If they are in a desperate position and have been trying to sell the property for a while, then there is a high chance they will accept!
Underestimating total costs
While saving for a deposit and securing a mortgage is one of the most important steps towards owning a home, many first-time buyers forget to consider the additional costs they can incur once the sale is complete.
Building insurance, ground rent, maintenance, council tax, parking fees, internet and WIFI charges, utility bills, a TV license; these are just some examples of the many costs that will start to rack up once you become the legal owner of a property.
Before you make an offer on a property, put aside some time to work out approximately how much these bills and charges will equate to - and make sure that you will be able to foot the bill when it arrives each month!
Misjudging the timing
I often hear stories of first-time buyers who have moved out of their rented property, and in with family, or ordered a brand-new corner sofa and matching coffee table, thinking they will be moving into their new home very soon – but then the property sale is delayed and they are stuck.
When it comes to buying a home, every experience is unique. For some first-time buyers, the process will run very smoothly and take only a couple of months. For others, unexpected circumstances will arise and slow things down – meaning that the process could take several months or more.
The most common reason for a property sale to be delayed is due to a disruption to the ‘property chain’. A chain is made up of a sequence of linked purchases, each of which is usually dependent on the buying and selling of the other properties in the chain. So, for example, there could be a chain of two or three homeowners connected to the person who is selling the home you want to buy. If any of these homeowners pulls out, it will disrupt the chain and, thus, delay the sale until your seller has found a new property to buy or move into.
First-time buyers shouldn’t rush to move out of their existing home, or buy furniture for their new home, until contracts have been exchanged and a completion date has been set. Only then can they be absolutely certain that the property is theirs, and make suitable arrangements without the threat of disruption.
Not getting a pre-approved mortgage
Buying your first property is a very exciting milestone, so it’s understandable that so many buyers want to start searching for their dream property as soon as they have saved enough for a deposit.
Although it’s good to be proactive, it is very common for buyers to start looking at properties within a certain price bracket – only to find out later down the line that they cannot borrow as much money as they thought from the bank.
First-time buyers can avoid this disappointment by contacting their chosen mortgage lender as soon as they have saved their deposit and asking for a ‘mortgage in principle’. This is a certificate or statement from a lender to say that ‘in principle’ they would lend a certain amount to the prospective borrower based on some basic information. This is just a temporary offer and could be subject to change, but at least it gives you an idea of the price range that you fall into.
The last thing you want is to sign a contract for a home to then discover that that the bank or building society will not lend you as much as you hoped!
Elliot is the founder and CEO of We Buy Any Home. Visit www.webuyanyhome.com for more details.