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We’re Cameron Stephen & Co, solicitors Edinburgh and we specialise in helping First Time Buyers.
We have helped hundreds of First Time Buyers over the years.
In this Guide – the Buyers Guide- The First Steps, we explain the first steps in buying your home from the start of your search to the point where you make an offer.
It can seem a bit daunting if you have not done this before, but you will soon get the hang of it.
We hope you will find our Guide helpful.
It is important that you first know what price of property you can afford.
In this part of our Buyers Guide – The First Steps we shall explain what this involves
Unless you are rich, then like most first time buyers, you will need a mortgage (a secured loan) to help you buy your first home and which is secured over that home.
Finding out how much of a mortgage you can get is an important first step.
You will be looking initially to get a Mortgage Agreement in Principle which will give you a good idea of the maximum amount of a mortgage you would be offered.
Lenders (banks and building societies) will give you a mortgage agreement in principle based on information you provide to them about income, expenditure etc which is all then used to assess affordability and the maximum amount of a mortgage you would be offered.
Typically, first time buyers will be offered a 90% mortgage but this can vary. By that we mean 90% loan to value.
However, lenders will only carry out a detailed review of your status once you have offered successfully on a property.
It is usual that you have a mortgage agreement in principle in place at the start of your property search.
Many lenders will be able to do this in branch.
However, increasingly, first time buyers are making use of Mortgage Advisers or Mortgage Brokers to arrange this for them.
The advantages are that mortgage advisers can check the whole of the market for you to get the best mortgage for you and which best suits your circumstances. They will also be able to identify any potential issues and help you to resolve them.
There are some online mortgage brokers and they are fine, but in our experience with clients who have used them, we have found that they are more geared towards the English system. Our Scottish system is a little different and so a Scottish-based mortgage adviser will be able to give you more accurate advice and guidance.
At Cameron Stephen & Co we are lucky to have an independent Mortgage Adviser working from our office. His name is Alasdair Lowrey who works with Trinity Finance.
Alasdair will be happy to give you:
To contact Alasdair either phone him on 07568 397 052 or email him at [email protected].
You will need savings to add to the mortgage and help buy your first home.
Lenders will not give you a 100% mortgage. And since it is likely that you will have to offer more than the home report value to be successful, your savings will not only need to cover the difference between the price and the mortgage, but also the purchase costs (legal fees, registration dues and taxes).
If you haven’t already got a Lifetime ISA, then it is well worthwhile investigating getting one.
These are saving schemes which help first time buyers. Essentially the government gives you an extra 25% on top of your savings when you buy your first home.
Often, first time buyers will get a helping hand from the Bank of Mum and Dad.
These are called “Gifted Deposits”.
Most lenders are happy that these gifts are being made, but you should always disclose them to your lender.
Whilst gifts from parents and close relatives are usually acceptable, you should always check with the lender that who is going to make you a gift is acceptable to that particular lender.
It is important that this financial assistance from your parents is a gift rather than a loan.
In addition to the price, you will need to budget for the legal fees, registration dues and any LBTT (Scottish Stamp Duty).
When you ask us to give you a quote of the purchase costs, these will be given and calculated on the estimated price you give us.
However, because some of the costs (the registration dues and the LBTT) are calculated by reference to the actual purchase price, those will need to be recalculated once you have offered successfully for a property.
It is a sellers’ market at the moment in Edinburgh.
Properties coming onto the market are generally selling very quickly (coming under offer within a couple of weeks) and selling at prices which are well over the home report value.
Because of this, you are almost certainly going to have to offer for a property at a Closing Date (more about Closing Dates later) and will need to offer over the home report value to stand a reasonable chance of your offer being successful.
It is important to understand that your lender will offer you a mortgage based as a percentage of the home report value of the property not the price you offer.
So every £ you offer above the home report value that is an extra £ you will need to find from your savings.
Just as an example:
If you offer £110,000 for a property with a home report value of £100,000:
The mortgage is likely to be 90% of the value = £90,000
Your contribution to the price will be £20,000
So, you will need to bear this in mind.
Do you need some help in coming up with a Budget Planner?
That is not a problem. We can help you do this.
We shall need to ask you a few questions and then we can set out in an easy to understand way a helpful budget planner for you.
There is no extra cost for this if you are a client.
We appreciate that many of you will be working with limited budgets and so in this section of the Buyers Guide-The First Steps, we shall give you some ideas of what to look for.
Look for properties that have been on the market for a while
Although most properties are selling quickly and at prices well above their home report values, there are still some properties which get overlooked.
It is those properties which have been on the market for sale for a couple of months that you should look out for as you stand a better chance of offering successfully at around the home report value, although this cannot of course be guaranteed.
How do you find those properties?
The best way of finding those properties is to request the home report on the ESPC website. The date of the home report is usually the date of the start if marketing.
Look for properties being advertised at Fixed Price
Also, you can look for fixed price properties, although these are not common in the current market. With the ESPC website this is quite easy as one of their searches is just to show fixed price properties.
Widen your search area
It goes without saying that the price a one-bedroom flat in the New Town is going to be more than a one-bedroom flat in Leith.
So if you cannot afford a property with your preferred size of accommodation or location then be prepared to widen your search.
When you first start looking for properties you will find that most are advertised as being “offers over” or sometimes “fixed price”.
In this section of the Buyers Guide-The First Steps, we explain what these mean.
The asking price you will most often see is “offers over”.
What does that mean?
For these properties, the asking price is generally set at a few thousand pounds below the Home Report Value. This does not mean that the seller is looking for something between the asking price and the Home Report Value.
It is simply there as an indication of the asking price and invariably the seller will be looking to achieve a sale price in excess of the Home Report Value.
So, always check the Home Report Value and treat that as your starting point and expect to have to add to that.
There is more information about Home Reports later in this Guide.
You will also see that some properties are offered at a “fixed price”.
This generally means that the seller is prepared to accept an offer from a buyer at that fixed price provided the other offer conditions are acceptable.
Fixed Price properties generally come under offer quite quickly. So, if you see one that meets your criteria, then the trick is to arrange a viewing as quickly as possible and if you like the property, don’t delay but ask us to do the research on the property and make the offer as quickly as possible.
Always get a copy of the Home Report.
The Home Report will give you the following useful information about the property:
The easiest and quickest way to get a copy of the Home Report is through using the ESPC website. Alternatively, some of the estate agents’ websites will allow you to request or download the Home Report.
If you request the Home Report through the ESPC you are likely to get a follow up email from the selling agents.
This is just them doing their job for the sellers. There is no need for you to be put off by this or feel intimidated.
Keep the email as a useful reminder of the selling agents contact details or treat it as spam and delete it.
The choice is yours.
What is your purpose?
Your purpose is:
Getting information about properties online
Everyone now starts their property search online and the most well-known property website in our area is the ESPC .
The ESPC is where you will get the most information about properties in and around Edinburgh – and in particular this is where you will be able to get a copy of the Home Report most easily.
The ESPC is, of course, not the only website where you will find properties for sale in Edinburgh. Properties are also listed on other websites such as Zoopla, On the Market and Rightmove.
Each of them is similar and easy to use, although we would still recommend that you make the ESPC your first place to start searching.
What type of property are looking for?
We suggest you download the property brochure.
This will serve as a helpful reminder about the property and the floor plan as well as the photos.
It will also sometimes give you information on any extras included.
A bit more about extras etc
We are sometimes asked if all the furniture is included. This is perhaps because first-time buyers are more used to the rental market where flats come furnished or partly furnished. However, when you are buying a property the furniture is almost never included.
What you can expect to be included are the things like the carpets, fitted cupboards, light fittings and integrated kitchen appliances.
Sometimes other extras can be included or offered separately at a price to be agreed.
Arranging a Viewing
Websites such as the ESPC will give you details of the viewing arrangements for a property and these will vary.
So, to explain a little more about viewing:
Open viewings are usually Thursday evenings and/or Sunday afternoons.
Where there is and open viewing you do not need to contact the selling agent to arrange the viewing, you can simply turn up at the property at the open viewing times and you will be met by either the owners or their estate agent.
In the current market, there are likely to be many people turning up to the open viewings and so it might be difficult for you to get a chance to ask questions.
Viewings by appointment
This is where you call the selling agent and request a specific day and time for viewing.
The advantage of this is that you will probably be the only buyers with that viewing slot so you can take your time and ask questions.
Viewing Etiquette – taking photos etc
We have found that increasing numbers of viewers now wish to take their own photos and sometimes even videos using their smart phones.
Always ask the owners or estate agent for permission if you wish to do this. As you will appreciate, not everyone will want to allow you to do this.
Follow up from Selling Agents
If you view a property, you are likely to get a follow up call or email from the selling agents.
Again, they are simply doing their job and looking for your feedback about the property.
When the property market is moving quickly and properties coming under offer soon after being listed for sale, then perhaps there will not be time for a second viewing.
But, if there is time, then we do recommend that you arrange a second viewing. It is, after all, a big investment.
Get in touch with us
Either give us a call or email us with the details of the property.
Essentially, all we need is a note of the address of the property and the name of the selling agents.
We shall then have a quick look at the property brochure and home report.
In addition, we shall contact the selling agent to note your interest in the property and to ask if other buyers have noted interest and if a closing date has been set.
Noting interest is simply us contacting the selling agent and explaining that you, our client, wishes to note interest. That way the selling agents can keep a record of buyers who are looking perhaps to make an offer.
Noting interest does not require the selling agent or the seller to advise you of any other offers received or give you the chance to make an offer once an offer from another buyer has been received and accepted. It also does not require the selling agent or seller to set a closing date.
However, if there are three or more notes of interest in a property it is likely that a closing date will be set.
Reporting back to you
We shall then report back to you, usually by email, to update you and report to you on our research.
We shall also suggest whether or not it would be worthwhile making a verbal offer at this stage or wait until a closing date has been set.
It is becoming almost the norm in the current property market for a property to go to a closing date.
The Closing Date is set by the selling agent to allow all buyers who have noted their interest to submit their best and final offer. The seller will then make their decision and invariably accepts the highest offer.
We shall advise you of the Closing Date and update you on the number of notes of interest there are and then discuss with you what price you wish us to offer.
We shall then, on the day of the Closing Date, prepare and submit the offer on your behalf.
It is usual for the result of the Closing Date to be intimated later the same day and so you should know the same day whether or not your offer has been successful.
Making a Successful Offer
Once you have offered successfully for a property, we shall then move on to the next stage in the buying process which we shall explain to you at that point.
Thank you for reading our Buyers Guide – the First Steps and we hope you found something helpful.
We specialise in helping first time buyers.
If we can help you then there are a few links below to other pages on our website or you can start on the buying home page.