Top 5 common first time buyer mistakes
Published: 18/04/2016
There’s a reason why moving house is regarded as one of the most stressful things we do in our life. This anxiety is typically magnified when you’re a first time buyer so it’s understandable that they will make mistakes whilst buying their first property. So our Head of Property, Lynne McCaffrey, is here to point out the most common house buying slip ups to try and help first time buyers avoid making a costly mistake.
Property surveys
“There is a big misconception when it comes to property surveys. Buyers repeatedly confuse the lender’s valuation with a survey. A lender valuation is not a survey and often the lender doesn’t even enter the property to produce a valuation. The only reason a lender carries out a valuation is to ensure they are not lending too much. This means fundamental problems with the property could go unnoticed and leave buyers financially exposed later on.
“Surveys aren’t cheap and I can appreciate buyers looking for ways to reduce the cost of buying a house but this should not come by avoiding a survey. There are many horror stories where buyers later discover severe problems with their property and end up with a significantly higher bill than what a survey would have originally cost them. Surveys can also help buyers negotiate a reduction of the property price.
“The Royal Institute of Chartered Surveyors (RICS) offer three levels of survey:
- RICS Home Condition Report
- RICS HomeBuyer Report
- RICS Building Survey.
“An RICS Home Condition Report will show you the condition of the property and highlight any urgent defects.
“An RICS HomeBuyer Report includes all the details of the Home Condition Report as well as a market valuation, advice on defects that may affect the value of the property and ongoing maintenance advice.
“An RICS Building Survey is the most comprehensive survey as it gives you a detailed structural report and an in depth analysis of the property’s condition. This type of survey is essential for larger or older properties or if you are planning on undertaking major renovation work.
“Typically an RICS Home Condition Report is the least expensive survey. However, as the old adage goes, you get what you pay for. If you are buying a property we recommend you have at least a HomeBuyer Report.”
Insurance
“Insurance is a very important part of buying property. There are two primary types of insurance that homeowners need – buildings and contents. First time buyers often opt for one or the other but it is vital you take out both to ensure the property itself and everything in it is covered. Remember to complete the insurance questionnaire accurately and to the best of your knowledge; if you make any errors there is a chance your policy will be void and any claims you need to make invalid.
“There is also a lack of understanding as to when your insurance policy should start. Many buyers presume their policy should start once they have moved in. In actual fact you become liable for the property as soon as contracts are exchanged and therefore a buildings insurance policy should be in place from this date. Should anything happen to the property – such as fire, flood or even malicious damage – after the exchange of contracts then you will likely receive the bill.
“When it comes to contents insurance it is sensible to have cover in place as soon as you move your belongings into the property. However if, as part of the contract, the previous owner is leaving items in the property for you such as fitted appliances, it would be worth having contents insurance in place once contracts are exchanged. In some instances contents insurance can also cover items in transit.”
Property searches
“When you buy a property your conveyancer will carry out searches on the property and its surrounding area. Searches are a crucial part of the conveyancing process as they provide valuable information which could actually influence your purchase decision.
“The most common search is the local authority search. This is required by all mortgage lenders. However there are a number of other searches, such as environmental, brine and coal searches, which may be applicable to your property.
“Not all conveyancers carry out these searches as a matter of course and, if they do, they often charge you on a per search basis. This could significantly increase your conveyancing costs. At Goldsmith Williams we charge a one-off fee which covers all necessary searches. We also automatically carry out a Home Envirosearch which covers all environmental aspects of your property and the immediate areas of 500 metres. This includes flood risks which is, understandably, becoming more and more of a concern for buyers.”
Measurements
“One of the most exciting parts of buying your first property is getting new stuff for it. All of a sudden weekends are taken over with trips to retail parks for sofa shopping and dining table decisions. However amid all this excitement first time buyers are often unaware of the restrictions of their new home.
“About a third don’t measure the size of the room before buying furniture. There are also often problems with getting the items into the house; doors and even windows having to be removed and, in some cases, the property is actually damaged.”
Owning a property together
If you are buying a property with someone you need to think about how you wish to hold the property; as joint tenants or tenants in common. It is essential that you hold the property in a way that best suits your circumstance in order to avoid a potentially complex legal situation. This is a very important decision as the way in which you co-own property may have implications for couples who separate, family or friends who pool resources to buy property together and even married couples wanting to minimise inheritance tax liability.
“As joint tenants you both own the property equally whilst as tenants in common you each own a specific share of the property.”
For more information about owning a property together, download our free brochure.
If you’re buying a property, you can get a free online quote for our conveyancing service
Content correct at time of publication