Even though the cost of a home continues to rise, there are still thousands of Brits out there looking to buy their first home and everyone of them does not want to waste any money on this purchase
Buying a house is an exciting – and stressful – time in our lives, which can lead to some poor decisions that cost you a lot of money. Vicky Parry, Editor at MoneyMagpie, explores the top first time buyer mistakes that could cost you thousands.
Buying at Auction
An auction might seem like a great way to get on the property ladder with a cheap house, but beware! Auction houses aren’t for the faint of heart. Very rarely, a property will come up that is in great condition but needs to move fast. Usually, auction properties need a lot of renovation work or come with other problems such as restrictive convenants or intrusive easements on the land.
When you have a bid accepted at auction, you have to pay a lot of money up front for your reservation fee. There is then a limited time to find the rest of the money. The big problem here is that most (if not all) auction properties are not mortgageable – so you need to have the full amount of cash in the bank.
Not Getting a Survey or Snag Report
If you’re getting a brand new house that’s built to your specifications, arrange a snag report with the developer as soon as you can. This helps them note any remaining issues, and leaves a paper trail for things that need to be fixed at their cost. Don’t be bullied into not getting a snag report, or being fobbed off that ‘that is how it is designed’. If you need a second opinion, get one.
If you’re buying an older house, always get a property survey. It might delay things by a week or two, but it’s vital to know exactly what you’re getting yourself into. Many people only choose the cheapest level of survey – but this can be a false economy. For example, an in-depth survey will check the roof in more detail, and could highlight significant and urgent repairs that are required at a cost of thousands.
You can use your survey report to go back to revise your offer to a lower price to reflect the issues, or ensure vital things are agreed (in writing) to be fixed before the sale date.
Only Seeing the Property Once
With property in such high demand, it’s tempting to immediately offer in a competitive market. If you fall in love with a house, you can make an offer on the first viewing. But make sure you say that it is subject to surveys.
This will give you time to come back for a second viewing and arrange for a surveyor to attend, too. You should also spend time in the area at different times of day, without needing to visit inside the house. This will help to highlight any potential problems, such as rush hour traffic gridlocked outside your front door twice a day, or a nearby school causing noise beyond that which you prefer.
If you come up against a problem that you think would be a non-negotiable for you, that can’t be changed by the vendor (such as traffic), you can rescind your offer before you exchange.
Using Estate Agent Mortgage Brokers
It is illegal for an estate agent to force you to use their in-house conveyancing solicitors or mortgage brokers – but that doesn’t stop them from pressuring you to do so. They cannot say you must use them otherwise the sale will be forfeited.
However, they may suggest that using their in-house services will be faster and cheaper. Do your research. Sometimes, it could be cheaper – but most of the time, you can find a better deal on both a conveyancing solicitor and mortgage broker if you find your own independent ones.
Cheaping Out on Conveyancing Solicitors
If you can, opt for a local conveyancing solicitor who knows the area. This will give you a huge advantage in communication, as well as giving you the ability to physically attend the office to sign paperwork, which can shave several days off the buying process.
Online conveyancing services can be much cheaper. However, you often can only communicate via email which can considerably slow down the process. It’s also hard to trust online-only companies with their reviews, whereas you can ask for personal recommendations for a local conveyancing firm.
Forgoing Land Searches in High-Risk Areas
You probably need that coal mine or chancelry search, even if you think it’s a waste of money. You can check if your new house is in a coal mining area online, which will help you decide whether to get a search. Knowing whether you have any risk of subsidence – and claim potential of such – is important. A chancelry search can help you decide whether you need chancelry indemnity on your insurance (otherwise you could be asked to repair your local church roof!).
You can also check out the flood risk of your new home online if it is in England. If it seems like your property is in a high-risk area, this signifies that you and your conveyancing solicitor should undertake more detailed searches to find out if the property has ever flooded and if flood works have been put in place since.
Not Checking Local Planning Portals
This is something many first-time buyers don’t realise they can do, but it can save a lot of headaches and even thousands of pounds. Search the local planning portal for any recently approved or submitted applications for new buildings, roads, leisure parks, or other developments that could impact your enjoyment of the house.
For example, if you’re buying a house because it has an amazing view of fields in the back garden, it’s a good idea to find out if any housing developments have been planned for those fields. Of course, it’s impossible to predict the future – but this could prevent you from making an avoidable purchase. Sometimes, developments can significantly reduce the value of a property too, which could make it much harder to sell your new house in the future.
Forgetting About Furniture
Finally, on a lighter note, we often get asked at MoneyMagpie, “Where can I get cheap furniture?”, because people have forgotten to budget for it! Moving into a house from rented accommodation means you are likely going to need to buy several large new items such as beds, mattresses, wardrobes and storage shelves.
There are lots of ways to get cheap furniture, however, which is a relief for many first-time buyers who need to save their cash for the property purchase. Start looking for bargains once your offer is accepted on the house, as that’ll give you plenty of time to pick up those last-minute bargains seen on local noticeboards, Facebook Marketplace, or apps like NextDoor. Check out our guide to furnishing your home on the cheap to get inspired!