Planning a wedding and purchasing your first proper home together often go side by side, and both can be quite stressful undertakings requiring careful research, planning and budgeting! As with your wedding, the last thing you want is to feel that you have overpaid!
So use these tips, tailor-made for a first-time home buyer, and you’ll be well on your way to closing a deal, at a great price.
The First time Home Buyer’s Guide on Finding the Best Deal
Decide On Your Budget
Before you do anything else, figure out what is the maximum purchase price that you are comfortable with. This will save you wasting time chasing after properties that you later realize you can’t afford. If you’re going to require a mortgage, make an appointment with a local bank and find out what they are willing to lend you, and whether or not you’ll go for a variable or fixed rate.
No matter what you choose, make sure the rate is as cheap as you can get. If you want to spread the cost and leave some additional cash for redoration, a mortgage with a low deposit could be what you need. These have been scarce in recent years, but they are available morebroadly. For example, Clydesdale are offering a 5% deposit for first time buyers.
What Do You Want to Buy?
It seems such an obvious question, but it’s an important one that often gets overlooked in the search for finance. Do you want a detached home, a city apartment, a countryside retreat? Are you looking for a home that’s also an investment? What size of living space do you require?
You’ve got to ask yourself what it is you want and where you would like to live. Be realistic. A £150,000 budget isn’t going to get much in central London, but it’ll get you much farther in a regional city. It’s hard to accept compromise on something like your home, but in today’s market, that’s what you have to do.
Research the Local Market
Don’t just jump in and start bidding. This is the worst thing that a first-time home buyer can do. You have to be patient, and take your time evaluating the current market. Now that you know what you want to buy, and what your budget is, work out what those kinds of properties are selling for.
It’s not good enough to merely look at ads, you have to get your feet on the ground and actually look at a few properties with your own eyes. You’ll see nuances in the available properties, and correlate that to the selling prices in ways you’d never be able to if you hadn’t seen properties in person.
There are certain kinds of properties that are more likely to be acquired at a bargain compared to others. Look for sellers in a rush to sell their property – they are more likely to offer a deal in their haste to get a deal done. Look for properties that are structurally sound, but need a lot of cosmetic improvements (i.e. improvements that are inexpensive to do, but may turn off other buyers who can’t see past the possibly ugly first impression) – sellers of these properties will have less choice in buyers, and often have to lower their price as a result.
Buy in the off-season – spring is often one of the best times of year for sellers, since there are usually lots of willing buyers to choose from. On the other hand, the cold of winter often cools the market down – you can use this to advantage and see if you can find a deal as a result.
Now that you know exactly what a normal selling price is for the kind of property that you’re looking for, you’ll also be able to recognise a good deal when you see it. Gazumping is back. Be sure to move fast when you see a good deal – you’re unlikely to be the only one who noticed that property, and if you take your time about making an offer, the seller may sell it to someone else.
Since there is likely to be more competition on a truly good deal, make sure your offer is attractive to the seller. Have your financing (if required) pre-approved by your bank, and consider making a generous deposit on the property to show that you’re serious about closing the deal.
Once you’ve finalised the deal, be sure to set aside some time to relax and enjoy the fruits of your labour. It’s not easy looking for a great deal, but the money you save makes it well worth it.
With these great tips you’ll also find you have more time to plan your dream wedding and honeymoon too!