People Who Can Help First-time Home Buyers
First-time home buyers don't have to pay fees to an estate agent, but there are other professionals you will have to work with.
There are many professionals involved in buying a property, some that you are legally obliged to hire and others you are not. Who to choose, how to choose them and how much will they cost?
As a first-time buyer you don’t have to pay any fees to estate agents (it’s sellers who do), but you’ll most likely deal with one because the majority of sellers appoint an agent to sell their home. High street estate agents take a percentage commission of any sale, so they are financially incentivised to sell the property. Online agents tend to charge a flat fee, and sellers conduct viewings.
To help in your search for a home, you can register with several agents operating in the area where you’re looking to buy. Check they are a member of bodies such as the Property Ombudsman and the Property Redress Scheme, which offers recourse if you are unhappy about the way they deal with you or the seller.
Registering with an agent means they can alert you when a home they think you might be interested in comes on to their books.
Once your offer has been accepted, you have to give the estate agent details of your conveyancing solicitor, which means it is usually worth finding one before you start your home search. Conveyancing is the legal term for transferring ownership of property, and conveyancers are lawyers or legal experts that specialise in property sales and will guide you through the process to completion, draw up paperwork, carry out local authority searches, deal with the Land Registry and transfer money to the buyer’s solicitor on exchange and completion.
Expect to pay conveyancing fees between £850 to £1,500, including VAT, according to the Money Advice Service. You will also have to pay another £300 or so for local authority searches and a small fee (in the region of £50) for transfer of the mortgage to your solicitor.
Get a number of different quotes and expect to be told the full price up front. The Law Society also suggests you ask whether fees will be charged if the sale falls through.
Having a reliable solicitor who is easy to get hold of will make a big difference in the often-stressful process of getting a property through to completion. Recommendations from friends and family may work for you, and the Law Society have a tool to find conveyancers in your area.
Your mortgage will probably be your biggest monthly outgoing for years to come, and choosing the right one can save you thousands of pounds over its term. This is not straightforward, though — there are many different types of mortgages, with varied fees and costs attached.
As a first-time buyer you might find it helpful to have someone else guide you through what’s available and what you will be eligible to borrow, and to hurry the application process through with your lender. This is where mortgage brokers — advisers with specialist knowledge of the mortgage market — come in. You are under no obligation to appoint a mortgage broker, but you might find one helpful.
How much a mortgage broker costs will vary: they may charge a fee, or they may offer their services free but all take a commission from the lender. Look for a broker who is regulated by the Financial Conduct Authority.
» MORE: Do I need a mortgage adviser?
Choose your lender carefully, based not on who you’ve banked with before, but on what deals they are offering, interest rates and fees on the mortgages they have, and whether you meet their lending criteria. It is a good idea before you even start house hunting to have a mortgage in principle as a non-binding agreement of how much you can borrow based on your income and outgoings.
How much you pay in arrangement fees for a mortgage depends on your deal. Some of the cheapest rates may carry the highest fees, while fee-free deals may charge more in interest. This means it’s important to compare the total cost of your mortgage, rather than just focusing on the interest rate to get the best value.
All lenders will carry out a mortgage valuation survey, but this is for the benefit of the bank, not the buyer. It is sensible to get your own survey done by a chartered surveyor, to check for any defects or structural problems.
There are various surveys, from basic to very comprehensive, you could ask your surveyor for their professional opinion on what kind of survey you need based on the age or condition of the property you are buying.
The Royal Institution of Chartered Surveys has an online tool to help you find a surveyor. Its simplest survey is a RICS Condition Report; its most comprehensive, the RICS Building Survey. Another option is the Residential Property Survey Association, which offers a home condition survey or buildings survey. Expect to pay from about £400 for the most basic RICS survey up to £1,500 for the deepest.
» MORE: All about homebuyers surveys
The cheapest quote is not always an indicator of quality, however, so shop around and ask the surveyor what their quote includes. It can also be helpful to ask friends and family in the area for their recommendations.
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Laura is a journalist and author, writing about money since 2008. Including writing for The Times for 9 years. She believes finance doesn't need to be complicated. Author of Money: a user's guide. Read more