It can be incredibly daunting to think about buying your first home. For most of us, it’s the single biggest purchase we’ll have ever made, and there are so many steps to take that it’s easy to keep putting it off. The good news is that there are ways to spend less on that first home.
While these cost-cutting tips can help lighten the financial load, they aren’t going to free up massive amounts of cash in one go. Combining these tips though could lead to some fantastic savings that you otherwise wouldn’t have expected. So if you’re hoping to spend less on your first home, here’s what you need to know.
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Plan Your Budget
Even before you start browsing property websites looking for your dream home, it’s wise to work out your budget first. The total you can spend on your first home comfortably may not match the best mortgage you’ll get approved for. Take the time to work out your cash flow, including all of your current expenses.
There are many home affordability calculators available online, and they can be handy for working out what your price range really is. A consistently cited rule of thumb is not spending over 28% of your monthly income on costs related to your home and 36% on your combined debts, including your mortgage repayments and any other loans. However, you don’t have to stick to this rule. Think carefully about repayments and what you can justify paying out in the years ahead.
Learn from the Survey
When you find the home that you want to buy, you’re going to need to have a property survey carried out by a certified surveyor. They will examine the property, looking for faults that you will need to resolve. If your surveyor hands you a list of faults, don’t panic too much. In most cases, those faults will be minor, but you could ask for a lower price if serious work needs to be done. Also if you’re buying or building your property, you’ll be in need of an elevation certificate. The elevation certificate surveyor will come to your property, analyze it and provide you a new or updated certificate.
If there are problems with the house’s foundations, for example, then you know that could lead to costly fixes. Serious issues can make you pull out of buying a home, but in some cases, they can be the cause of big savings. If serious repairs are needed, you can justifiably negotiate on the asking price. That could end up saving you a lot of money, depending on the severity of the issues.
Improve Your Credit Score
If you take the time to build a better credit score, you’ll have access to much better mortgage deals. With a better mortgage, you could get much lower repayments and interest rates, and that’s great news for your long term cash flow.
You might not feel the savings immediately as you’ll still be handing over a substantial amount of cash. But in the long-term, getting a getter mortgage agreement is always going to be a money-saver. Over the years, those lower repayments could dramatically improve your quality of life. So taking some time to boost your credit score is always worthwhile before you start looking closer at mortgages.
Conveyancing Tips
Your estate agent will likely recommend a conveyancer to you, but be wary of going with their recommendation without making some comparisons first. Estate agents will often get a commission if you go with their recommended conveyancer, so their advice is usually not impartial. So the first conveyancing tip is to do your research before deciding who to go with.
The second tip is to get your conveyancing solicitor involved as early in the process as possible. Most people wait until they’ve made an offer on a property and it’s been accepted before they get in touch with a conveyancer. This can slow down the process of buying your first home, which inevitably adds to the spending that you’ll do.
Finally, choose a conveyancing solicitor who works on a no-sale-no-fee basis. Should the purchase of your first home fall through for any reason, you won’t have to pay their legal fees and will only have to pay a bill for any disbursements they’ve paid out to third parties on your behalf.
Don’t Get Gazumped
If you make an offer on a home and it gets accepted by the seller, always ask the estate agent to remove it from their listings. If other estate agents list the property, ask them to remove it too. If the property stays listed as being for sale, then your chances of getting gazumped will be much higher.
Gazumping is when someone else pops up at the last minute with a higher offer than the one you’ve made. And since no contracts will have been exchanged at this point, the seller is well within their rights (even if it’s a little rude) to accept that offer. This can quickly end up in a bidding war, which will always end up with you spending more.
Don’t Be Scared to Haggle
The asking price is simply what the seller hopes they can get. If you look at property prices in the area that you want to buy, you’ll get a better picture of what a fair price might be. If you see that the home you want to buy is ridiculously overpriced, then making a much lower offer is always a good idea and could lead to massive savings.
Even if the listed price does seem fair, there’s always going to be some wiggle room. Make an offer somewhere between 5% and 10% of the current asking price. This is standard and won’t frustrate the seller, while unreasonable offers could easily alienate them.
That 10% lower offer can also work on new builds, and some developers are keen on giving out discounts. Even if your negotiating doesn’t get you a lower price, you might walk away with extra parking, or even a furnishings pack that will help save money when it comes to moving-in day.
Spend Less on Your First Home
While very few of these ideas will save you a fortune, they do start to add up. When the cost of buying property is so high (and seemingly always rising), finding smart ways to cut the costs is always a good idea. By far the biggest mistake first time buyers make is rushing everything through as quickly as possible, which guarantees overspending.
Take the time to do your research, compare the services you’ll need to use, and always look out for where you can cut your spending. The key is to be responsive, avoiding delays that can quickly lead to spending increases. Get your planning right and you could have the keys to your new home faster while also having a little extra cash in your pocket.
Read also: Expert Tips to Find and Buy The Right Home