Buying A House As First-Time Buyers - Part 1

Friday 3 July 2020
Buying a house as first time buyers

Well, hello! It's been an age since I last looked at or posted on my blog, but I'm glad that I've kept it up & running because I want to share about our experience of buying a house as first-time buyers. It has been an experience, to put it lightly!

Our journey to buy a house started in Feb/March of 2019. Our wedding was booked for October 2019 & we wanted to time things right so that we wouldn't have a house too early - we couldn't afford mortgage payments on top of paying off the wedding! Ideally, in our minds, we would get the keys for our home mid-September, giving us a few weeks to get the house set up & buy furniture, before moving in together after the wedding. This meant that we didn't start really looking at potential houses until April, for fear of the sale completing too early!

Looking back, we were far, far too optimistic! 8 months after our wedding & I'm sitting in my parents house wishing we had completed too early!

Buying A House As First-Time Buyers

First Things First - Advice!

The first thing we did back at the start of 2019 was book in with a mortgage advisor. The job I was in at the time was near enough minimum wage & David is a community youth worker, a sector that relies on funding being renewed every few years. We weren't sure we could even be approved for a mortgage, so it was really helpful to go to a mortgage advisor for some advice & direction before we really started looking. 

Our mortgage advisor has been amazing throughout the whole process & reassured us that we should have no problems applying for a mortgage - at the time, she told us that banks were becoming more lenient to those on temporary or 0-hour contracts & recognising that this is how a lot of people are now employed. Unfortunately, Coronavirus has vastly changed the landscape of houses & mortgages, but we'll get to that later.

Anyway, we were confident in our ability to buy a house! We had a deposit, our mortgage advisor gave us the go-ahead after looking through our payslips & bank statements, and so we started looking at houses.

Viewing Houses

We have looked at So. Many. Houses. I honestly couldn't even count them all. That's mainly our fault, because we hadn't narrowed down which area we wanted to live in, so we went to see any house within our budget that we liked the look of. Now we have a better idea of where we would like to live & a definite idea of where we absolutely do not want to live, which makes life a hundred times easier!

We both find viewing houses a super awkward experience! Going into someone else's home, obviously judging whether or not we like it enough to buy, trying not to show if we really don't like it, remembering to ask relevant questions & trying to remember that they might sugarcoat answers because they obviously want to sell their house. It's a lot to process! We are both quite awkward people in general though, so maybe it's just us! We defintely prefer viewings where the estate agent is showing us round the home, I don't know why there's a difference but it feels a lot less invasive than with the actual homeowner.

House No. 1

In mid-May we finally viewed a property that we really liked, in an area that we were really keen to live in! The owners were semi-retired & spent most of the year abroad, so they had bought this house as a project. It was fully redecorated, with new carpets, flooring, kitchen & bathroom. Everything was grey & white, which meant it was bare, a good base ready for us to redecorate however we wanted! 

We spoke to our mortgage advisor, asked around our friends for a solicitor recommendation & got in contact with them as well, then called the estate agent & put an offer in on the property. We went in at £2,500 less than the asking price & the offer was accepted! Yay, celebrations, right?! Not exactly...

As part of the mortgage application, the bank sends someone out to do a Valuation Survey, to make sure that the house you are trying to buy is worth the mortgage you have applied for. Unfortunately, the Valuation report concluded that the house was worth £5k less than what we had offered! Which also means, it was valued at £7.5k less than the original asking price! 

Now, we are first time buyers & obviously don't really have a lot of knowledge of the housing market BUT if a bank is telling you that a house isn't worth what you are paying for, you listen to the bank, right?

We went back to the estate agent, explained what had happened & also emailed them a copy of the report from the bank. We asked them to speak with the owners to see if they would lower the price to the banks valuation. If we had the extra £5k spare, we could have used that to make up the difference between the offer & the mortgage, but there's two reasons why we didn't do that. Firstly, we didn't have any extra savings for the deposit, nevermind £5k & secondly, the bank was telling us it's not worth that cost - why would we pay it? Does that not lead to negative equity? Another thing I know little to nothing about but we didn't want to risk it!

Anyway, the owners came back with a straight-up no. They didn't want to lower the price at all, not even an offer to meet in the middle. On one hand, I understood where they were coming from - I don't know how much they bought the property for or how much money they put into it. Maybe lowering the price meant they weren't making any profit on the house? On the other hand, the liklihood was that if one bank has valued the house at £7.5k less than the asking price, others are going to do the same and the cycle would continue.

We ended up pulling our offer out, hoping that they would come back with the lowered amount, but sadly they never did! The house stayed on the market for a good few months after that & they eventually lowered the asking price a bit, but it was still more than what the bank had valued it. It was eventually taken off PropertyPal & I never saw whether it was sold or just removed!

House No. 2

After we pulled our offer on the first house, we went back to PropertyPal & booking viewings. It was so frustrating watching the original house just sit on the market, knowing that we were keen to buy it if they would just go by what the bank had valued! But we ended up realising that the house wasn't as great as we had first thought - sure, it would be easily redecorated & was a good shell but there was nothing special about it. We were blindsided by the new kitchen, but in reality it was quite a small space.

We eventually found another house that we really liked, in a similar area with a similar asking price, except this house had an extension & utilty space, as well as a new bathroom with a separate bath & shower! We loved it! We put an offer in on this house, pretty much the same as the first offer, £2.5k less than the asking price, & the owners accepted!

That was back at the end of August & our wedding was creeping closer & closer. We came to terms with the fact that we wouldn't be in before the wedding, holding on to hope that it would only be a week or 2 after we came back from our honeymoon. We had an proposed completion date for the end of November, which wasn't too bad, it was only 3ish-weeks after our honeymoon.

A few days after we got home, we went out for a browse at some furniture & ending up buying our bed & mattress thinking that we could get it delivered for the day after we moved in.

*Pro-tip - Never buy large furniture until you have house keys in your hand, no matter how optimistic you are! The delivery company have been so good, but it's not worth the hassle or the risk! They still have our bed!

The First Delay

The week of the proposed completion date & our solicitor hadn't heard anything from the other solicitor about the move going ahead or an exchange of contracts. It got down to about 2/3 days before we were supposed to move, when the solicitor finally got in touch to say that there was a problem with the house that the owners were buying & they've had to pull out! Great.

And so we're back to square one. They had another house that they were interested in and they got an offer accepted straight away, but the whole process was back to the start again. We were told that, all being well, we could move at the end of January 2020.

Spoiler Alert: It's now July & we still don't have a house!

There have been so many delays with their house, something to do with a boundary issue that has taken an absurb amount of time to resolve! We were reassured again & again that we would be moved in by April, when our extended mortgage offer would expire, and then Coronavirus happened.

The Second Delay & Coronavirus

Coronavirus, understandably, stopped any and all progress on our house buy. 

Lockdown obviously made moving impossible, but we assumed that the other issues could still be resolved by working from home, but our solicitor struggled for over a month to get in touch with the owners solicitor, before finding out that their solicitor had actually been furloughed & the office branch he worked from had been closed since the beginning of lockdown. Why was there never any communication about that? An out of office email, a voicemail message, anything? Dear only knows!

Anyway, because this sale had dragged on since August, our mortgage offer expired during lockdown. Mortgage offers typically last 6 months, so at the end of January we applied for an extension of 3 months, which then expired in April. In order to reinstate the mortgage offer, the bank we were with needed to do a revaluation of the property because so much time had passed. 

Obviously, as our luck would have it, the bank downvalued the house by £10k. As it was a "desktop survey" (because no in-person valuations were allowed) there was no physical report to go alongside the downvaluation which caused a whole host of problems. The estate agent just couldn't understand why there was a reduction of that amount when nothing had changed with the house, even though almost a year has passed since the first valuation & hello? Coronavirus? Things are obviously going to change!

I feel for the owners of the property, because they will need the money from the sale of their current house in order to buy their new house, but we couldn't ignore what the bank said. We don't want to pay more for a house than what it's worth, and is that deja vu? I feel like this has happened to us before...

What Happens Now?

As we stand, I've literally just had a phonecall today from the estate agents basically saying that the owners aren't happy to lower the amount, which is super disappointing & frustrating for us but fair enough I guess. They have put their house back on the market and, yet again, we are back to square one!

We had a feeling this might happen anyway, so over the last week or so, we have been to see a few different houses now that viewings are allowed again. As of yet, we haven't seen anything that we want to put an offer in on, but it's good for us to get back in the way of viewing house & to keep an eye on what's available at the minute.

The next hurdle we face thanks to Coronavirus, is that the banks have pulled a lot of their mortgage deals off the market. There are literally one or two 10% deposit deals available, but they are now mostly wanting deposits of 15%, 20% or even higher! Thankfully, we have been able to save a good bit over the last few months, so we will hopefully be able to get one of the 10% deposit mortgages - if we can't & have to get a 15% mortgage then it might be a year or two before we can afford to buy at all! Let's pray that's not the case though!

Here's To Part 2!

If you made it through all of my rambling - well done! Hopefully Part 2 is on the not-too-distant horizon, & has some good news in it!

I just wanted to write it all down so that when we do finally have our own home we can look back and laugh (someday, hopefully, we can laugh!) at the mess this process has been! 

I also think it's good to share this sort of thing. We thought that buying a house as first time buyers automatically made the process easier because we had no chain, but we've learnt that that's not always the case! Sometimes you can get lucky & have a really smooth, easy process but I wanted to share our experience. It could be that we have extremely bad luck, but I know when I read other peoples experiences it's good to know that not everyone sails through their first home buying experience!

If you've bought a house recently, how was your experience? 
Let me know in the comments!

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