Buying Your First Property? Check Out This Step By Step Guide
The purchase of the first property is probably one of the most important milestones in a person's life. It is undoubtedly an exciting stepping stone into adulthood and independence and although the process is inevitably stressful, it does not have to be complicated. Here is a brief but comprehensive guide through the process of buying that special first home.
The first and probably the most important step which many seem to overlook is an initial visit to the bank of their choice. It is important for the buyers to establish a budget they have to work with from the get-go, before proceeding to viewing properties. This allows buyers to direct their attention to properties they can afford, whilst allowing them to put in an offer immediately on properties they fall in love with, with less of a risk of losing it to other potential buyers. Prospective buyers should also have 10% of the total value allocated by the bank saved up as a deposit, which will be left at the notary (or taken by the vendor) during the promise of sale, as a means of securing the deal. The bank also usually finances 90% of the total value of the property, unless otherwise requested in certain circumstances. A visit to the bank is also important as very often buyers are unaware that certain situations may affect their lending power, such as personal and/ or car loans, age, and a number of other factors which maybe not have been taken into consideration, so visiting the bank is a crucial first step.
Once a comfortable budget is established by the bank, the buyers can proceed to look for the property that fits their wants and needs. Usually the first choice is to decide on location, be it central, north or south. It is always suggested to keep an open mind with regards to area, as occasionally the best opportunities crop up in the least expected places, as some areas may provide what I like to call 'more bang for your buck'. The desired location reflects very much on the personality of the buyer/s; so whether they enjoy the hustle and bustle of city life, or the peace and quiet of the countryside, one can start to narrow down the possibilities.
At this stage buyers should also establish what kind of property suits their needs best, as well as what's affordable. Recognizing what kind of property would be best suited for their lifestyle, will also help narrow the search and make finding the right property easier and quicker. Therefore, deciding on type of property, number of bedrooms, what kind/ size of outdoor space, level of finish etc, are important.
Once an area/s and type of property have been decided upon, buyers can start to shop around! This is where the fun starts. The first few properties usually help give to give buyers a feel of what they are really looking for. First time buyers very often make the mistake of viewing too many properties. Although this seems counter productive, from experience I can say that viewing too many properties in the hope of finding something better, very often ends in disaster, and buyers get stuck in a never ending loop of viewing properties, and never buying. My advice is, if you like it and it ticks all your boxes, just go for it!
Once you've fallen in love with a property, it's time to take the next step. And this is where buyers need to act fast. If it's a super property, chances are it will sell quick, so if the buyers want to put in an offer, they should book an appointment with a notary of their choice, and put in the offer as quickly as possible. Once the offer has been accepted, the next step is to sign the preliminary agreement, so as to secure the property.
A preliminary agreement (promise of sale/ konvenju) is signed by both buyers and sellers, in front of the notary appointed by the buyers, and states the terms and conditions the sale is subject to. For first time buyers, the sale is almost always subject to a bank loan.
The promise of sale also always includes the terms and conditions of the block (should the buyers be purchasing an apartment within a complex), the duration of the agreement, the price agreed and other details pertaining to the sale.
With regards to the bank loan, six to twelve weeks are usually allocated to the buyers to visit the bank of their choice and obtain a bank loan (sanction letter). Once this letter has been issued before the stipulated time is up, the notary is usually in a position to start the required researches to finalize the sale. Other documentation required by the bank and notary include Land Registry plans and Eight Schedule, both of which are provided by the architect appointed by the buyers.
Should all be in place and no issues arise from the researches, the notary will be in a position to submit the file to the bank, allowing the banks legal office to recheck the researches. Once they have been cleared, a date is set for the signing of the final deed. This can take a few weeks, so it's important for the buyers to keep in touch with the notary and the vendor to make sure no extensions to the promise of sale are needed.
The day of the final deed is the day buyers become new homeowners! It's an exciting day in which the buyers and vendors sign the contract and receive the keys to their property. At this stage can start shopping around for whatever is needed to finish and furnish the property. Some buyers prefer to start certain finishing works, such as bathrooms, and ordering furniture whilst the property is on promise of sale. Although this speeds the process up, it is not usually suggested, and it is always safer to wait until the final deed is signed to avoid any unnecessary complications and expenses.
As made clear above, the process of buying that special first property does not need to be complicated. Working with a real estate agent you know and trust will help make the process smoother, as well as having an efficient notary who is easy to communicate with. Should any first time buyers be reading this and require any help or guidance, I can be contacted on 79301088.
Happy Home Hunting!
Article photo courtesy of Karolina Grabowska from Pexels