First time buyers - Dos and Don’ts - 1 April 2008

By Eric Salaϋn, Conveyancer, Voisin

The property market can be a daunting place for first time buyers. With the rising costs of property in Jersey, getting that first foot on the ladder is becoming increasingly difficult and when on it, the last thing you want to do is fall back off! A checklist of dos and don'ts is an essential to help guide you through the process.

With increasing regularity the States are earmarking purpose built new developments for first time buyers. These homes tend to be built for purpose and therefore provide an ideal first purchase, although it must not be forgotten that these may only be resalable to first time buyers should you choose to move on. Although designed with the first time buyer in mind, the prices of such properties continue to soar. Over the last two years we have seen these rise from the £300k plus bracket to £400k - £500k. It is for this reason that I would strongly recommend that before any house hunting, a visit to your bank account manager or financial adviser is undertaken to ensure you know what price bracket you can afford. I have seen many disappointments in my 27 years in the industry when buyers set their hearts on a property before finding out the price is not within their grasp. When reviewing your finances don't forget that the current credit crunch could play a role; banks and financial institutions may be looking to limit the amount they lend and could be looking to limit buyers to four-five times their salary.

Dwellings in Jersey are bought and sold by three different methods; a freehold conveyance before the Royal Court, a flying freehold conveyance before the Royal Court or a purchase by share transfer. When the home of your dreams has been identified and the conveyancing process begins, we, as your legal representative, would then seek consent from the Housing Minister for you to purchase the property. This is so that the Population Office can check that you are eligible to purchase a property in Jersey. It is also worth noting that first time buyers will be required to provide a copy of their birth certificate, a reference and if married, a copy of the marriage certificate.

Now the property of your dreams has been found and an agreement made with the vendor, don't get carried away as verbal agreements in Jersey are not binding. The only method to ensure that both parties are bound to complete a transaction is for both to sign an agreement of sale containing a substantial monetary penalty payable by the party who fails to complete the transaction. Agreements are used if you are purchasing off plan and the payments are to be staged. When purchasing a new property with staged payments (over the period of the build), it is worth ensuring that you are able to afford the relevant payments required while you are still residing in rented accommodation.

A structural survey is recommended, particularly if the property is more than 50 years old. Although your lending bank will probably organise a valuation survey, this will not be as thorough as a structural survey. The last thing you need to be left with are huge repair bills for a structurally unsound building.

As the sale progresses make sure you have contingency plans in place for delays and disruptions to the conveyancing process. At present a transaction takes around four weeks , although this timescale should by no means be taken as concrete. Delays can occur for a variety of reasons, including receipt of (or lack of) all relevant consents and replies by authorities, an element of the "chain" of transactions not completing on time, boundary problems, title problems and mortgage arrangements.

In addition to the above, when you have agreed to buy a property we would recommend you should:

• Not pay any deposit until you have spoken to us
• Advise the estate agent that we will be acting on your behalf
• Obtain a quotation from us for legal costs
• Request an inventory of contents to be prepared and check that it is accurate before and after completion
• Arrange a survey of the property (including drains and services) and check that all appliances are working order
• Sign and return the loan offer letter that you received from your bank and advise them of the identity of your lawyers
• Ensure that you have completed and returned any proposal forms for life insurance or endowment policy cover
• Arrange insurance cover for the property to be effective from the day of purchase
• Ensure you have made a Will
• Although the buying process seems overwhelming don't forget to enjoy your hunt for the home of your dreams. It is an exciting time and the end result is well worth the effort!

For further information on purchasing property in Jersey contact Voisin Property or click here to download our Legal Guide to buying and selling property in Jersey as a pdf document.