Buying a house

Select a property

Once you have visited a financial services consultant and established your budget you are ready to start the process.

Before starting the search, work out and differentiate between your needs and desires. Be realistic. There will always be the need to compromise between location and budget. Make a list of exactly what you want and next to it what you can accept. Consider how your needs may change as buying a house is an expensive process. Give your needs marks out of 10 to find out how important you rate them.

Establish the area or areas in which you are looking and start the search. Remember that houses in the area next to the nice ones can also be a good proposition. If you anticipate moving the property on soon, a small one in a good area will in many cases be easier to sell than a large one in a less desirable location.

Get to know the area. Walk around it by day and at night, on a weekday and the weekend. Speak to the people in the area and ask how it has changed over recent years.

Check with Planning Service of any developments planned for the area. Check, have they a planning policy and what it is. Ask yourself are the streets clean, - this can be a sign as to how the local people care about the area they live in. Ask local estate agents how prices in the area have moved over recent years and what demand for property is like.  That can show you if the areas is moving ahead or not.

Dealing with agents

If you are a purchaser remember the selling agent is working for the seller. If you are a seller remember the agent is working for you. This may seem obvious but it is worth bearing in mind when an agent asks you to offer more for a property in which there may not be any other bidders.

When making bids you are within your rights to ask questions about competing bids. You will want to assess as will the selling agent if your bid has greater or lesser weight than the competing one. Has the bidder a house to sell or are they a first time buyer or one with their own house sold? Is there a signed contract on the other bidders house or is it just ‘agreed’. Is there a chain involved? These are all questions you are entitled to ask.

Dealing with Vendors

Remember to ask questions of the house owner. Take your time. The average time spend on pre-purchase viewing is 15 minuites! Arrange a second viewing if necessary as you will notice things not seen on the first look at the house.

Ask why the seller is moving, have they any problems with neighbours, are the people in the area young or older? Ask how long they have lived in the house and what work they have done? If they have an existing or previous loan secured on the house was it necessary for them to do any work required by their lender? If the property is older have they done any damp proofing work to it, timber rot or infestation treatment. Has it been rewired or re-plumbed. If they had been staying on in the house would they have carried out any improvements or repairs? By asking questions like these you will develop a picture of the state of the house. It is unlikely that the estate agent will have such an in-depth knowledge to answer all your questions.

Find out the vendor’s timescale. Have they agreed on a new house to move to? Have they a completion date in mind. Ask questions designed to establish how your needs and time frame can fit into theirs.

Make an offer

It should go without saying you should first know your budget, and then offer. Visit your financial advisor at an early stage. Your budget will affect the amount you can offer. You should also know the value of the property and offer up to it. Know your maximum and stick to it.

Don’t ignore value and make an offer just because you can afford to. There may however be a valid reason for doing this in which case you should approach the deal with your eyes wide open knowing that the purchase price is beyond the value of the property.

Remember that you will also need to pay legal fees and expenses to include stamp duty. A solicitor could advise on the likely costs. There may be other expenses such as removal costs, telephone installation, alterations and repairs etc. So don’t under-estimate on these and don’t rush into a commitment that may be beyond you.

Checking it out

Lenders generally require a valuation to be carried out by a properly qualified person before they will give a loan on it. This valuation is not a survey and importantly you should realise it is carried out for the benefit of the lender. You should not therefore rely upon it as a detailed summary of the state of the property. It will however point out matters which the lender will take into consideration before offering you a loan. These may be the need to carry our certain repairs, treat for wood rot, infestation, damp or have the wiring checked. In less usual cases the valuer may have reservations on the structural condition and often in these cases does not venture a valuation until the extent of the work is known.

Building societies often make a ‘retention’, which means they will not advance the entire loan until work is done to meet their requirements. In some cases it is possible to re-negotiate the price where genuinely it is found that essential repairs are needed. Often the retention is the difference between the ‘valuation in current condition’ and the ‘valuation after retention or essential work has been completed’.

Lenders often wrap up the valuers fee into the loan offer and are then seen as giving a free valuation. Their valuer can in many cases offer a Homebuyer Scheme (for the purchaser) at the same time as doing the Valuation for the lender at an increased cost. The extent of the inspection is greater in the case of a Homebuyer service and will give a more detailed report. The lender does not generally want to see this report.

Loans and legal work

If you are new to the process then you many not have used a solicitor before. Carefully select one after obtaining a cost estimate. Most will work under a percentage of the buying price plus expenses and VAT. The expenses will be similar amongst most solicitors. Most will charge an extra fee for the legal work connected with the mortgage.

The legal process will go through various stages which are

Offer accepted with vendor’s agent (agreed). 
Vendor’s agent instructs their solicitor to prepare the contract.
Purchaser arranges finance, Lender’s valuer inspects and prepares a Valuation report for them.
If the purchaser requires a more detailed report then either a separate surveyor or the one employed by the Lender inspects the house in greater detail and prepares a Survey Report for the purchaser.
Any specialist tests etc are carried out.
The Contract is signed by purchaser, often subject to loan and survey
The Contract is signed by vendor and a completion date fixed.
Deposit paid.
Copy Contract sent to the purchaser’s solicitor (exchange). 
Later when all the legal work is finalised the balance money is paid from the loan (Completion).

Move in

The final stage is reached!