House buying can be stressful. YK DAILY'S guide takes you through the process of buying and selling from offer to keys being handed over.
The advertised price of a home is not necessarily what you will have to pay. It's normal to offer an amount some way below the asking price. If the house is selling for £330,000 and you can afford to pay £320,000, you might want to offer £310,000. If the bid is rejected you can always go back and offer a higher price.
Remember that whatever you pay for the house, you will also have to pay stamp duty, so keep that in mind when offering.
The buyer will make their bid through your chosen Estate Agent (choose wisely) who will relay this offer to you, the vendor.
At times when property prices are rising very fast you may even find yourself gazumped. Gazumping is when another buyer comes in with a higher offer at a later stage in the process and clinches the deal (gazundering is when the would-be buyer reduces their offer at the last moment). It can be very frustrating to be gazumped, but don't get sucked into a bidding war and don't let emotion cloud your reason. If you can't strike a deal at a price you want - walk away.
Ideally you will have arranged a mortgage before you find a house you want to buy. This will prevent delays. However, if you haven't already done so, arrange a mortgage as soon as possible once your bid has been accepted.
Some lenders will issue a mortgage in principle agreement stating that, subject to valuation and status, you are guaranteed a loan up to a certain amount. A mortgage in principle will persuade the seller that you are serious, and speed things up, as will the ability to give the seller solicitor's details straight away.
If you haven't found a solicitor before you make the offer, you must hire one straight after. You need a solicitor to deal with the legal aspects of buying and selling property. Personal recommendation is the best way to find one or you can contact the Law Society or the Council for Licensed Conveyancers for a list of names. Remember - a good solicitor is a sound investment. Get quotes from several and be sure you know what the quote covers.
The home you have just made an offer on may look safe as houses, but you don't know what problems may be lurking behind the walls. You need a surveyor's report to point out any problems. Your mortgage lender will arrange for a qualified valuer to do a brief survey, called a valuation, which you may need to pay for. Provided the lender is satisfied the property offers enough security for a loan, you should be offered a mortgage.
However, it is generally worth paying out the extra for a more in-depth survey. It may seem expensive at the time but compared to the costs a problem home can bring it is neglible.There are three types of survey. It is in your interests to get the most thorough one you can afford.
The compulsory mortgage valuation will cost £150 to £200 but it is a cursory affair. It simply tells the lender that if you default on the payments it will be able to sell the property and get its money back. It won't spot major faults. In some cases nowadays, lenders do not even visit the property and do automated valuations based on area and house price data.
A homebuyer's survey costs from about £250 - but more often around £400 - depending on the price of the property. It should reveal any serious defects. It can save you money because if it uncovers any major faults you can ask the seller to rectify them or reduce the price so you can afford to get them fixed.
A full building survey costs between £400 and £1,000-plus, depending on the type and value of the property in question. It goes into detail about the condition of the property and any remedial action the surveyor thinks will be necessary. The older and more expensive the property, the more important it is to have a full survey.
However, even the full building survey will not tell you everything you need to know. The surveyor won't start taking up floorboards and won't necessarily have access to the roof. Much of the report represents the surveyor's views on the probable condition of the home and things which might go wrong.
This is the legal term for transfer of ownership of the home and often the most painful part of buying a home. It is undertaken by your solicitor and the seller's solicitor and involves ensuring the seller has the legal right to sell the property, checking that no-one has right of way through it and that there are no land disputes.
The business of conveyancing is very involved and can often give rise to long, frustrating delays, which will have you plotting dark deeds of revenge against the legal profession. The seller's solicitor must get the deeds to the property. These may have to be obtained from the building society or bank which is lending the mortgage. The solicitor then prepares the contract.
With leasehold properties - in particular flats with service charges - the solicitor will also have to obtain the 'memorandum and articles of association' of the management company and the accounts of the management company over the past three years. This often slows down the buying process.
The buyer's solicitor makes a local authority search. This will provide details of who owns or is responsible for the roads or sewers and whether there are any road-widening proposals near the property. Separate inquiries may have to be made to the relevant water company. Some local authorities return the searches within two days, others can take up to eight weeks.
Most of these details should be provided in the Home Information Pack provided by the seller, however, your solicitor is likely to still want to check them out.
Remember solicitors tend to be very busy people and rarely do anything without being asked. Don't expect your solicitor to be proactive - they might be, but don't rely on it - keep checking up and asking if there is anything you can do to help the process move along. If you can, build up a good relationship with the seller, this means that you can deal directly with them and let them know what is still needed.
If the seller is worried things are going to fall apart and can pick up the phone and call your agent to check everything is still okay, it could be the difference between losing a property and keeping it.
Exchange And Completion
The two most important stages in conveyancing are the exchange of contracts - between the buyer and seller's solicitors - and completion. When exchange takes place the buyer usually puts down a 10% deposit. After this the seller and buyer are legally committed to the deal. If the buyer pulls out, for whatever reason, they lose their deposit. Conversely, the seller cannot accept a higher offer and if they pull out the buyer can claim compensation.
After exchange, a date will be fixed for completion – it usually takes place within four weeks. It can be done sooner, even on the same day but solicitors prefer some kind of gap. You will need to have the balance of the funds for the purchase of your new home paid to your solicitor ready for completion. This means that you need to give them any deposit beyond 10% and have the mortgage company ready to pay the balance, this normally takes 5 days to draw down after exchange. At completion, the deal has been done and a transfer of ownership has taken place. You get the keys to your new home.
The whole process of buying a home is made even more complex because you are often a single link in a chain of buyers and sellers. While you are just trying to buy or sell one property from or to one other person, a whole network of deals is being done around you, and your deal cannot proceed unless all the other transactions succeed as well. This means that while many people say buying your first home is the most stressful thing, actually being a next time buyer can be worse as you are juggling your sale, your purchase and all the other worries.
If you are selling your current home and buying a new one, you need to make sure that you are exchanging contracts on your purchase and sale at the same time. Otherwise you may find you've committed to buying a home without having sold one, or have sold your home without having one to move to. Neither scenario is good for your blood pressure.
Book Some Time Off Work
After the contracts have been exchanged, it’s time to prepare for the big move. If you work, booking some time off is ideal as there will likely be arrangements to make, including removals. Try and book at least a few days off to give yourself time to plan the task of moving house. Leaving it until the last minute can result in panic, so ensure that you have planned well ahead.
· If you work, be sure to book a few days off!
Compare And Arrange Removal Costs
Moving home can be expensive so compare several removal services before you take the plunge. Once you’ve found the best company for your needs, let them know the moving date and how many vans you’ll require. It’s best to contact them again 24-48hrs before your moving date to ensure that your moving day plans are confirmed.
· Use a site such as Compare My Move to compare removal costs.
· Book a well respected, fully-insured removal company. We recommend looking for one backed by The British Association of Removers or the Property Redress Scheme.
· Contact your removal company 24-48 hours before your moving date to confirm times.
Sort Out Your Bills
Once you have sold your home, it’s important that you contact your service providers and banks to let them know your change of address. This will ensure that all your future bills are addressed to your new property and that you keep up with payments.
· Contact your banks and credit cards to inform them of your change of address.
· Contact any utility companies (electricity, gas, Sky, broadband, phone line, etc) to inform them of your change of address and to give final meter readings where appropriate.
. We recommend Bulb.co.uk for gas and electrics, renewable energy at great prices.
Redirect Your Post
For all other post, you may want to direct it to your new address. You can set up a redirection with the Post Office to prevent other people from accessing your personal details and to prevent ID theft. Your mail can be re-directed from £31.99 via Royal Mail for up to 3, 6 or 12 months.
Arrange for your postal redirection with the Royal Mail.
Clean Your House Before You Move
Before you move out of your property, ensure your home is thoroughly cleaned and that you’ve checked each room for any overlooked belongings. If you find anything is broken, contact your solicitor to let them know. While it’s highly likely that the new owners will clean your property once they’ve moved in, its good manners to ensure that your home is in a good condition for them to live in. Give your house a deep clean before you move out.
When accepting offer, always bare in mind that if you have to choose between two similar offers, but one is a chain & one isn't, the one without the chain is always more desirable, and would have a higher chance of closing swiftly & with less stress.