Property Buying Guide
How to buy a house or Flat– Mortgage Companion’s important tips.
Mortgage Companion’s Property Buying Guide by Martin Rader.
Buying a house can feel like a huge task and if you are a first-time buyer even more so.
I have put together a list of tips for you to consider below that will hopefully make the process much easier for you. This list is derived from my own thoughts and experience, is me speaking in a personal capacity, is by no means exhaustive, not all comments will apply to every property search and is always for guidance only.
First and foremost.
Calculate the total cost of buying a house
Your outgoings when buying a house aren’t limited to the deposit, so it is important to take into consideration the other costs involved with purchasing a property when deciding your budget.
Associated costs include:
- Stamp duty
- A house survey
- Conveyancing solicitors
- Mortgage Product fees
- Removals
A rough guide of these costs for a property valued at £330000.00 is shown below:
- Stamp Duty £4000.00
- Homebuyer Survey £625.00
- Conveyancing costs £1260.00
- Mortgage Product fees from £0.00 to £1999.00 (subject to lender criteria)
- Removals £1200.00 (example figure to pack and move the average contents of a 3 bed house over a distance of 5 miles with unfettered access at both addresses)
If you are a First Time Buyer and have been renting a furnished place there will also be the cost of buying new furniture to take into account. It may be worth checking sites like Freecycle where you can find furniture for free in your area.
Before you start viewing property….
Sell before you buy. Get your property ‘under offer’
Searching for a new home will always be exciting, and with the multitude of online property agents nowadays it can be tempting to search for your dream home when your current property is not yet on the market. It is important to not get carried away and fall in love with a house before you have a buyer, or you may lose out on the house of your dreams to someone with the funds already available.
It will almost always be more lucrative to sell your house before you buy, but it can be complicated and also put you under pressure because you will want the time and space to find the right home but your buyer will want to get going with their purchase of your property.
In many ways it can actually be easier to buy a home as a First Time Buyer, as they’re only dealing with one transaction.
Get a mortgage ‘agreement in principle’
Before buying a house, you should consider getting an ‘agreement in principle’. This is a confirmation in writing stating how much your lender is prepared to lend you to buy a property. Having an ‘agreement in principle’ may give you an advantage over other potential buyers because sellers will know you are a serious buyer and have the necessary finances, giving you the best chance of securing the house you have made an offer on.
Not only this, getting an idea of how much a mortgage lender is prepared to let you borrow will give you an indication of the maximum budget you should have for your house search.
Types of Properties to think about avoiding:
There are some types of properties that might be worth giving a miss.
Flats above shops / commercial premises – Some lenders will look at these flats on an individual basis. Another important thing to consider is that you will have no control over the business operating in the premises below the flat, so all might be fine when its a model shop run by an old boy but when he closes down and it turns into a curry house with the kitchen chimney venting into your bedroom you might change your mind.
Freehold Flats & Maisonettes – Lenders tend not to like these so getting a mortgage might be difficult.
Ex local authority flats over 7 stories high – Again, some lender do not like these. There are also lender who will not lend on blocks of flats over 4 stories with no lift.
Non standard Construction – Basically anything that is not brick or stone walls with a tiled roof. Not a deal breaker but the lenders will need to investigate further before deciding if they can lend.
Flats in a Cladded Block – Any flat in a structure that has been cladded for decorative purposes.
Viewing Properties:
This is the difficult bit because it’s so subjective as what matters to one person may not to the next.
What is important to remember is the phrase ‘Caveat emptor’ which is Latin for “Let the buyer beware”.
So, it is vital for you to ask questions during your viewings as one thing you can be sure of is that if you don’t ask, the sellers won’t tell you!
Some questions worth asking the agent / seller are:
Has the property ever flooded? Even if the house is miles from a body of water. I have a friend whose house is 6 inches lower than the rest of the street and once every 10 years or so it rains so hard that the surface water from the whole road pours into his front door. From standing on the pavement, you would never guess so this is always worth an ask.
Has the property ever suffered fire damage, is so when & where?
Has the property ever suffered accidental structural damage, required structural repair or suffered from heave or subsidence?
Has the property suffered from Japanese Knotweed?
When were the electrics / gas systems installed / when were they last checked or serviced?
How old is the boiler? Is it under warranty or any form of service plan?
Does the property suffer from wood rot or damp or any water ingress? Simple question to ask at the viewing.
Has the seller ever had any disputes with any neighbours? Even if these disputes are apparently long settled, they can bubble back to life with a change of owner so it is worth knowing if there has been anything in the past that has had the current owner and a neighbour gnashing their teeth.
Have there been any activities or events in the road or in the neighbourhood that might impact on your decision to buy? If answered truthfully this should reveal if any of the neighbours have regular loud parties or if cars regularly get broken into for example.
It is very important that you note any questions you ask during the viewing and negotiation process and the answers you receive and ask them again though your solicitor during the conveyancing process as the answers given will then form part of your purchase contract.
The questions I have suggested above are by no means exhaustive so always ask any and all questions you may have about your specific areas of interest or concern.
The actual viewings:
Please, please take your time.
Most viewings take just 15 minutes. This is less time than you would take buying a car! The longer you spend on your viewing the better ‘feel’ for the place you will get. Furthermore, according to Which ‘the longer a buyer spends viewing a property, the more likely they are to secure it for under the asking price. More than half (52%) of buyers who spent less than 10 minutes viewing the property paid the asking price or more, while 71% of buyers who spent more than 90 minutes on viewings paid below the asking price.’
Look and smell carefully.
As I said above, the seller doesn’t have to tell you about problems – in fact, they may even try to hide them. Common cover-ups include painting over damp and hiding wall cracks or floor problems with furniture or rugs. Damp can give off a musty whiff even if you don’t see physical signs, so be on your guard for unusual smells, including excessive air freshener.
Look at the structure of the building.
Take a walk around the entire house and look at the exterior. Check for any visible damp areas or large cracks in the brickwork / render, any missing or loose roof tiles and if you see something that may be an issue, ask if it will be fixed prior to sale.
Take a tape measure.
If you have large furniture like a 3-seater sofa, grand piano or king size bed measure these before you go so you can see how they will fit into the rooms and also consider how they will get into the rooms from outside! You don’t want to have to leave them on the lawn on moving day because you can’t get them into your new home.
Take lots of photos.
You should also remember to take photos inside properties when you view them, as on your fifteenth house viewing they will probably have started to all merge into one. Taking photos will ensure the separate properties are clear when you go back over your viewings later. It will also mean that if you suddenly realise you forgot to check something, you might be able to just have a look at the photos – the seller might not be best pleased if you keep popping back to check up on little things!
Check things work.
Does the shower work properly and does it get hot? Do the windows open and close? Do the taps work? What’s the water pressure like? Do all the elements / burners on the hob heat / light? Do the fireplaces & chimneys work? Do the toilets flush? Do the light switches work? Does the alarm work? Does the oven work?
Simple things you can check or ask about as you move though the house during the viewing that will save unexpected unpleasantness and future expense on the day you move in.
Always keep emotions at bay.
Even if the house you walk into is clearly the star of the show and the one you have to have try to retain your poker face.
Should the agent or the seller gets a whiff of your enthusiasm they will play hardball when it comes to any offers you make.
If nothing else if you allow your heart to rule your head you make easily overlook issues that will cost you later.
Check out the neighbourhood (at different times on different days).
Stalk your potential new home!
The last thing you want when you settle down for the first evening in your new home after an exhausting moving day is the sound of blaring music from the neighbour’s house until midnight. A perfect house at 10am on a Thursday may not seem as good during the weekend evenings, so a good idea is to view your potential property on more than one occasion and at different times of the day.
I would suggest 8 -11pm on a Friday or Saturday and 11am to 4pm on a Saturday and Sunday along with rush hour or school run times during the week.
Also, have a wander around the neighbourhood and talk to the local residents and ask about what it is like to live in the area. Check out local parks, shops and cafes. Make sure you would feel safe in your new home. Depending on how long you are planning to stay in your new home, it might also be worth investigating the local schooling & nursery options.
Take you time to also objectively look at neighbouring properties and how well they are maintained. Are all the houses you can see from your potential front door well kept or has one got piles of rubbish in the front garden and an old van with no headlights?
In addition to this, you should also check the Government’s Planning Portal so you can find out whether any large scale building works are planned to take place which may reduce your enjoyment of the area and the price of your potential future house when you sell on.
Research how much to offer.
The advertised price is just that. It has no bearing on if the house is actually worth it.
As well as being a great way to search for potential houses, online property searches can show you how much properties in the local area have sold for or are currently on the market for. This will give you an indication of a reasonable offer for the house you have your eye on and the ceiling price for the area in which it is located. Sites such as Zoopla and Rightmove are a good starting point for such searches.
If the house you are looking at is unusual and you are unable to do a reasonable comparison you can always go old school and divide the price by the square footage of the house to give you a cost per square foot. You can then compare with other similar sized properties in the area to make sure they are similar.
Ask the seller to take it off the market.
If you have found your dream house and you are ready to make an offer, you can make the offer on the condition that the house gets taken off the market. This removes the possibility of someone else coming forward and either being in a better position or making a higher offer and you being gazumped even after you have agreed the sale. Always check a week after your offer is accepted that it is actually removed!
Only use professionals, A Mortgage & Protection Broker – Solicitor & Surveyor
Once you have had your offer accepted you will need to employ a Mortgage Broker (for example – us!) and a conveyancing solicitor to deal with the paperwork and legal aspects of the transaction.
You’ll also need to arrange for a survey to take place especially if the property is over 10 years old. Although it may be tempting to regard the Mortgage Valuation survey as sufficient it only confirms the value of the property to the lender. It does not tell you anything about the condition or any repairs that may be required which will cost you once you have bought it.
It is important to commission an independent survey from a RICS surveyor for a detailed inspection of the condition of the house.
The two main survey options are summarised below:
A HomeBuyer Report is generally better for properties that:
- Were built within the last 100 years
- Are of more conventional design
- Are built from common building materials
- Are in a reasonable condition, as far as you can tell
A RICS HomeBuyer Report, or Home Survey, is conducted by an RICS qualified surveyor, who carries out a detailed visual inspection of your property, or the one you want to buy. The report you are supplied with following the inspection uses easy to understand ‘traffic light’ ratings, so you can clearly see the property’s condition and any areas of concern.
It includes comments on the condition of the property, provides guidance to legal advisers, highlights any urgent defects, a market valuation, insurance rebuild costs, advice on defects that may affect the value of the property with repairs, and ongoing maintenance advice.
While a Building Survey is generally better for properties that:
- Are much older and built more than 100 years ago
- Have undergone major extension or alteration
- Are much larger and offer extensive accommodation
- You plan to alter in the future
- Are of non-traditional construction.
A RICS Building Survey is the most comprehensive home survey, and is therefore ideal for older properties, or if you’re planning any major works. This report includes all the elements of a HomeBuyer Report, apart from the valuation, as well as a more in-depth analysis of the property’s condition. The report you receive will include detailed advice on defects, repairs and maintenance options.
The findings outlined in the report from your house survey may provide an opportunity to renegotiate on the purchase price, as it will indicate any structural problems and how much it will cost to repair. Additionally, a valuation can be included in the survey to ensure you are not offering more than the market value of the property, which again can be a point for renegotiation so a survey is well worth it!
We are happy to recommend both a solicitor and surveyor to you from our list of trusted partners should you wish us to do so. Just visit our contact us page or call us on 07775 887855 if you wish us to.
Always communicate.
Try, if you can, to get the contact details of the seller so you have a direct channel of communication should you have any questions to save you going through the agent all of the time. Be mindful of the projected timescale of your purchase transaction to ensure you are free and available to quickly respond to any and all questions at all times.
Book your removal firm.
Make sure to provisionally book in a date to move in advance with your removal company and keep them updates if the date slips, and find a team who can accommodate all your items. Bear in mind any furniture that needs to be disassembled and reassembled, and pack any breakables with care. Be sure to allow access for your movers and warn them if you’re on higher floor flat (and if there’s no lift!).
Try not to be tempted to use someone you saw on facebook who advertised house removals for £75.00. There have been plenty of cases where such vans left the old house full and never arrived at the new one!
Consider keeping quiet about your purchase plans on social media. Only tell close family & friends.
You may well be very excited about your plans and the fantastic house you have offered on but gushing about it every step of the way to all of your friends and followers might not be the best idea. Property transactions can fail through no fault of your own or worse still I have known someone who railroaded themselves into a purchase because they had told their 1000+ ‘friends’ on facebook that they would be buying the house no matter what.
It might be best to wait until you have exchanged contracts because then you know it will happen. It will also spare your inbox from being bombarded 20 times a day with ‘have you bought your house yet?’
Get to grips with the key terms.
When deciding to step up on to the property ladder, a lot of us don’t know what some of the house buying terminology means, or that it even exists. Getting to know the key moving terms before you make an offer can help to ensure the transaction runs smoothly and quickly.
Take a look at our glossary, where you can find the key terms for buying a house, and their definitions. This will make every stage of the process clearer.