Purchasing a property has always been a complex process, and continuous regulation and reform adds to the challenges faced by conveyancing solicitors and buyers alike. What is consistent however is that purchasing a property or trading up or down on your existing property can be the biggest acquisition of your life, so here are my top ten tips for your next property transaction.
1.) Arrange the mortgage in principle and consider the finances
Before you consider purchasing a property, contact a mortgage broker or review online mortgage deals to determine how much you can borrow. Buying a home is almost guaranteed to cost more than you think, so undertake some in-depth research. Key things to bear in mind the costs of:
- Mortgage arrangement fee: In some cases this will be non-refundable, even if the purchase falls through.
- Valuation fee: This charge is payable to the lender to check the property offers sufficient financial security for the loan
- Legal fees and disbursements: These will vary depending on the purchase price, the tenure of the property (free hold or leasehold), and the area you are purchasing in.
- Survey: Always consider having an independent survey carried out, in addition to the valuation carried out by the lender.
- Moving costs: Take into consideration any furniture needs, and how much it will cost to move your belongings to your new property.
2.) Government Schemes
It’s worth investigating home-buying schemes such as Help to Buy and Shared Ownership. You can find out more on the Affordable Home Ownership Schemes website.
3.) Calculate your ‘aftermath’ budget
Mortgage lenders are now obliged to consider your ability to afford the mortgage, so be prepared for some intimate questions about your spending. Once your mortgage has been agreed in principle, you should consider your monthly outgoings to determine whether purchasing a property is affordable. It’s best to prepare a spreadsheet that lists your monthly outgoings. It is always a useful exercise to work through a few months of bank statements to see what you’re actually spending.
4.) Research the property and the neighbourhood
Having decided on a property, research the surrounding area and environment. Visit the local amenities at different times of the day, and use the internet to gather valuable information such as local school league tables and crime rates. If necessary, view the property multiple times and ask the seller as many questions as possible.
5.) Leasehold Property
Flats have ground rent and service charges, so these will need to be established and factored into the budgeting process. Also, check the fees the freeholder charges for any consents such as alterations and to register or transfer mortgages. Pay close attention to the number of years left on the lease, particularly where there are only 80 years or less remaining. Lease extensions can be costly, which makes homes harder to sell. Furthermore, if you wait until you have completed the purchase, it will be two years before you gain the right to extend under the statutory process.
6.) Ask the seller to take the property off the market
Some estate agents continue to market properties after the purchaser’s offer has been accepted, which greatly increases the chance of another buyer outbidding you, known as ‘gazumping’. Once you have put in your offer, tell the estate agents that it is subject to the property being taken off the market. Until contracts are exchanged, either party can still pull out at any time.
7.) Instruct an experienced independent conveyancing solicitor
A solicitor can make or break the conveyancing process. It can be tempting to go with online deals, non-solicitor conveyancers, the family solicitor who did your Will, or the service recommended by an estate agent. Instead, make sure you choose an experienced, specialist conveyancing solicitor who is independent to all other parties. SA Law is an accredited member of the Law Society Conveyancing Quality Scheme, which is the benchmark for technical expertise and delivery of conveyancing services in the UK.
8.) Find recommendations
Ask family members and friends for recommendations of services they have actually used. You can also use a trusted independent guide such as Which? or Chambers and Legal 500 guides to the UK legal profession.
9.) Obtain home insurance quotes before buying
Getting a home insurance quote before you exchange contracts not only ensures that suitable cover is available, but also helps to flag up issues such as the property being in a flood risk area. You don’t have to accept your mortgage lender’s cover so it’s best to obtain as many quotes as possible.
Keep in mind that the risk for property will pass from a seller to a buyer at the point of exchange (not completion), so the cover must be put in place at that point.
10.) Ask questions
Never leave anything to chance. Ensure you fully understand what your solicitor and surveyor will and will not do on your behalf, and ask as many questions as possible throughout the process. Your appointed experts will guide you and protect you from any potential pitfalls.