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Buying a house
Buying a house can be a stressful and complicated process, with a number of potential obstacles along the way. With the financial crisis and subsequent recession impacting the easy availability of mortgage funds, reductions in the value of property and the tightening of mortgage lending criteria, the decision to buy a house for the first time or trade up has been made even more difficult, or maybe, for some, impossible. However, some straightforward planning can help you to maximise the opportunity to make a successful move to your new home.
When deciding where you want to live, there are a number of factors you will need to consider. These may include:
- The mortgage you are able to secure
- The funds you have available
- The location, including proximity to schools, shops and other local amenities
- The size, style and situation of the property
- Transport links
- Outdoor space and parking facilities
- Council tax and other charges
Setting a budget
It is essential to budget carefully. As well as any additional mortgage payments that may be due on the new property, you will need to consider other costs such as solicitor's and estate agent's fees, Stamp Duty Land Tax, removal charges and possible storage costs, and any necessary funds for renovating or redecorating the property.
|Owning a home is a keystone of wealth…. both financial affluence and emotional security.|
It is also a good idea to have a contingency fund in place to cover unexpected costs, for example additional rental charges in the event that you are unable to move into your new property straight away.
Viewing a property
It is often said that people make up their minds about a property within the first few moments of seeing it. However, while having a positive emotional response to a house may be important to you, it is also essential to remember that buying a property represents a significant financial investment.
Consider the following viewing suggestions:
- Take somebody with you - as well as helping to ensure your personal safety, they may notice things that you do not
- View the property in daylight so that you can look out for signs of any potential problems, such as cracks, crumbling plasterwork, or patches of damp
- Write down any questions you may want to ask, such as how the property is heated, how long it has been on the market, responsibility for any shared facilities, and so on. If the property is not freehold, you should find out about the duration and terms of the lease
- Estate agents' details are usually only approximate: take a tape measure so that you can find out whether your existing furniture will fit in the rooms
- Aim to make a second viewing during a busy time, such as the rush hour, so that you can get a more accurate picture of traffic levels, journey times, etc
Selling your existing home
If the purchase of your next home is dependent on selling your existing property, you should put your own house on the market as soon as possible. Being realistic about your property value is important - while prices around the country have seen an upward move, the quantum has been negligible with prices still adrift from their 2008 levels.
To help maximise the sale value of your existing home, consider the following tips:
- Attend to any unfinished DIY jobs, leaking sinks or peeling paintwork, which could put off potential buyers
- Remove any excess clutter which may make it difficult for viewers to properly assess the available space
- Make sure that gardens and outside spaces are well-kept and will appeal to potential buyers who may be passing by the property
More often than not, your move will form part of a 'chain' of people, who are each looking to buy and sell a property. If one of the links in the chain breaks down, it can have a knock-on effect on the entire process. To help the system along, keep in regular contact with the other members in the chain, and try to remain flexible and approachable in your dealings with them.
Solicitors and surveys
You must instruct a solicitor who is qualified in conveyancing. They will conduct the appropriate searches and deal with the necessary legal issues.
It is also advisable to have a survey conducted by a qualified chartered surveyor. This may seem an additional expense, but it could save you a substantial amount of money in the long run.
There are three main types of survey:
- Valuation survey - which confirms the value of the property for the purposes of the mortgage lender
- Homebuyer's valuation report - this also includes a basic survey of the property's condition
- Full structural survey - this is the most expensive, but also the most extensive, of the three options, and goes into far greater detail regarding the construction and condition of the property
If renovation work is required, you should get several quotes from different companies. If you are purchasing a brand new house, make sure you are supplied with a good warranty from a reputable company, such as the National House-Building Council (NHBC) 10-year Buildmark warranty.
Making an offer
If you like the property, you should put in an offer as soon as possible. In most parts of the UK, it can be common practice to make offers below the asking price. When a vendor accepts your offer on their property they are not bound to sell to you at this stage, and can go on to accept a higher offer - known as gazumping.
However, the procedures for house buying are significantly different in Scotland, where properties are usually marketed at 'offers over' a stated price, and offers become legally binding at a much earlier stage. It is common practice in Scotland to operate a process of sealed bids, whereby each buyer submits their best offer by a specified closing date.
Completing the deal
Once offers have been accepted, you have had the results of any surveys, your mortgage has been approved, and your solicitor has conducted the necessary searches, the solicitors for each party will draw up contracts. Once the contracts have been exchanged, a date will be set for the 'completion' of the sale. At completion, the property will legally become yours.
In Scotland, the 'contract' takes the form of 'missives', a series of formal letters which pass between the solicitors of each party. On conclusion of the missives, you will be given a date of entry to the property.
- You should begin to plan your move well in advance of the moving date, from obtaining quotes from removal and storage firms, to beginning the process of boxing up your personal possessions
- Notify the relevant organisations of your new address, including banks and utility companies, and arrange for your mail to be forwarded to your new address. You should also check the meter readings at both properties
- Remember to transfer your building, contents and other insurance policies to the new house with effect from the purchase date, and make sure that your belongings are covered during the move itself