Advice for buyers
Purchasing a property can be a daunting prospect, it will probably be the most important purchase of your life.
Because we’re focussed on the completion and not just the agreement, Horton & Storey will be with you every step of the way. See below for our tips and what to consider when buying a property.
1. The true cost of buying
There are a number of associated costs when purchasing a property. It’s important to take into account the following.
You will have to pay for your own conveyancing and this price will vary in relation to the purchase price and complexity of the sale. A leasehold property can be more expensive. Make sure you obtain a number of quotations.
Stamp Duty implications have changed in recent years and now adopt a more progressive approach. The new system is quite complex, it is based on paying a rate for the proportion of the property that is subject to that rate.
Lets assume a purchase price of £350,000, the new approach assumes:
- You pay nothing below £125,000.
- You pay 2% on between £125,000 and £250,000.
- You pay 5% on the value of the property above £250,000.
Working example at £350,000
£0—£125,000 = £0
+ £125,000—£250,000 x 2% = £2,500
+ £250,000—£350,000 (£100,000) x 5% = £5,000
Total Stamp Duty payable = £7,500
This fee will be charged by mortgage lenders. The valuation will provide them with evidence that satisfactory security is apparent for the loan. The cost varies depending on mortgage lender and purchase price.
There are a range of surveys available when purchasing which range in price and intrusive nature. Prices range from £350 for a homebuyers report up to £1000+ for a structural building survey. This is also subject to purchase price, age, and size of the property.
Additional costs movers underestimate include:
- Removal costs
- Repairs and DIY
- Soft furnishings!
2. Mortgage amounts
You mortgage will probably become the largest monthly charge once you have moved in. It is important to take your time when choosing a mortgage product. Many buyers don’t spend as much time on this aspect when purchasing as they should do, usually incurring costs/charges once in residence.
A deposit size can vary and the government has schemes to help increase the choice for buyers will smaller deposits, such as Help to Buy. However, these schemes have received criticism in recent years as the borrowers end up paying increased premiums over the term.
The traditional deposit amount of 10% relating to the purchase price is still competitive. An increase in deposit amount to 15%–20% will attract better rates relating to repayment.
3. Research your potential home
There is a plethora of free information on the Internet relating to the history of your potential home and the surrounding area. To see any sold house price sites such as Nethouseprices, Zoopla and Rightmove provide information that can help you make a decision. These sites also provide information on the local area, the potential layout of the property and older pictures. Census data is invaluable if you want to evaluate the greater geographical location around the property.
4. Mortgage in principle
A mortgage in principle (MIP) or an agreement in principle (AIP) is a basic agreement that states how much you can borrow, subject to finding a property within a timeframe. Although this can be subject to change, it can give you a better chance of acquiring a property. Many agents see this as a positive when offering on a property. Please note that MIPs and AIPs do not secure anything, they are subject to a successful mortgage application and valuation.
5. Ask the agent for more information
Remember purchasing a property will be up there with one of the biggest things you will do in your life. The best way to release that nervous tension is to ask the agent representing the seller as many questions as possible. At Horton & Storey no question will be too small, we understand the importance of the situation and want you to feel as comfortable as possible. We like answering these questions as it reduces the risk of any unforeseen problems once a sale has been achieved.
We recommend asking your agents the following:
- How long has it been on the market? Is there a chain?
- Where are the owners moving to- why?
- How many viewings has it had?
- Has it received any offers?
- How long have the current owners lived there?
- What’s the council tax banding?
- Has the property been involved in any significant crime(s)?
- When was it last re-wired?
- Does the double glazing (if applicable) have a FENSA certificate?
- What are the neighbours like?
6. View more than once, at different times of the day
This factor is important when considering how the property looks in different weather conditions and different times of the day. Viewing the property in the day you are more likely to notice obvious internal and external defects. However, evening viewings are more important in relation to neighbours and how good the lighting is throughout the house.
7. Phone a friend
Many people know someone who has more knowledge of building pathology than them. Get them to give you an honest opinion of the property and how this will relate to the price. This could also save you money on a survey further into the purchase. Key problems to look for are:
- Exterior cracking– This could be settlement depending on the property age but it can relate directly to a structural defect. Be very wary of cracking through any brickwork and consult a qualified building surveyor if you want to progress.
- Damp– Damp can form due to a number of reasons, the most common being lack of ventilation. The best way of spotting damp is to use your senses. Does it look mouldy or wet, is the wallpaper peeling off? Does it smell damp? Does it feel damp?
- Power Points- Speaking from experience there’s nothing worse than moving into your dream home and having to face the dilemma of a re-wire or running extension cables around every room. If you are interested, obtain/draw a floor plan of the house and mark the power points. Then you can plan out each room without any problems!
- Items out of place- If you see a chair at a funny angle or a rug not quite straight when viewing a property, the chances are that the current owners haven’t had time to tidy, right? Wrong. Most sellers will try and cover up stains or other non-desirables. Make sure you check anything that you feel is out of place.
- Roof- Make sure you inspect the roof with a pair of binoculars and look for any slipped or cracked tiles. You then need to inspect any chimneys and look at the quality of the brickwork. The guttering can also create problems such as penetrating damp, so make sure these are visually inspected.
- Curtain Twitch- Sounds strange! Go into an upstairs rear room and inspect the neighbour’s garden. This will give you a small indication regarding the upkeep of the neighbouring property. You can also inspect the rear of the property from the garden.
- Signal- Make sure you look at the current signal in the house. We live in a technological age where Wi-Fi and mobile signal is important.
8. Think of the future
Most people move house a number of times throughout their lives. Although you might be interested in purchasing the property consider how other people would view the property? Does it have an outstanding feature directly relating to you as an individual? If it does, will that feature add value to other people in the future? Why has the property been on the market this long? Food for thought.
9. Avoid gazumping!
When negotiating your offer, make it subject to the condition that the seller will ‘withdraw the property from the market’. This dramatically reduces the risk of the seller accepting another higher offer after an agreed sale. Remember, everything is subject to contract. Until the contracts are formally exchanged, both parties can pull out of the sale at any time.
10. Questions to ask the sellers before completing
With completion a number of weeks away it is very helpful to ask the current owners specific questions relating to the property.
Here are Horton & Storey’s top five:
- Where are the electricity and gas meters?
- Where is the Stopcock?
- Which day of the week is bin collection?
- Who currently supplies the utilities?
- Are there any current warranties in place within the property?
Here to help
If you have any other queries relating to the purchase of your property or a general question regarding the above please get in touch to discuss further.