Conveyancing — Buying and Selling Residential Property
Stress free conveyancing
For many the thought of owning their own home may seem like an impossible dream. But for thousands of people each year that dream becomes a reality.
Our advice to buyers would be to follow these basis principles to make the conveyancing process as simple as possible
1. Get your finances in order
On the basis that virtually every first time buyer will need to borrow money on a mortgage it is essential that your finances are in order. This includes your financial history. An overdraft, outstanding loans or credit agreements, and previous missed payments will not help you get a mortgage. If you would at some point in the future like to buy your own property start sorting out your finances as soon as possible. Clear debts, start saving regularly and avoid any further borrowing. The mortgage company will do a credit check and will also assess your mortgage application on your ability to pay, so the less you have in other outgoings the better. You can check your credit history using one of the credit reference agencies, if the result is not favourable consider if there is anything you can do to improve it.
2. Decide how much you can afford
How much you can pay for a property is equal to the amount you can borrow from a mortgage company plus the total amount of money you have immediately available to you (either in savings or provided by parents/grandparents).
Check how much you have in savings. How much more can you save by the time you move in (average time between acceptance of an offer and completing the transaction is 10-12 weeks, so effectively that is only two paydays – and there will be things to pay for during this period). So base your calculations on what you have at the point of making your offer, or hold off buying if you need to save some more.
If parents are helping you with your purchase get a firm commitment from them about the sum they will be able to give you. It is also vital to agree with your parents the terms upon which they are giving you the money. Is it an outright gift that they do not want back? Are they regarding it as a loan? If you are buying in joint names with a friend or partner do your parents intend to give the money to you, but with the intention that if the property is sold later (or you fall out with your co-owner) the amount they gave is to be regarded as their contribution – and thus is reclaimable. It is better to discuss these issues at an early stage than leave it until the point where contracts need to be signed and moving dates organised. A Declaration of Trust can resolve the issue of unequal contributions by joint buyers if required.
Assuming you know exactly how much you will have available in “cash” you must add this to the sum you can borrow from the mortgage company.
The mortgage company will assess how much they will lend. This will depend on your salary (or joint salaries), so consider lender’s income multiples when considering how much you will be able to borrow. Remember that mortgage payments can increase, in the future – that great two year fixed rate will end very quickly and you will then be reverting to the mortgage company’s variable rate – or have to try to remortgage again (at whatever rate is available at the time).
Look around at the various mortgage companies mortgage products and, if you see one you like, make an enquiry about borrowing from them. You can ask the lender to give you an “agreement in principle” – confirming that (based on the income and details you have given them) they will lend you a certain amount – and armed with that you are ready to look for your new property.
3. Find the right property
Once you know exactly the amount you have available you can start looking at properties. Armed with your finances in order you will look like an organised, serious buyer and so be in a good position to make a firm offer on a property when you find one.
Looking for the right property can be a task in itself. Write yourself a list of those features your ideal property might have. Don’t include too many – I’d suggest a maximum of 10 “ideals”.
Work out how many bedrooms you would like (or can afford), whether you want a house rather than a flat, a south facing garden or a balcony. Do you want to be near to a station, bus stop or the centre of a town. Keep a note of every property you visit how many of these “ideals” the property “ticks”. I would recommend that you see as many properties as you can, you would be very lucky to find the right one within the first two or three viewings (but you might be lucky). I doubt you will find a property that ticks every “ideals” box for the price you have available, but consider these before deciding whether to make an offer. Do not be persuaded to make a firm offer on a property unless you are prepared to buy it. Things like parking, service charges (if a flat) and council tax should all be taken into account, as should the legal and other costs of buying (stamp duty, mortgage valuation fees etc should be built into your calculations when making an offer).
As far as the “offer to buy” is concerned, bear in mind that the estate agent is acting for the seller and is paid to achieve the highest price they can. They are sales people and will be as nice and helpful to you as possible, but will also try to get you to do what they want (ie buy the property at the highest possible price). Do not be afraid (or embarrassed) to make an offer at less than the asking price (if you do not ask you do not get), and do not worry if the estate agent gives the impression that they think the seller will be upset or will definitely not accept it, they are under an obligation to pass on your offer to the seller – whatever it is.
The offer stage can be a bit of a bargaining saga and can become a game of bluff and double bluff. Remember the agents do this negotiating all the time and the reason they might initially tell you that they do not think the seller will “take too kindly” or consider your offer is to soften you up for increasing your offer when they do come back and say the offer is not accepted. Do not be persuaded to increase your offer significantly quickly or to “reveal” your final (or maximum) price too early. The agent may ask you this giving you the impression that they are doing all they can to persuade the seller to agree your offer – but they will also be speaking to the seller about what they can do to get you to increase yours.
Be wary of estate agents statements like “If I can get the seller to agree the price of £X would you find that acceptable?”. This often means that price of £X has already been discussed and agreed with the seller by the agent having said to them, “If I can get the buyer to agree to go to £X would that be acceptable”.
Decide on the maximum price you want to pay and stick to it.
4. Get the correct professional help
Once your offer has been accepted you need to get the buying process in motion. You will need to appoint a conveyancer and make a formal mortgage application. You may have already decided which conveyancer to use, indeed in your organised way you may well have already got a quote for the likely costs before making a formal offer to buy. If so, confirm the details to the estate agent and contact the conveyancers to provide them with all the details and provide them with everything they need (these days this will include ID and details of where the balance of any purchase monies are coming from). Consider a survey and whether this will be done as part of the mortgage valuation, or separately. Consider the property you are proposing to buy. Is there something unusual about it that means you want anything looked at in detail – either by the lawyer or the surveyor, communicate this to them as soon as possible and ask their opinion.
5. Work with those professionals to ensure the smoothest possible conveyancing transaction
You are almost there, you have found the property, agreed the price, the mortgage is in hand and the balance of the money is available when needed. You just need to sit back and wait until everything is “ready”. But what is “ready”. Do not just sit back and wait. Keep in touch with the conveyancer, and the estate agents to make sure there are no problems, and if you have asked them to look into something for you liaise with them regularly to keep informed. If they need something from you respond as quickly as you can, you must work together to conclude matters correctly. It should not be necessary to phone or e-mailing five times a day, a good conveyancer will keep you abreast of activity as and when required, and will not mind responding to a telephone or e-mail enquiry if you have not been in contact for a few days. It should be a relationship of trust and confidence, not a chasing up exercise. The conveyancer who acts for you is probably dealing with the biggest transaction of your life so far, so make sure you choose someone who will ensure it proceeds as smoothly as possible.
There are often unforeseen things that come up that you have no control over. Do not panic and try not to get too stressed. You may be buying from people who sometimes have different priorities or requirements to you, but they all ultimately want the same thing – for you to buy and for them to sell, so rely on your professional adviser to check that all is acceptable from a legal point of view and then, if things go to plan, the exchange and completion dates should follow without difficulty.
You will then have fulfilled the dream – to own your own property.
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