How to buy a house

[RedBike]

How do I go about buying a house?

I've found the house I want. I have the mortgage agreed in principle and I'm well within the limits of the amount I can borrow.

What do I do now?

Do I phone up the estate agents first and say "I will give you 100k for that"

or

Do I go to the mortgage lenders first and say will you loan me 100k to buy that?


I obviously need a solictor and to have a survey done. Do I arrange all this after I have made the offer? Presumably the estate agents will be able to recommend someone? -

As you can probably tell. I've never done this before and I have no idea what i'm doing!!

 

[Night Train]

First off you need to see your mortgage lender and get them to approve a mortgage up to a maximum, or whatever lesser amount you need, that they will lend you. This will depend on the amount of deposit that you have available to you and any other outgoings and debts that you have to pay.
Once you have a relative certainty that the lender will lend you the money then you can approach the agent and arrange to view the house and make sure that it is the one you want.

You can then appoint a solicitor and your own surveyor, though the lender will want to use their own for the valuation, to satisfy yourself that the house is worth the amount that is asked for it. The lender's surveyor will only be interested in the current value of the house being greater then the amount you want to borrow. You surveyor will let you know what ever you need to know about it and if it is due to fall down.

You can then approach the agent and make an offer, somewhat less then the asking price, and see what happens. Should the vendor accept the price you offer then it is put in the hands of your solicitor to sort out the legal stuff.

You may find that the lenders surveyor decides the house is worth less then you are borrowing, in this case the lender may ask you to put in a higher deposit to reduce their risk.

At the end of it all you will have fees to pay. Ask what the fees will be at each step and of each of the organisations acting on your behalf and make sure that you have money left over to pay this.

You lender will also want you to take out insurance with them, though you can go elsewhere, to cover the rebuilding cost of the house and sometimes the contents too. You can pay this annually which is better or add it to your mortgage, which cost a fortune, over 25 years.

 

[marinyork]

A mortgage survey will happen anyway, it's a ten minute job (or used to be). Whether you want something like a full structural survey is entirely upto you.

 

[Bigtwin]

1 & 2 are interchangable - just get them done

1. Mortgage advance approval in principle from lender

2. Put in an offer on the property. Don't be afraid to knock on the door and speak to the owners, else via the Estate Theives.

3. Legal stuff. DIY/Solicitor/Licensed conveyencer. DIY is possible, but you have no one to sue if you cock it up. LCs are cheap and cheerful unless it goes Pete Tong, when they won't be. Sols are the safest - they will be a bit more £, but are insured to a min of £3m if you need to claim. Depends on the house to a large degree - moden on an estate - not too hard, DIY will work. Flying freehold wing of a 14C mannor on a private estate - best use a solicitor.

From then on it gets complicated. The Gov have shagged up house buying good an proper from even its previoius silly state. Just remember that a HIP is not worth the paper it's written on. But once you get your offer accepted and lending approved, you'll be dancing to someone else's tune anyway.

http://www.home.co.uk/guides/buying/conveyancing.htm

 

[Night Train]

Also, when you own a house everything that can possibly cost money in the running and maintaining of the house falls to you. Even if you think something may come down to an insurance payout they will find a way to squirm out of it.

 

[Over The Hill]

Get offer accepted first - that costs you nothing!
Doing anything relating to the mortgage will usually involve a fee so better to do the free bit first.
Use a local Solicitor or Licensed Conveyancer - not the one the Estate Agent trys to set you up with. Phone a few and pick the one who you feel is right for you. You are best using a local one as you may need to go in to discuss it and it is much easier to deal with any papers if it gets a bit near a deadline.
From there just sit back and write out the cheques!

 

[dan_bo]

take a load of vallium and let the missus look after it-just make sure you're with it enough to pay the bills for the next 25 years.

 

[Globalti]

Only Night Train has mentioned the survey. This is terribly important if you are to avoid buying a bad house. How old is it? You neeed to know about the condition of the roof and the walls and foundations, the windows and all the internal stuff like the heating and electrics. Just like buying a car, if there are signs of neglect then there will certainly be some problems to sort out; owning a house needs a serious atttitude to repairs and maintenance. Few British people have this attitude and even fewer people from overseas where often house are just built from concrete with little to go wrong apart from the paint, with no damp problems. If the house is anything less than brand new you should get a full structural survey unless you're confident you can spot problems. Then go along with a builder and get estimates for putting everything right and use these to negotiate the price down. Remember, something that the vendor passes off as a minor problem (leaking tap, crack in wall, failed double glazing) is going to cost you money and, more importantly, time and effort to put right.

 

[RedBike]

Sadly, although it seems totaly back to front I know the survey comes after you make an offer. I will be ringing the estate agents at dinner. - very nervous.

 

[Globalti]

Make a cheeky offer; you can always go up but you can't come down.

 

[RedBike]

Well I failed to buy either of the houses I wanted.

The asking price for the first was 80k. My first offer was 70k, which I thought was a reasonable offer but it was declined instantly and I was told by the estate agents the sellers wouldn't accept less than the asking price.

I ignored the agents and offered to meet the sellers half way at 75k, This offer was was also declined instantly.

Out of desperation I offered the full 80k asking price for the property partly furnished. (cooker, fridge, carpets, curtains etc. - I know the seller doesn't want ANY of her furniture for her new property so these few items didn't seem like a lot to ask for) Again the offer was also declined instantly.

I gave up and moved onto the second property.

The asking price for the second property was 75k.
I offered 64k, This offer got declined by the estate agent. They never even contacted the buyer. Apparently this seller wouldn't look at offers less than the asking price either.

I didn't even bother making another offer.

I will wait a few weeks and if either property is still on the market then I might go back with another offer. - A few 1000 less than last time of course for making me wait!

 

[Bigtwin]

This offer got declined by the estate agent. They never even contacted the buyer. Apparently this seller wouldn't look at offers less than the asking price either.

I smell bull. Speak to the seller - note through the door will do. Nothing to lose and EAs lie like fresh snow.

 

[Kestevan]

You may well find that there are more sellers who wont budge below the asking price than you think.

Anybody who bought at the top of the market may now be well into negative equity. Unless they "really" have to cut their losses and run, asking price+ (esp with rumours of a rising market) might be the only way they will consider a sale.

 

[Over The Hill]

You may find that they cannot budge on price below a point because they owe that much on the mortgage. If they dont have the money to pay off the mortgage to reduce the outstanding then the lender will not let them sell under the balance owed.

I have not seen one go through at its asking price but then if the asking price is realistic then there is not much room to move.

There are not so many on the market now but even less buyers.

 

[Bigtwin]

If they dont have the money to pay off the mortgage to reduce the outstanding then the lender will not let them sell under the balance owed.

The lender cannot prevent the sale.

However, the redemption statement they provide will show the figure required to discharge the mortgage. If the sale figure is not adequate to do this, the the buyer will need to see further funds from another source, and contracts ought not to be exchanged till this point is addressed. If not, the buyer will acquire the property subject to the lender's charge on the property. I.e. they have "dibbs" on it to the value of the outstanding secured sums. Not good usually, though some sophisticated buyers will take a view on this at the bottom of a market.