Here’s my top tips on how to buy a house. It is a complex puzzle and one that causes so much hair pulling (of your own, of your other half’s and potentially of the estate agent!) so we thought we would try and help.
Here is our six-point guide.
1 Know your budget
Before you jump onto our website and start planning what colour to paint the wall in the downstairs loo, get your finances and paperwork in order. For those considering a house move, the first port of call is a financial adviser. Rather than guessing what your budget might be, be clear on what you are eligible to borrow. A good financial advisor is the first stop on your exciting journey.
You need to know what you can afford to spend and where you can get the money if you find your dream home.
One of the most common mistakes is not being in the position to complete should you find the property you want. You need to be able to pay a 10 per cent deposit at exchange and show your lawyer that you are in a position to complete. You don’t have to have sold your property to do this, but you will need to have access to a bridging loan or other investments or assets that you can loan against. Get your home valued, get a mortgage agreement agreed in principle and then call me to help you find a new home!
2 Do your research
Talk to your agent as a confidant. Be frank about what you need and want, and be clear about what you will compromise on and what you won’t. View properties up to 10 per cent over your budget; you never know how far a vendor is prepared to negotiate.
Know your market in terms of geography and value. It is always sensible to buy the worst house on the best road, rather than vice versa.
3 Find a property
Head to Rightmove and Zoopla and set up property alerts. When you see a home you like then call the agent and book a viewing. Buyers will know within five minutes of arriving at a house if they like it. I have known buyers wanting to progress to a bid before they have got out of the car because they like the drive and façade of a house. As agents, we like buyers to visit twice before bidding — a third visit means they are having second thoughts or looking for a reason not to buy.
Figures show that, on average, houses are on the market for six days before a first viewing, and it takes 15 days until the first offer is made and 36 days until it is sold. The fastest sales occur in the West Midlands, where it takes only 28 days to sell a house, and the slowest in northeast England, where it takes 59 days. So you need to act pretty fast.
4 Make an offer
There are no rules when it comes to pitching a first offer, but most experts agree that you shouldn’t go in too low. Make a reasonable offer and be prepared to increase it. You want to be taken seriously, otherwise you could find that the seller doesn’t give you a second chance and the agent doesn’t contact you with future properties.
Competition for the best stock, particularly in the mid-market price range of £400,000 to £800,000, is fierce, so it’s about playing a tactical game, sometimes offering over the asking price to avoid entering a bidding war and ensuring the property is taken off the market. But only do this if you are serious – if you pull out of a purchase after you offer word soon spreads that you are not a serious buyer and you are playing silly games with sellers lives.
5 Exchange and completion
If your offer is accepted, it is not legally binding in England and Wales until you exchange contracts. When you exchange you need to have the funds to complete the sale. If you back out after exchange it is likely you will lose your deposit and have to pay associated costs, and the seller can sue you for breach of contract.
Before you exchange there are a few things you need to do. Agree the offer price, including fixtures and fittings, and get a survey done. Your solicitor has to do relevant conveyancing searches and you need your deposit and mortgage offer in writing.
A homebuyer’s survey costs about £400 and a full structural survey about £1,000, which is critical to get if you are buying a listed home.
Before your surveyor visits the property, ensure they are in touch with your agent, who can furnish them with evidence to justify the price agreed. This is crucial in an age when some surveyors take much of their evidence from the internet, which invariably fails to grasp the core components of a property that justify its price.
Conveyancing searches have been known to hold up the completion of a property purchase and last year were taking up to two months, so it’s worth factoring in additional time and staying on the back of your solicitor.
From offer to exchange will take about ten working days, but from exchange to completion can take up to three months.
Four to five months from first viewing a property, selling an existing property and reaching point of completion is the local market average.
A vendor’s lawyer should have a contract pack ready with searches up to date, answers to likely pre-contract inquiries, together with the fixtures and fittings list agreed. With these to hand there is no reason why a contract cannot be exchanged within days.
6 Move in
On the day you complete, your money is transferred to pay for your home and you can collect the keys and move in. Happy days. Unless you haven’t sold your current house, in which case you will have to pay an extra 3 per cent stamp duty. However, if you sell it within three years you can claim this back.
Happy House Hunting.