Buyers Guide

First Steps

The first thing you need to do is decide your budget. You will need to look at how much money you have available yourself and how much you can borrow. Some lenders now provide buyers with a certificate that states that a loan will be available provided the property is satisfactory.

When buying a property, there are a few additional things you will need to bear in mind, before deciding how much you can and want to spend. These include:-

• Survey fees
• Valuation fees
• Stamp Duty Land Tax
• Land registry fee
• Local authority searches
• Fees, if any, charged by the mortgage lender or someone who arranges the mortgage, for example, a mortgage broker
• The buyer’s solicitor’s costs
• VAT
• Removal expenses
• Utility bills

*Please be aware that if you start the process of buying a property and the sale falls through, you may have already paid for a valuation or a survey. If the solicitor has started any legal work, you may also have to pay for their work done.

Before offering on a property, we recommend you also take into account the possible running expenses. These may include:-

• Community charge/council tax (in England and Wales)
• Water rates (in England and Wales)
• Rates (in Northern Ireland)
• Ground rent, if the property is leasehold
• Service charges, if the property is a leasehold flat insurance costs, including life insurance, buildings and contents insurance
• Heating bills. An energy performance certificate can help you work out how energy efficient your property is. You can find this rating on the property details.

Finding a property

There are a number of ways in which properties are now marketed. These allow you to expand your search boundaries, without being local to your preferred area:-

• Visit Goodman & Lilley
• Local newspapers
• Searching future Developments with building companies.
• Browsing online portals such as Rightmove.co.uk or OnTheMarket.com

Deciding on a property

When you find a property you like the look of, ideally you would need to arrange a viewing us. During this initial visit, it will give you the opportunity to see if any renovations or repairs are required. You will be able to see if it is suitable - we believe there is a home for everyone! Don’t worry; it is common for potential buyers to visit a property two or three times before deciding to make an offer.

Warranties for newly-built properties

If the property is newly-built, please check whether it has a Buildmark warranty. Buildmark warranties are organised by the National House-Building Council (NHBC), which is an independent organisation with over 20,000 builders of new houses on its register.

Before being accepted onto the NHBC register, builders must be able to show that they are technically and financially competent and they must also agree to keep to NHBC Standards.

The Buildmark scheme covers homes built by NHBC registered builders once the NHBC has certified them as finished. The scheme will, for example, protect your money if the builder goes bankrupt after contracts have been exchanged but before completion. It also covers defects which arise because the builder has not kept to NHBC Standards.

Tenure

Freehold

The land on which the property is built is part of the sale and no ground rent or service charge is payable.

Leasehold

When the land on which the property is built on, is not part of the sale. You will have to pay ground rent to the owner of the land - who is called the freeholder.

There will be a lease on this and the length of it can vary. Please check that the length of the lease on the property is acceptable to the mortgage lender. In addition to ground rent on a leasehold property, you may have to pay an annual service charge.

This usually happens with a flat. The service charge covers such items as maintenance and repairs to the buildings, cleaning of common parts and looking after the grounds.

A group of leaseholders living in the same building may have a right to jointly buy the freehold of the building or take over its management.

Commonhold property

You can potentially buy the freehold of a flat and also own common parts of the building, jointly with the owners of other properties in the building. This is known as a commonhold association.

A ground rent or service charge is not payable, however, a share of the commonhold association's expenditure on maintenance, insurance and administration will be payable for the common parts of the building.

Making an offer

If you would like to buy a particular property, you do not necessarily have to pay the price being asked for it by the owners. For example, if you think repairs are needed, then you could offer less, bearing in mind the possible expense.

Firstly, tell us what you are prepared to pay for the property. We will then put this offer to the owners.

If the owners do not accept your first offer, you can decide to make an increased offer. There is no limit on the number of times you can make offers on a property. If you make a written offer, it will always be made subject to contract. This means you will not be committed to the purchase before finding out more about the state of the property. If you make an verbal offer, this is never legally binding.

When the offer has been accepted

If you are successful and your offer has been accepted, then you will have to consider the following:-

• Whether a holding deposit is payable
• Arranging a mortgage - see below
• Whether a survey is necessary - see below
• Who will do the necessary legal work - see below
• Whether you want to buy with someone else - see below.
• Arranging a mortgage

MORTGAGES

If you have not already begun to arrange a mortgage speak with us as we have a number of trusted business associates with whom we can put you in touch. It should take about three weeks from the application for the mortgage to the formal offer being made by the lender. However, this timescale may vary.

Whoever agrees to lend the money will want to have the property valued. This is to make sure that the lender could get the loan back if for any reason you stopped paying your mortgage and the house had to be sold again. The valuation will be done by a surveyor on behalf of the lender but you will have to pay for this valuation. The fee will be payable in advance, usually when you send a completed mortgage application form to the lender.

If the amount of money to be borrowed is more than a certain percentage of the valuation of the property (usually 75-80%), your lender may make it a condition of the loan that you take out extra insurance to cover the extra amount. You pay a single premium to your lender which is usually added to the loan. This is known as a higher lending charge (or mortgage indemnity guarantee).

Arranging a survey

The valuation which is done for whoever is lending the money is not a survey. You should consider whether or not to have an independent survey carried out in addition to the valuation. The survey would not only consider the value of the property but would also examine the structure of the property and should identify any existing or potential problems.

There are two levels of survey that you can choose between:-

• A full structural survey. This is suitable for a property which is large, more than 80/90 years old or in doubtful condition.
• An intermediate or ‘house/flat buyers report’ that gives a report on the condition of the parts of the house that are easy to see and to get at and may recommend further tests or investigations, for example, a specialist check for woodworm. This is particularly suitable for properties built this century which appear reasonably sound. It is much cheaper than a full structural survey.

It is possible for you to use the same surveyor who does the valuation to carry out the survey and this may be cheaper. However, you can use a different surveyor if you wish.

If the surveyor reports that there are some problems with the property, you will have to consider whether you still want to go ahead with the purchase or want to negotiate further with the seller about the price. The surveyor will usually advise you as to how any problems they have identified should be dealt with and the likely costs of this.

Conveyancing

The legal process of transferring the ownership of the property from the present owner to the buyer is known as conveyancing. You should decide who you want to do the conveyancing work. You can do it yourself – although this can be complicated – or you can:-

• Use our recommended solicitor
• Speak with one of our Sales Consultants about licensed conveyancers.

Solicitors

Most firms of solicitors offer a conveyancing service. Although all solicitors can legally do conveyancing, it is advisable to choose a solicitor who has experience of this work.

Costs

Before making a choice as to who will do the conveyancing, you should be advised to find out the probable costs of the conveyancing. It is important to contact more than one solicitor or licensed conveyancer as there is no set scale of fees for conveyancing. You should:-

• Check whether the figure quoted is a fixed fee or depends on how much work is involved
• Check that the figure includes stamp duty, search fees, land registration fees, expenses and VAT and get a breakdown of these costs
• Find out what charges, if any, will be made if the sale falls through before contracts are exchanged

Legalities of buying a Property

Although it is impossible to give a precise idea of how long the legal work involved in buying a property takes, it is possible to offer guidelines. From having an offer accepted to exchange of contracts can take up to seven weeks and from exchange of contracts to completion can take up to four weeks. However, if there are any problems the time taken may be longer.

Enquiries made by the solicitor or, in England and Wales, licensed conveyancer

Once you have instructed the solicitor or, in England and Wales, a conveyancer, the seller’s solicitor or the licensed conveyancer draws up a contract which will eventually be signed by you and the seller. However, before the contract can be signed, your solicitor or licensed conveyancer must make sure that there are no problems with the ownership of the property, rights of way, access, or future developments in the area that might affect the property. This is called ‘making enquiries and searches’. The solicitor or licensed conveyancer makes the enquiries and searches as follows:-

local searches. These are enquiries made to the local authority (or in Northern Ireland, the appropriate government department) about any matters, which affect the property which involve the local authority, such as whether there is a compulsory purchase order on the property.

Local searches also include questions about any proposed changes or development in the area that might affect the property such as roads, housing, shops. During the local search, the local Land Charges Register (Registry of Deeds in Northern Ireland) is also checked. This gives information about any matter which affects the property such as tree preservation orders, if it is a listed building or in a conservation area; and enquiries made to the seller by the solicitor or, in England and Wales, a licensed conveyancer.

These are a set of standard questions about the property, boundaries, neighbour disputes and fixtures and fittings that will remain in the property. There may also be additional questions that the solicitor or licensed conveyancer thinks are necessary, such as the transferability of guarantees for any work done on the house, for example, a damp proof course; and from the Land Registry.