House Buying

Whether it’s your first house or not, the house-buying process can be a little confusing. Our guide will take you through the process

Choosing a Property

The first thing you need to decide when you buy your first property is what sort of area you want to live in. Make a list of the things that matter most to you. These might include having a good school nearby, convenient local transport links and convenient shops or restaurants.

Next, you will need to decide how many bedrooms you want, whether you want to live in a particular area and whether you would prefer a house or a flat.

Bear in mind that bigger properties not only cost more to buy, but also normally cost more to heat and maintain as well. With this in mind, you may prefer to choose a newly built house, which should require less upkeep in the first few years. A bigger property also means a bigger Council rates bill.

You may never find one property that is absolutely ideal in every respect. Be prepared to trade off one factor against another as you look around. Here's a quick checklist . . .

  • Area
  • Distance to work and quality of local transport if required.
  • Quality of schooling if required.
  • Quality of local shops and restaurants.
  • Transport links (e.g. to visit friends or relatives).
  • Other important amenities (e.g. local parks or leisure options).
  • Type of property
  • Affordability
  • Will you be able to afford the heating, other maintenance and on-going costs including local body rates?
  • Are you looking for a flat or a house or a bungalow?
  • Are you looking for something old or new?
  • How many bedrooms do you need?
  • What is the size of the garden?
  • Does it have a garage?

Finding a Property

Once you have decided what sort of property you are looking for and the area where you want to live, contact as many local Real Estate Agents as possible. Ask them to send you details of suitable properties on their books on a regular basis.

If it is a competitive area where lots of people are looking, try to get to know one or two of the agents and make sure they are clear on what you really want. It’s worth calling the relevant estate agent once a week or so to ensure you get an early look at properties which have only just been placed with the agent. In this way, they will know you are a serious buyer and they will generally make the effort to contact you when new properties come up.

Once you get started, you will probably see a lot of different properties in a fairly short period of time. Keep a record of each one you have visited, together with a few notes reminding you of its good and bad points. Then you can look back on this list to check that you are still fulfilling your requirements in the properties you are viewing.

What Happens Next

Once you have chosen and applied for a mortgage, the lender will want some supporting documentation. The information your lender may require includes:

  • Evidence of your income and commitments, such as recent pay slips, tenancy agreements, family assistance and your last 3 months bank statements.
  • Evidence of your deposit
  • Proof of identitys such as Passport or Drivers Licence

If you apply for your mortgage through Mortgagesure, we will handle this documentation on your behalf and manage the process with the lender.

If you’re a first time buyer, you won’t have to worry about selling a property before you can move. But you will still need to find an experienced Solicitor to carry out the conveyancing on the property you want to buy.The job of a solicitor or conveyancer comprises the following tasks:

  • Obtaining the title which proves it legally belongs to the person you are buying from.
  • Researching just where the property's legal boundaries lie and passing this information on to you.
  • Advising you on a draft contract for sale, prepared by the seller's solicitor, setting out the terms of your purchase.
  • Carrying out a search of local planning information to uncover details of any upcoming developments, such as a new road, which could affect the property's value.
  • Agreeing a date for completing which suits both you and the property's seller.

Conveyancing may well take longer than you had imagined, but don't be tempted to rush matters. Your new home is probably the most expensive thing you will ever buy, so it is important to be sure there are no loose ends.

Making an Offer

Once you have found a property you would like to buy, the next step is to make an offer, normally through the Real Estate Agent. Most sellers build a certain amount of leeway into their price, so it is usual to offer less than the seller is asking, but this all depends on how competitive the market is and if other people are interested.

In deciding what you are prepared to pay, bear in mind things like the property's state of repair and how much you would have to spend on building work or redecoration.

Your first offer might be up to 10% below the asking price. It is then up to the seller to either accept that price, or try to negotiate a higher one. If there are several potential buyers interested in that particular property, the vendor may have enough bargaining power to insist that his or her full asking price is met. Indeed, in a strong market, the property may sell for a price in excess of the asking price!

If you know that many people will be interested in the property (perhaps because good properties of that type are scarce in the market), and you are very keen on it, you might consider offering the asking price up front to avoid a 'bidding' war.

Once your offer has been accepted, the estate agent will confirm this in writing. You can then go ahead with arranging a valuation, LIM report and finalising your mortgage arrangements.

WHAT’S A LIM, REPORT AND DO YOU NEED ONE?

A LIM report is a Land Information Memorandum report. Before you complete a purchase on a property you would be advised to purchase a LIM report from the local council. The LIM report informs you about the property and you can make sure everything regarding the property is correct and that there are no unauthorised buildings on the site.

The LIM report also contains all permits, consents, code of compliance and other relevant information pertaining to the property. A LIM report costs different amounts depending on the council it is purchased from. It is worth obtaining one before making your purchase as it may give you a bargaining advantage you did not know you had.

If you are relying on a mortgage to complete the sale, your offer needs to be subject to finance (conditional offer). The finance condition is required to be satisfied on or before the finance date. Normally this is three weeks from the date of signing the sale & purchase agreement.

Requesting a Valuation

Once your offer has been accepted, a valuation done by a Registered Valuer might be required to assess the property's condition and value.

In almost every case, we recommend strongly that you get a more detailed report on the condition of the property to protect not only your lender's interests, but your own as well. When you view the property yourself, look out for any signs of problems like cracks or damp patches so you can point these out to the Valuer later for him to inspect properly.

Where the valuation does reveal serious problems, you are free to withdraw your offer. If the problems can be fixed, you may be able to use the valuation results to negotiate a reduction in the sale price to compensate you for this extra expense.

Final Approval

With your valuation and any other conditions completed, you can move to the stage of getting a formal mortgage offer (un-conditional approval) from your chosen lender, which will detail all the conditions of the loan. Read this carefully and get your solicitor or your Broker to explain anything you do not understand.

Once you have signed this contract as un-conditional, there is no going back, so be very sure you are happy with all the sale arrangements before you commit yourself.

Typically at Finance date, you will have to put down a deposit as stated in the sale & purchase agreement. You also need to make arrangements that the building is to be insured from settlement date, as you are now legally obliged to buy it.

Why not use our insurance services? We will obtain quotes on your behalf and on your acceptance; we will arrange a cover-note to be sent to your Lawyer.Check that:

  • Your solicitor has completed all the local searches.
  • The valuation report and any other report is complete and accepted by all concerned.
  • You have a formal mortgage offer in writing, which you have read and understood.
  • You have the agreed deposit available.
  • You have agreed a firm completion date for the sale, and this date is noted in the contract.
  • There are no outstanding issues remaining to be settled between you and the seller.

The last point is very important. For example, there might be some doubt as to whether the property's existing carpets are to be included in the sale price. You need to get this sorted out in writing before you sign the contract.

Completing and Moving In

All that remains after exchanging contracts is to pay over the money needed to buy the property on the settlement date, less any deposit already paid at un-conditional date. Your solicitor will get the mortgage funds direct from the lender and the remainder (if any) from you, and then pass it all on to the seller's solicitor. Once payment has been confirmed, you can collect the keys to your new home from the estate agent.

As soon as you know your completion date, book a removal firm if you need one and make sure they are prepared to provide the level of service you need, e.g. pack your belongings as well as transport them.

Allow yourself plenty of time to sort out all your things before the removal men arrive. Decide what is going where in your new home and label each container with its contents and the room where you want it to go. Remember to pack important items - such as the kettle - where you will be able to find them quickly and easily.

In the last week or two before the move, contact the companies that supply your gas, electricity water and telephone services to let them know you are moving out (if you are currently renting or own a property). Ask them to arrange for the meters in your old home to be read so that you do not end up paying for services the next occupant uses. You may also want to ask the Post Office to redirect your mail for a while.

Congratulations!

Finally take a moment to relax and appreciate your new home, and all the effort that has gone into purchasing it. Invite your friends over to appreciate your new home. And, of course, tell them about Mortgage Sure.