The Agony and the Ecstasy!
Buying your first home can have more ups and downs than the average fairground rollercoaster. The process can seem fraught with difficulties and obstacles, all of which stand between you and your dream purchase. The challenge is not to let you heart rule your head. Your house is likely to be the single biggest purchase you ever make. Do not allow that purchase to be your biggest mistake as well. This article looks at some of the legal and practical considerations to bear in mind in relation to 5 common occurrences.
- There are defects I did not know about
If you are buying with the aid of a mortgage, your lender will want to be satisfied that the property is worth what it is lending (and some more) to ensure that its investment is safe. A valuation is likely to be required by the lender to that end. It is possible, however, that the valuation for mortgage purposes is unconcerned with things that might affect your decision to buy. For instance, those windows which looked ok on a sunny spring day, might leak wind and rain in a northerly gale. Or the central heating, which was not on when you visited, might not work. Either of these might be expensive to fix, and if you buy the house, you might not be able to get the work done short term.
The answer is to make sure that you get your own checks and reports done and do not rely simply on the mortgage valuation report.
These checks can take many forms, such as a structural survey, a gas/electrical installation survey, a damp/dry rot check. Not all will be required in any given case. If you are in any doubt about whether or not to have these, speak to your solicitors who will be able to give you guidance. In the end, although it may sound trite to say it, “buyer beware” does apply even to a property purchase to some extent. If in doubt, check it out!
- My mortgage offer has been refused
Unfortunately you may have little or no control over this, but you can help to manage your expectations by checking with your chosen lender BEFORE looking for a property and by getting a provisional offer before your heart is set.
A provisional offer might not convert to a formal one but at least if you get one it reduces the risk of a nasty surprise.
- I’ve been gazumped
This legal but morally reprehensible practise still prevails. This is the process whereby the vendor suddenly decides to sell to someone at a higher price, even if you are at an advanced stage of your purchase. In practical terms, if he takes that step there is not much you can do as a contract is unlikely to exist and no remedy is likely to lie.
You can, however, protect yourself against the risk of it occurring. For instance
3.1 ask the vendors to take the property off the market once your offer is accepted
3.2 make sure your finance is in place early
3.3 build a relationship with your vendor. It may sound obvious but if your vendor becomes “a friend”, it is less likely that he will willingly upset you. Keep the vendor informed of your position. Be positive but do not mislead him or give him unrealistic expectations.
- I thought I was buying in the countryside, but now I find that a new housing estate is to be built next door
It could just as easily be a new road, new rail link or even a fracking site.
If there is any suggestion that any such thing might be in the offing in the near future, get your solicitors to check it out. An extra £100 or so spent on additional searches now might save you a lot of heartache later.
Using a local solicitor is also a possible advantage here. Chances are he/she will know the area/the property/the development plans and be able to tell whether this might be a concern for you.
- The legal fee I was quoted has quadrupled from what I was expecting
Cheap rarely means good. As with any service, you generally get what you pay for. Often the headline figure that you see quoted is only part of the story.
A low quotation will be given to get your interest and involvement. A number of ‘extras’ will then find themselves onto the final bill.
To help avoid this from occurring, if you get several quotations make sure that you ask for and in each case get for a quotation for the whole transaction and then compare the final figures.
Make sure the figures include VAT (which soon increases the total) and all out of pocket expenses (or disbursements as solicitors grandly call them). Land Registry fees, stamp duty, search fees, even bank charges can all take you by surprise if these have not been covered in your solicitor’s quotation.
There are, of course, other things that can go wrong. Equally there are never any guarantees that, however careful you have been, nothing will go wrong.
What you can do, however, is to minimise the risk and a good solicitor will not only make sure that you ultimately own your dream house, but will also help you to smooth out the peaks and troughs of the rollercoaster ride with practical guidance as well as solid legal advice.