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House buying & selling tips

Buying a house

Lending

First go to your lender and see how much you can borrow. This allows you to know what you can bid on. You can borrow three times your yearly salary; sometimes a lender will allow you borrow more depending on your circumstances. Most buyers put both savings and profits of selling a previous property into the deposit for the new property although 100% mortgages are available. There are many special deals for first time buyers, lenders are keen to attract new business.

Budget for additional work

Budget for improvements and alterations and include this in your budget for buying a property after viewing and surveys. The surveys should give a guide to what needs to be done and an estimated cost.

Bidding on a house

Never offer higher than a house is worth for three reasons:

  1. You may get objections from your lender.
  2. You may lose money when you re-sell.
  3. Negative equity in future years if you stay. The housing market may not always be as good as when you bought.

Negative equity

Some houses (like new build houses or houses in remote areas) may lose equity and you end up having a mortgage of more than the market value of your house. You want to buy a house which goes up in value each year at least by inflation. This sounds obvious but many people end up with negative equity. Just because you love your house does not mean that the public will in the future.

Conveyancing

How long do you have to sell your property? If you want the full price for your house be prepared to wait for the right buyer. If you want to sell within a timescale you may want to lower the price, or even offer a fixed price for your home. Consider multiple simultaneous ways such as selling-online, estate agents or independently. Find the right balance for your circumstances.

Estate Agents and Private Sales

Estate Agents cannot by law disclose what offers have been made for a property before the closing date, whereas in a private sale the seller can reveal the amount of rival bids if they wish.

Mortgages

There are so many lenders, so it pays to shop-around, buying online could save you money. Lenders are especially keen to attract new business and first time borrowers are usually offered attractive deals with an eye to future lending.

You should tailor your mortgage to suit your finances and plans for the future. Most lenders will offer many options and even a combination of any of the mortgage types listed below. It's is in the lenders interest for borrowers to be locked into a mortgage for a fixed term, so consider your options carefully before agreement as you may lose out by changing the terms of your loan at a later date. Lenders will usually offer attractive rates for this kind of locked in mortgage. As always, find a good financial adviser as they can worth their weight in gold.

House buying tips

Viewing
Ask questions regarding neighbours, flood damage, the length of time a house has been for sale and the reason for the sale. Sellers are legally bound to inform any prospective buyer of troublesome neighbours and a history of flood damage to the property.
Gazumping
This strange term is where the seller accepts your offer then accepts a higher later offer. Be sure to ask for a written agreement, the property to be taken off market and pay a deposit. Only when the buyer has signed a missive will this be legal. A prospective buyer can back out before this. Remember, a verbal agreement cannot be relied upon. Bidder vetting by your estate agent can resolve this problem.
Mortgages
It pays to shop-around, buying online could save you money. Lenders are especially keen to attract new business and first time borrowers are usually offered attractive deals with an eye to future lending.
Financial advice
Be sure to find a good financial adviser as they can worth their weight in gold.
Location, location, location
And last but not least remember the important saying, location, location, location. Especially if the property is an investment which will be sold in the future for maximum profit.

House Selling Tips

Check for defects in property that may cost you money at a later stage such as: asbestos, drainage, subsidence, structural, damp, dry rot, bugs and botched alterations.
Mortgage lenders insist on at least a basic valuation survey (see below) before lending any money towards the cost of a house.

Types of surveys

All lenders require that a basic valuation is carried out to ensure that they are not lending more than the property is worth. This is compulsory. Costs can vary between 100 to 250.
The Homebuyers report / Basic Report is more detailed and for buyer rather than lender. This costs 200 to 500 and covers basic maintenance, structures such as the roof, walls and any other parts of the house that may require work. This should take 1 or 2 hours depending on the size and condition of the property.
Building Survey / Full Structural Report - Recommended for older properties. This could cost from 500 to 1000. It will take up to a day to complete and a few weeks to issue. This report will be much more detailed than the Homebuyers Report and cover all visible features and foundations.
Single survey scheme (Scotland) - The property is surveyed once, and other parties can buy into it. This scheme was introduced in some test areas of Scotland in March 2005.
Buying chain (England and Wales) - The buyer can hold off until they have sold their property before the contract is completed, or the seller can hold off until they have bought their new property. Careful consideration should be made before accepting an offer as there is a risk that you could be left with no house, or two houses!. Buyers should be vetted for integrity and financial situation.
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