House Buying - Moneysaving Tips

kingstreet

PRIORITY86 wrote: »

I am buying a house that was built in 1955 but as had a side and rear extensions the surveyor as got back to my mortgage lender and said its a new build i am so confused as now they are saying the need 15% deposit how can this be when it was built in the 50s ??????? Plz help

How old are the extentions?

jezzthomaz

AndrewSmith wrote: »

1) Know Your Budget
Sounds obvious but there are buyers out there today who have no idea how much it is likely to cost them to buy a home, or what they can afford. Work out what you have coming in, and what you can afford to spend each month including all the household bills.

2) Know What You Can Borrow And It's Cost
This goes hand in hand with the above. If you aim at nothing, you will hit nothing. Visit or speak to a broker to establish what you are able to borrow, how it works, what's involved and how the costs will fit in with your monthly spending budget. This is the point at which you will know whether your plans are, in fact, do-able.

3) Get The Funding In Place
If taking a mortgage, get an agreement in principle or mortgage promise from the broker. This will be invaluable when you come to actually begin bidding on a property as you will be taken far more seriously by the agent and seller if your finances have already been agreed. Never forget though that an agreement in principle is only as good as the information you provide to obtain it. Be honest from the start and it will prove worthwhile. Make sure that you have the necessary funds inplace for the deposit, mortgage fees (survey etc) and, as I will move on to, the Legal fees.

4) Get 3 solicitors quotes and decide which one you will use in preparation
Get at least 3 solicitors quotes based on the figures and budget worked out with your broker. I always suggest 1 Local firm, 1 Distant firm, 1 online form. See how they compare but remember that cheap is not best. Paying a little more could make the difference between a swift trouble free transaction, or having a solicitor who leaves your case till 'tomorrow'. If yu have the solicitor firm in mind, it will benefit you again when bidding.

5) Make Yourself Known To The Agents
Call the agents on a regular basis. On the desk of every decent sales negotiator there will be a small index card box called his 'hot box'. This is a list of people, usually first time buyers who are looking for property and are ready to proceed. Your aim is to be at the front of his 'hot box'. This requires a certain amount of persistance on the part of you and your broker. Call the agents at least once if not twice a week. Ask if there are any new properties on their books, have any sales fallen through. Get your broker to call and tell the agents that you rmortgage has been approved (in principle) and you are now keenly looking to move ASAP. Don't however let your broker tell the agents how much you can afford. Keep the pressure on the agent to find you somewhere, once they know you are serious you will be the first one to get a call when they have a new instruction.

6) Finding The Property
Once you have found the property you like, never seem over eager to the agent initially. View it more than once at different times of the day. What seems like a quiet suburban street at mid-day can become a rush hour ratrun at 4.30. The first time you view will be with your heart, the second time will be with your wallet. On the second viewing make sure it is in the evening after the agent has closed. This will allow you to be unhurried and have the current owner on hand to get honest answers to the inevitable questions you will have. The remainder of this bit is, Im afraid, down to you as you are the only one who knows what you are looking for.

7) Pre Offer Information
Before considering what to offer you need to find out as much about the situation of the seller as possible. Find out if they have found a property. Is the chain above you complete and how long is it. How stable is the chain and how well established is it. Are there any other viewings booked or other offers on the table? Do you think there is any wor needing doing to it? Armed with this information you will then be able to present yur offer in the best possible light to the agent and seller. After all the name of the game is giving the seller what he wants, and that is allowing him to move upwards. It is not always about finances alone.

8) Submitting The Offer
There are many different schools of thought as to how much you should offer on a property. Never forget that the seller will have a level he needs to achieve to make his move possible, and that he will not have seen blistering increases in the value of his own property, which will reduce the available room for manouver.

This is where i personally take over for the buyer and begin submitting offers to the agent on their behalf. The offer must be presented confidently and with supporting information. Example:
" Mr & Mrs x have decided that the property 'x' is the one they wish to purchase. They have their funds in place with the mortgage agreed in principle, and are in a position to instruct a solicitor immediately upon the offer being accepted. They are in an excellent position and can close the chain above and get it moving swiftly. Bearing that in mind they wish to offer 'x' subject to the following conditions.
All future and current viewings are cancelled
The property is withdrawn from the open market immediately and they have exclusivity over it
The sold board goes up within 48 hours
They receive weekly updates on the progress of the chain.

An example of 'the norm' would be something like an asking price of £120,000 with your opening offers beginning at £105,000 - £108,000.

9) Know Your Limit
Always keep in mind the amount you are prepared to pay for the property. Increase your offers by small increments say £500-£1000 on a value as above. The worst they will say is no. This is the point where it is actually better to ask your broker to bid for you as they agent is then less likely to try to play any 'games' to increase the price. If you are offering yourself it is better to go into the agency office and place the offer in person. You are then more likely to actually witness the offer being put forward to the seller and there will be less likelihood for mis-trust. It also helps build rapport with the agent.



Andy

Thanks for the detailed info. I had contacted the London buying agents Propsavvy in purchasing my first home and they had taken it seriously and provided me a really great service. I had kept a pleasant relationship with the agent and they helped me climb the property ladder :A More over I could save the traditional property fees!hurrayyy

littleone50

Dear Andrew,

I have found all of your posts so interesting and would really appreciate your advice.

I am interested in buying a second floor flat on the market for 850,000 just came down in August from 925,000. It has been on the market since March 2012. There are two agents involved.

The flat in the opposite building (same size, first floor) was sold in March this year for 770,000...they renovated it and it is back on the market for 950,000 just marked down from 995,000. They are both leasehold with 50 years remaining and it will cost 150,000 for another 90 years.

The vendor bought the flat I am interested in for 185,000 17 years ago and the flat below it was sold for 599,950 at the beginning of 2011.
Zoopla states it is worth 706,000 (603,000-810,000).
Nationwide states 770,000

The estate agent (from a boutique) who showed me the property tells me they had an offer for 800,000 since they lowered it to 850,000 and it was rejected. I rang the other estate agent (just doing some research) and he said that they have had several offers at above the asking price but the owner is still deciding on whether to sell (It is one of those big agencies and I don't really believe him)

Question 1) Should I take your advice and offer 90% of the asking price 770,000? This is also closer to the market value estimates of Zoopla and Nationwide.!

Question 2) I am a first time buyer and don't need a mortgage, does this put me in a strong position? Especially as the lease is so short?

Questions 3) Estate agents can sometimes push vendors to overvalue properties. Is there any way that I can put my offer forward directly to the vendor?

With lots and lots of thanks in advance.

dan.copestake

Hi there,
My Fiance and I are in the market for our first house and have seen a new build property that fits the bill for us. It is valued at £220000. What would be a good opening offer.
We are in a position where we have a very substantial deposit, obviously no chain etc. Can move in ASAP. Have an agreement in principle with the bank and 3 solicitors lined up.
I was thinking of opening with £170000 as when we were shown around the property the sales woman informed us that a different house on the development that was listed at £259995 was sold last week for £217995. I am hoping they will accept £180000 or below as realistically this is about our budget (although we can borrow more if needed)
What do you all think?
Cheers
Dan

mark.1_2

I am going to share some useful tips which would be very beneficial for everyone.
Why is the vendor selling? Depending on the vendor's circumstances, such as deceased estates, liquidation and divorce, you may be able to negotiate a better price. Don't rely on the estate agent's word. Ask a neighbour.
How long has the property been on the market? If it has been on the market for a long time, it may indicate a problem with the house. If not, it may mean the vendor will be keener to negotiate on the price.

ussnooky

I wonder why people want to buy an expensive house when they can afford to build a new one for much less?

mingebag

chrisgreende wrote: »

I have never posted to a forum before and I hope you will forgive me if I get this procedure wrong. I have retired and will return from Germany soon and wanted to purchase a house in England. After many hours scouring the property sites I have seen a number of properties which interests me.

After submitting bids to the estate agents which were accepted, we engaged a solicitor and surveyor to proceed with the purchase. The estate agents informed us that they were legally obliged to market the property until contracts were exchanged because the banks had a duty to the Tax Payer. On both occasions however, we were gazumped by this practice of continued marketing costing hundreds of £'s.

In a free market I do not object to the practice of securing the best price, but I do object to the practice of accepting multiple offers which consequently costs those buyers who were unsuccessful a great deal of money.

Are the Banks treating its English customers as idiots or are they continuing to pursue corrupt practices to manipulate the market facilitated by the Government. In Scotland people can safely proceed with the legal and inspection costs once an offer has been accepted because once accepted it is binding and the buyer is protected from the "Art" of gazumping.

My reasons for posting this thread are two fold, firstly I would like to know if there are any mechanisms for widely publishing this practice thus warning others, and secondly if anyone knows of a method of reducing the legal and surveying costs if a buyer finds the Banks have gazumped them.

The houses you appear to be bidding on are repossessions. IIRC the agency acting on behalf of the mortgagees must take out a public notice inviting offers higher than yours until contracts are exchanged.

jong1978

khgibb wrote: »

With it being a new build there shouldn't be much that get's picked up in the surveys I woud have thought. Do surveys actually give you a real market value? I.e. if we had been in a bidding war for personal reasons and gone over the asking price and ended up paying more than it would be worth to most others, would a survey give you a rough guide to what it would normally sell for?

A RICS Survey providing a valuation of your house would indeed provide the surveyors opinion of Market Value. In most cases this would not consider a bidding war, but if there were clear indications of added value to the property via marriage value (i.e if you were a neighbour, and in owning both properties you had space for development for e.g 4-5 houses) then this would impact on market value. Or identify a special purchaser. But in most cases, the valuation will simply give you the surveyors opinion of how much the House would sell for between a willing buyer and a willing seller.

If you still need a survey etc, www .iSurveyor. com will get up to 5 independent surveyors to quote for the work, there is no obligation to use any of them. The search tool is free. I have just moved jobs and houses, so I feel your pain, I loved the idea of buying a new house, but the process takes the shine off it. Good luck.

SteveTurtle

Thanks Andrew Smith, i like your all points.

AndrewSmith wrote: »

Thanks Doozergirl, must learn to keep my mouth shut sometimes, a point that I am sure Martin himself will gladly welcome

So, how to sucessfully negotiate with an agent or seller on the property you want, and how to get it for the price (or as near to it) that you want.

Selling or buying a house is ranked amongst one of the most stressful things that one will do throughout their lives. Think about it, you are talking about something that will be where your family memories and possibly members will be born and will bear special meaning to different people. Needless to say it is an immotive time at best.

I do not have all the answers, no-one does as it will vary from property to property, and person to person.

What I can offer however are some tips that I have picked up and still use from the 8 years I spent sat as a broker in an estate agency office.

1) Know Your Budget
Sounds obvious but there are buyers out there today who have no idea how much it is likely to cost them to buy a home, or what they can afford. Work out what you have coming in, and what you can afford to spend each month including all the household bills.

2) Know What You Can Borrow And It's Cost
This goes hand in hand with the above. If you aim at nothing, you will hit nothing. Visit or speak to a broker to establish what you are able to borrow, how it works, what's involved and how the costs will fit in with your monthly spending budget. This is the point at which you will know whether your plans are, in fact, do-able.

3) Get The Funding In Place
If taking a mortgage, get an agreement in principle or mortgage promise from the broker. This will be invaluable when you come to actually begin bidding on a property as you will be taken far more seriously by the agent and seller if your finances have already been agreed. Never forget though that an agreement in principle is only as good as the information you provide to obtain it. Be honest from the start and it will prove worthwhile. Make sure that you have the necessary funds inplace for the deposit, mortgage fees (survey etc) and, as I will move on to, the Legal fees.

4) Get 3 solicitors quotes and decide which one you will use in preparation
Get at least 3 solicitors quotes based on the figures and budget worked out with your broker. I always suggest 1 Local firm, 1 Distant firm, 1 online form. See how they compare but remember that cheap is not best. Paying a little more could make the difference between a swift trouble free transaction, or having a solicitor who leaves your case till 'tomorrow'. If yu have the solicitor firm in mind, it will benefit you again when bidding.

5) Make Yourself Known To The Agents
Call the agents on a regular basis. On the desk of every decent sales negotiator there will be a small index card box called his 'hot box'. This is a list of people, usually first time buyers who are looking for property and are ready to proceed. Your aim is to be at the front of his 'hot box'. This requires a certain amount of persistance on the part of you and your broker. Call the agents at least once if not twice a week. Ask if there are any new properties on their books, have any sales fallen through. Get your broker to call and tell the agents that you rmortgage has been approved (in principle) and you are now keenly looking to move ASAP. Don't however let your broker tell the agents how much you can afford. Keep the pressure on the agent to find you somewhere, once they know you are serious you will be the first one to get a call when they have a new instruction.

6) Finding The Property
Once you have found the property you like, never seem over eager to the agent initially. View it more than once at different times of the day. What seems like a quiet suburban street at mid-day can become a rush hour ratrun at 4.30. The first time you view will be with your heart, the second time will be with your wallet. On the second viewing make sure it is in the evening after the agent has closed. This will allow you to be unhurried and have the current owner on hand to get honest answers to the inevitable questions you will have. The remainder of this bit is, Im afraid, down to you as you are the only one who knows what you are looking for.

7) Pre Offer Information
Before considering what to offer you need to find out as much about the situation of the seller as possible. Find out if they have found a property. Is the chain above you complete and how long is it. How stable is the chain and how well established is it. Are there any other viewings booked or other offers on the table? Do you think there is any wor needing doing to it? Armed with this information you will then be able to present yur offer in the best possible light to the agent and seller. After all the name of the game is giving the seller what he wants, and that is allowing him to move upwards. It is not always about finances alone.

8) Submitting The Offer
There are many different schools of thought as to how much you should offer on a property. Never forget that the seller will have a level he needs to achieve to make his move possible, and that he will not have seen blistering increases in the value of his own property, which will reduce the available room for manouver.

This is where i personally take over for the buyer and begin submitting offers to the agent on their behalf. The offer must be presented confidently and with supporting information. Example:
" Mr & Mrs x have decided that the property 'x' is the one they wish to purchase. They have their funds in place with the mortgage agreed in principle, and are in a position to instruct a solicitor immediately upon the offer being accepted. They are in an excellent position and can close the chain above and get it moving swiftly. Bearing that in mind they wish to offer 'x' subject to the following conditions.
All future and current viewings are cancelled
The property is withdrawn from the open market immediately and they have exclusivity over it
The sold board goes up within 48 hours
They receive weekly updates on the progress of the chain.

An example of 'the norm' would be something like an asking price of £120,000 with your opening offers beginning at £105,000 - £108,000.

9) Know Your Limit
Always keep in mind the amount you are prepared to pay for the property. Increase your offers by small increments say £500-£1000 on a value as above. The worst they will say is no. This is the point where it is actually better to ask your broker to bid for you as they agent is then less likely to try to play any 'games' to increase the price. If you are offering yourself it is better to go into the agency office and place the offer in person. You are then more likely to actually witness the offer being put forward to the seller and there will be less likelyhood for mis-trust. It also helps build rapport with the agent.



If you are seen by the agent as serious, they will take you seriously. If you overcome the potential problems such as cost, mortgage etc before you even look, again you will be seen as serious about buying.

Build a relationship with the agent who is selling the property you wish to buy. You want your name to be at the forefront of his mind when he is on his way to value a property suitable. This way you may even get to view it before it goes to the open market.

Once the offer is accepted it is then down to you to fulfill your side of the deal. Instruct the solicitor without delay and get your broker to submit the full mortgage application without delay.

A good broker / solicitor will hold your hand until the day you move in.

This is not a definitive guide and I will add to it when i think of more ideas. However the basic model is something that I have used with all my clients and has, until now, proved very successful.

Hope this helps and apologies for the length of the post

Andy

bestgym

I want to purchase home at USA. Can you tell me the best place at reasonable price. I'll wait for your reply.