Ok, I'm American and our homebuying contracts are different but are they better?

Britwife

Eventually we would like to buy a house here but it's a bit scarey reading some of the things that go on with contracts and such here.

In the states, bascially when you put in an offer to buy a house, it is a contract. The house is removed from the market and it's pretty much yours. The offer sheet has some protection such as you can get out if the interest rate is much higher than expected. (it is slightly inflated and is based off your credit history) and if there is more than a certain amount of money invloved in faults found by they survey. We normally have the closing in about 30 to 60 days. In the meantime, you have your inspections done. At the closing, all the attorney fees are paid and the mortgage is drawn and all lose ends are tied and you get your keys. The only money spent up to this point is $200 or so for an inspection and a small deposit on the house (ours was $500 but you would get that back if you needed to pull out due to the interest rate or faults went over what was on the contract.) You wouldn't get it back if you just pulled out but I believe its quite difficult to pull out anyway.

Now for what I get over here is that when you put an offer in, the house can remain on the market to try and get higher offers, the seller can remove it and say it's no longer for sale, a load of things can happen and you end up with a lot of out of pocket expenses and you'll never get those back.

What are the expenses incurred when buying a house here? I take it from reading here, it's tough luck if something happens.

Is it better to have the house buying process the way it is here or are you more protected in the states? I've never had to deal with the process here. What's your take on how things are done? Are you happy with the process here? Pros/cons?

Just trying to learn more.

maninthestreet

Britwife wrote: »

Eventually we would like to buy a house here but it's a bit scarey reading some of the things that go on with contracts and such here.

In the states, bascially when you put in an offer to buy a house, it is a contract. The house is removed from the market and it's pretty much yours. The offer sheet has some protection such as you can get out if the interest rate is much higher than expected. (it is slightly inflated and is based off your credit history) and if there is more than a certain amount of money invloved in faults found by they survey. We normally have the closing in about 30 to 60 days. In the meantime, you have your inspections done. At the closing, all the attorney fees are paid and the mortgage is drawn and all lose ends are tied and you get your keys. The only money spent up to this point is $200 or so for an inspection and a small deposit on the house (ours was $500 but you would get that back if you needed to pull out due to the interest rate or faults went over what was on the contract.) You wouldn't get it back if you just pulled out but I believe its quite difficult to pull out anyway.

Now for what I get over here is that when you put an offer in, the house can remain on the market to try and get higher offers, the seller can remove it and say it's no longer for sale, a load of things can happen and you end up with a lot of out of pocket expenses and you'll never get those back.

What are the expenses incurred when buying a house here? I take it from reading here, it's tough luck if something happens.

Is it better to have the house buying process the way it is here or are you more protected in the states? I've never had to deal with the process here. What's your take on how things are done? Are you happy with the process here? Pros/cons?

Just trying to learn more.

Yep, until contracts have been exchanged, either party can pull out of the
sale without any liability to the other party. The current government took 10 years looking at how to improve the house buying/selling process, but all they could come up with is HIPs. Your way sounds better to me, but maybe there are shortcomings that aren't obvious from your brief description.

ckerrd

The system is somewhat different in Scotland and legally binding at an earlier stage but I assume you are buying in England/Wales?

Richard_Webster

Presumably in the States they have some equivalent of Planning Permission and Building Regulations. What happens if the property doesn't have the right permissions? Or there's no legal right of access to it?

princeofpounds

Yep, you pretty much have it right and our system has some serious deficiencies.

Mind you, there are other positives. I understand for instance that it is normal to employ a real estate agent in the US even if you are buying, but I've never been able to figure out what the point of that is for the extra layer of commission. Perhaps property sale data is less easy to obtain than in UK so you need someone who can help you value a place?

Blackpool_Saver

very interesting post, I have a friend in Chicago who has just purchased a house and I am amazed at the difference in the way it is handled.

Britwife

We do have building regulations and you're not allowed to build without a permit and I believe there is a final inspection as well.

I'm sure there are shortcommings anywhere. There are forms that have to filled out for any disclosures and if found later and not listed you can come back to fight it.

We had put an offer on a house and in that contract we listed that we had to get a certain rate or less and no more than $2000 worth of faults. When faults are found, it's a negotiation of if the buyer will pay to fix, fix it themselves or lower the price. Our inspection came back with some bad structural damage and rot and a higher rate so we were able to pull out and went for another house that went through without a hitch.

Soot2006

Sounds like there is greater buyer protection in the states then ... Isn't there also limited liability in cases of repossession?

fisrtimebuyer

Britwife wrote: »

Eventually we would like to buy a house here but it's a bit scarey reading some of the things that go on with contracts and such here.


Now for what I get over here is that when you put an offer in, the house can remain on the market to try and get higher offers, the seller can remove it and say it's no longer for sale, a load of things can happen and you end up with a lot of out of pocket expenses and you'll never get those back.

What are the expenses incurred when buying a house here? I take it from reading here, it's tough luck if something happens.

Is it better to have the house buying process the way it is here or are you more protected in the states? I've never had to deal with the process here. What's your take on how things are done? Are you happy with the process here? Pros/cons?

Just trying to learn more.

ok ifs its a repossession (and not all banks request this) the house/flat has to stay on the market after you offer has been accepted up until exchange of contracts. (Buying a repossession isn't alot of fun)

If its not a repossession just a normal house for sale and they have accepted your offer most people will agree to take it off the market... some people will try and under cut and offer a higher bid to the seller.
However if your using a reputable estate agent, once its under offer (ie they have accepted your offer) they wont show anyone else around (this does not always happen .. there will always be some).
But yes either side can pull out till a certain point.
As for expenses .. all I can advise is there is a a lot of hidden costs, legal fees/building searches, my total fees came out at £800, but I have known this to be alot higher. My advice get a online convancer, so much easier if you are traveling, as you can track the progress of all the stages of the buying process online. I have to say the one im using is great, having said that Im using a broker who is a complete pit-bull, I doubt they would dare to mess around.

From what you said the process seems quite simple in the states... over here well... don't expect simple

Hope that helped