Offer accepted - how long is acceptable to sort out mortgage/soclictor?

littlesaint

Thanks for all the feedback. We have now come up with a plan. We are going to spend the weekend getting all our documentation scanned to create PDFs and put them into a file that we both have access to. This way if we are asked for proof of funds/ID etc, we can show it straight away.

On Wednesday morning I will call our agent to confirm that we are arranging the mortgage with the broker that day and will have the name of the lender and the solicitor by the following day. Hopefully that will satisfy the vendors that things are moving along.

AMO

jozbo wrote: »

Sorry to jump on your thread but we also had our offer accepted on Tuesday.
I have sent off paperwork to mortgage lender to be processed on weds. We are just getting a valuation with them and going independent for a homebuyers report.
Should I wait until the valuation has been carried out before booking te survey? Only I anticipate that if valuation comes out lower we may need to negotiate and sale could potentially fall through.

Dont want to pay out on HB report until sure the lender is happy (we have got to this stage before only for sale to collapse)
?

Hi Jozbo. A few things here worth pointing out. Your mortgage advisor will tell you not to do the Homebuyer report until the searches from the solicitors have come through. The argument being that if the searches come up with something you don't like, you'd have wasted your money. However, in reality, you should fire off your report the moment you have arranged your mortgage as you are committed anyway. In today's world, the risk is more the chain collapsing, so if you have already committed, get it done.

Just to confuse things further, A Homebuyer report (RICS Homebuyer Survey) includes a mortgage valution so they technically would be done at the same time. As the mortgage provider is likely to insist on using their own guys for the valuation, most likely you'll have bought the HB from them.

Final note: there are 4 types of survey (I'll mention the main 3):
a) Morgage Valuation Survey
b) RICS Homebuyer Survey (includes Mortgage Valuation)
c) Building Survey (used to be called a Structual Survey) (does NOT include a Mortgage Valuation Survey).

a) has to be done anyway.
b) is a list of tickboxes. If something is wrong, the survey will tell you something is wrong, but not where it is wrong, how severe and an estimate of the cost to fix. They will instead ask you to buy the Building Survey or get a specialist in. For example, if they detect damp, they won't tell you where it is or how bad it is or how much it will cost to fix. So essentially, this survey is a waste of space.
c) Building Survey - mortgage advistors will say that this will cost over £1000.

Now, heres the rub:
From a mortgage advisor:
- Homebuyer Survey is £600-650
- Building Survey is £1000-£1400

If you get a private surveyor firm:
- Homebuyer Survey is approx £300
- Building Survey is approx £350-£550

In every case, it is better to let the mortgage company do their own valuation survey and then privately get yourself a Building Survey.

It's usually first time buyers going through a mortgage advisor of a large organisation that buys the Homebuyer Survey.

Hope that helps!

robatwork

Wise words from AMO regarding surveys

jozbo

Hi Amo,
Thanks, that's very helpful. I was thinking of doing homebuyers (via RICS surveyor I looked up) as the property was built in the 70s.
However it has been poorly maintained, shows signs of damp and requires some renovation, so it sounds like a building survey would be the wisest choice. Quote I have is circa £600 (inc VAT).
Still thinking I'll wait until the valuation is back before paying for survey, as this is where i think the risk lies.
we are FTB's so we are not being rushed by a chain below us - not sure about the vendor's reason for releasing the funds, other than selling on the flat (due to divorce)

AMO

HI Jozbo, in your case then definately don't be rushed. Sometimes the reason why the mortgage advisor tells you to hold back is more to do with the fact that they offer a home move guarantee and have to reimburse fees if the sale doesn't go through. Therefore its in their interest to delay things until all searches are done.

However, in your case, it is better to take the advice and wait until each step of the process is complete.

In general most surveyors are unlikely to be concerned about properties built from the 80s onwards. Before that it costs a tad more and then gets more expensive as the property is older. It also gets more expensive as the property increases in size (e.g. a £300,000 property to be inspected will be about £100 more expensive than a £125,000 property).

£600 inc VAT sounds reasonable. Certainly more so than HomeBuyer survey quotes which are a bit outrageous.

Also, current market trends suggest that smaller properties depreciate more than larger properties and better areas maintain their value more. In essense, as you move towards the 'ideal family home' area, things get expensive.

The problem with flats recently are:
- the lease on them are shrinking.
- the service charge is rising:
http://www.thisismoney.co.uk/money/mortgageshome/article-2121235/Service-charges-putting-thousands-homebuyers-risk.html

If you ask around, most flats will have sold at a loss and many flats will be on the market for a loooong time.

Just make sure you've got a good price for the flat as that's a slightly more risky market to be in at the moment. If it helps, look for similar properties on Zoopla and see how long they've been listed on the market if they are still on. Also, many professionals get a valuation from mouseprice.com which is more accurate (even their free quotation compared to Zoopla and the other valuation websites).

Just one more thing....most of the time the mortgage valuation returned will be the same as the amount you have offered. Some will state 'close enough' - on a flat, I'd renegotiate based on that as this means you're paying above the market rate but not enough for the banks to be concerned about getting their money back.

jozbo

Thanks AMO, the flat is a split level maisonette with 3 beds and garden so a good size. We feel as far as can be predicted its 'futureproof' for us in terms of space for family etc.
Market is quite static in the area but I feel we've got it at a good price after doing plenty of research. Will go for surey later on then, ta

adindas

drummer_666 wrote: »

they'd be a bit foolish to take it off the market before seeing a decision in principle

seeing as it is now saturday, the next working day is wed, you will have sorted which lender you're going for thursday. Get him to email you the decision in principle and forward that straight to the EA.

That means you by Thursday the house will be off the market. Although other people that have viewed today, wed or even previously can still offer, at least it will be off the market Thurs.

Make sure the broker emails you the form Thursday morning too, so you can print it fill it in, scan it in and email it back so that he can submit the application the same day.

I wonder is it common to ask the vendor to take the property off the market after the buyer has got AIP and its offer is accepted ?

I mean what happen if in case, the buyer fail to secure a mortgage and in the meanwhile the vendor has lost the opportunity from another potential buyer during those time ?

Also as far as I am aware in England before the contract is exchange there is nor any legal obligation between the parties. So we should the vendor take it from the market ?