FTB dilemma re making offer, mortgage, etc!

ferox666

I am in a worry over a property I really want but am unsure how to go about things, not had any experience with estate agent procedures (other than viewings) or property purchasing. Basically my situation is:


First time buyer, have 25% deposit and considering viewing a property for "offers over" £120,000. Based on my research of other sold prices in the area and fall in house prices since peak etc I do not think it is worth more than £115k so would not pay any more than this and anyway couldn't afford to stretch the extra £5k even if I wanted to (already a slight struggle to pay £115k).

I have not applied for any mortgage and do not have a solicitor arranged. I'm confident with my 25% deposit and a mortgage that would be 3.5-4 times income, plus good credit rating etc that I wouldnt have a problem with mortgage.

My plan is to arrange to view the property, and if happy with it try to buy for £110k - £115k (despite the "offers over"). I am in Scotland (I think there are some small differences between scottish & english procedures regarding offers?). My plan would be to obtain copy of the Home Report after viewing, but my problem is then how could I communitcate an "offer" of £110k - £115k without survey or even mortgage funding in place? - I dont want to obtain mortgage first in case the seller wouldn't sell for £115k? Is it normal to just ask outright if seller would accept say £112k (and if not haggle up to £115k) and that if so I would be interested in getting survey done and considering offer? (and i could then organise solicitor/mortgage). Basically I'm wondering if seller would committ to "agreeing" to the lower price without any firm offer in place in return and if it's a vague "he may consider it", then where am I left if i have mortgage and solicitor in place and then the seller rejects £115k anyway? I want to know he will accept £115k before applying for mortgage...I did also wonder if fact I am not in a chain could help to my advantage, is that a common problem in current market, chains/delays? I would try emphasising this.

Finally regarding the mortgage, I'm aware mortgage brokers can get good deals but I have a friend who said he found a cheaper rate when searching himself online than the best one the broker offered. I have seen a good mortgage myself online with a good interest rate & fix, is there any downside just applying for this myself and not bothering with broker? I'd have done thorough online searching myself to make sure a good deal. I'm aware broker also helps complete form but I am very comfortable with doing this myself and my OCD would prob rather do myself so I can make sure all the correct info going on anyway! Is there any other reason/advantage to use broker? I do wonder though how I go about providing proof of income, payslips bank statements etc if it's just an online application to the bank? or does it needed to be through the solicitor?

Again, sorry for the perhaps silly questions! Just worried as I really want this property if can get for the right price and want to be able to act quickly if viewing confirms it's ok, but as I said am inexperienced in these matters!

Fire_Fox

I'm no expert on the Scottish system but you sound like you are English and don't understand the differences at all. Have you done any Googling? There must be sites walking you through the process. Sorry to be harsh but MSE is not a hand holding site, it's there for when you get stuck not to baby you through and answer the most basic of questions.

Get a mortgage in principle from your chosen lender, see an independent mortgage broker for this. Get quotes from solicitors and have one on standby. You can't apply for a mortgage until you have a specific property to borrow against. Both broker and solicitor will be able to help you with the 'hows' of proving income and when to place and offer, you answered your own question when you queried the purpose of them.

Research land registry sold prices for the area, for sale prices are not an indication, AFAIK in Scotland offers over really does mean offers over, in some cases massively over. Also AFAIK you put a formal offer via a solicitor and it is legally binding, you only lodge a note of interest with the agent or vendor, it seems to me very different to the English system not small differences.

ferox666

Fire_Fox wrote: »

I'm no expert on the Scottish system but you sound like you are English and don't understand the differences at all. Have you done any Googling? There must be sites walking you through the process. Sorry to be harsh but MSE is not a hand holding site, it's there for when you get stuck not to baby you through and answer the most basic of questions.

Get a mortgage in principle from your chosen lender, see an independent mortgage broker for this. Get quotes from solicitors and have one on standby. You can't apply for a mortgage until you have a specific property to borrow against. Both broker and solicitor will be able to help you with the 'hows' of proving income and when to place and offer, you answered your own question when you queried the purpose of them.

Research land registry sold prices for the area, for sale prices are not an indication, AFAIK in Scotland offers over really does mean offers over, in some cases massively over. Also AFAIK you put a formal offer via a solicitor and it is legally binding, you only lodge a note of interest with the agent or vendor, it seems to me very different to the English system not small differences.

Thanks for response, im not english but a lot of info i read related to english system. I did try googling and have tried citizens advice who werent much help at all. I did not want to get mortgage in principle yet in case seller not interested in my aimed price as it could be months before another property comes on that i like. Perhaps will find solicitor and speak to them but did want others opinions and advice not hand holding as you eloquently put it! As i said i have zero experience with this.But do appreciate reply.

Fire_Fox

ferox666 wrote: »

Thanks for response, im not english but a lot of info i read related to english system. I did try googling and have tried citizens advice who werent much help at all. I did not want to get mortgage in principle yet in case seller not interested in my aimed price as it could be months before another property comes on that i like. Perhaps will find solicitor and speak to them but did want others opinions and advice not hand holding as you eloquently put it! As i said i have zero experience with this.But do appreciate reply.

Why don't you want to get a mortgage in principle? That is your calling card showing that you are serious. If it's months and your MIP expires you just get another one, they don't cost anything except time.

Is none of this any use?
http://www.adviceguide.org.uk/scotland/housing_s/housing_buying_and_selling_s/buying_a_home_scotland.htm
http://www.scotland.gov.uk/Resource/Doc/1035/0015263.pdf
http://scotland.shelter.org.uk/get_advice/advice_topics/finding_a_place_to_live/buying_a_home
http://www.consumerfocus.org.uk/assets/3/files/2009/11/MovingHome.pdf
http://www.your-move.co.uk/scotland/buying-process
http://www.moneysavingexpert.com/mortgages/house-buying-guide

outdoorcjc

Get your agreement in principle for the mortgage first, this will confirm that you can borrow enough for this house, nothing worse then going through the viewing, making an offer etc and then finding that you can't actually afford the house you've just set your heart on.

It also shows the Estate Agent and Vendor you are serious and proceedable and therefore they are likely to take you more seriously in return.

If you apply on-line or over the phone as I did, I suspect you will still be sent a paper application form to sign and send paperwork in support of your income etc, that's how the process went for me.

Good luck with the process.

kingstreet

If this is a straightforward 75% LTV case with normal income, outgoings and credit history, you shouldn't need a broker. Many products are direct-to-lender and a broker can't access them and can't arrange them for you.

I would check with a broker that he can't obtain anything better and you have looked at all the appropriate angles.

I do this all the time and if, at the end, I'm unable to provide a better product or service, we'll part on good terms so you feel you can come back to me later, perhaps for a remortgage...

Use https://www.unbiased.co.uk, switching off the "sponsored ads only" option, so you get a full list of independent and whole market brokers for your area. Better still, if you have friends or relatives who can give you a recommendation try them. Avoid estate agency advisers working for the large chains. They mostly work to a limited panel and are targeted for practically every other service they can sell as well as the mortgage.

scottishblondie

As a Scottish person who has recently bought:

Get an agreement in principle with a mortgage lender now. They can take a lot longer than you think too come through. The lender may also only want to deal with certain firms of solicitors, so this is a starting point for finding a solicitor too.

Get the home report before you view. You can then look at any issues highlighted when you are at the property.

You can speak with the agent/vendor regarding what they would find an acceptable offer, but you wil need a solicitor to make the formal offer.

Good luck.

ferox666

Thanks all for the advice - I will look into mortgage in principle.

I'd previously been advised not to do this as some of the options would only be valid for 60 or 90 days and it may take longer than that to find something i want to offer on - has certainly been the case so far! But seems this is best way to go - thanks again

ferox666

Oh dear. the provider with best rate only offers a mortgage in principle valid for 30 days....

Kayalana99

ferox666 wrote: »

Oh dear. the provider with best rate only offers a mortgage in principle valid for 30 days....

You can't make an offer without it im afaird...they wont even consider you if you don't have one.

Go for it, dont worry to much about the 30 days end day if you have one agreed at least you know thier are no problems and shouldn't have to much of a problem extending it.

Edit: You havnt viewed yet...wouldnt hurt to look round to see if you want it, you could always 'discuss' price with EA to see if they are willing to drop below 120k and find out where the seller is at before getting MIP you might find they flat out refuse.

They wont accept an offical offer tho till you have one.

Fire_Fox

ferox666 wrote: »

Oh dear. the provider with best rate only offers a mortgage in principle valid for 30 days....

So? You just get another MIP if you need it in four to six months. I really don't understand why you are so anti this when everyone is telling you it's the way forward, who has been giving you these dire warnings?