Buying A Property
The process of buying a property is, some would argue, over- complicated and fraught with difficulty. This is mainly due to the fact that two parties, although entering into a verbal contract, can in fact back out of the deal at any time before contracts are exchanged. The introduction of Home Information Packs on the 1st June this year, is designed to make the process more transparent but more on that later.
So the process goes something like this; you register with a number of estate agents and they will take you to see properties which may suit your budget and general criteria. Once you see a property you like, you then make an offer based on what you think the property is worth. Generally at this stage, there is a bit of negotiation but once your offer has been accepted then you involve solicitors or licensed conveyancers, a mortgage provider who will then instruct a surveyor and of course the estate agent to guide the deal through.
Conveyancing includes determining what exactly you are buying, what is included, carrying out local searches to make sure that a road is not going to be built through the middle of the property or there is nothing else adverse about the local area. Most importantly the solicitor will establish that the seller (or vendor) actually owns the property!
Estate agents are there principally to act on behalf of the owner. However they will try to assist both parties to get the deal done. If the sale does not go through then agents do not receive a commission so clearly it is in their interest to see it through. Vendors are not obliged to disclose any problems with the property although they cannot lie in answer to any questions put to them. Agents are bound by the Estate Agents Act and Property Misdescriptions Act amongst others so they and their company have to operate within quite strict and ethical guidelines.
One of the horrors of this process is that whilst you are going through it, any other buyer can come in and make a higher offer. This process is known as gazumping, sometimes blamed on the poor agent but in actual fact agents are legally obliged to pass all offers on to the vendor. There is little you can do about this but to minimise the risk, you can ask when you make the offer for the property to be withdrawn from the market (although clearly this will not stop anyone who has already seen it). If you have established some kind of decent relationship with the vendor and have not fallen out by arguing over fairly minor points then this will establish some kind of commitment between the two parties.
The surveyor is appointed by the mortgage provider and is there to ensure that the mortgage provider (or mortgagor as it is technically known) is lending against a property which is worth what you thought it was when you submitted your offer and to ensure that it is in good condition.
The worst part of buying is being in a ‘chain’. This means exactly what it says. Unless you are a first time buyer, your purchase will be dependent on someone buying your property first and the person that you are buying from may be relying on your money to buy his or her next place. Often something can go wrong several links down the chain which can then mean that your dream home is no longer a reality. Again, the estate agent’s job is to try and hold all this together.
Once everything is in place, your solicitor and the vendor’s solicitor will then exchange contracts, which now means that you are obliged to purchase the property. This is usually done with a deposit of 10% but sometimes it can be less. The exchange of contracts will then contain a completion date, which is when the monies are transferred from the mortgage company via solicitors to the vendor and the sale is complete.