How do I make sure nobody else buys the property before I am in a position to offer?
This is done by “noting your interest” with the selling agent. When we do this the selling agent is made aware that you interest in the property is serious. In most cases therefore the selling agent is unlikely to consider or accept another offer without consulting us first to check whether you still want to offer. The selling agent is not barred from accepting another offer without advising us but in most cases this will not happen.
Do I need a survey?
No, in most cases a Home Report will be available for the property you are interested in and you should be able to obtain a copy of that from the selling agent. The Home Report provides a survey and valuation which should be adequate in most cases.
What is the significance of a “fixed price”?
Some properties are marketed at a fixed price. This means that the seller is indicating that the first offer received at that price should be acceptable. Of course there are many other conditions in an offer other than the price so again there is no guarantee that just because the price is OK the offer will be acceptable, but in the majority of cases the first offer submitted at the price asked will be successful.
What happens at a “closing date” for offers?
A closing date is fixed by the selling agent most commonly when it is known that two or more parties intend to submit offers. This means that all interested parties are invited to submit their offer at the same time on the same day. Although the system is not much liked by housebuyers it does has the advantage of ensuring that all parties are dealt with equally and fairly and that your offer is not simply being used to “talk up” another bid.
Usually the highest bid is accepted following a closing date, although the seller is not obliged to accept the highest offer, or indeed any offer.
What are “missives”?
Missives are the letters which will make up the contract between the buyer and the seller. They start with the offer submitted for the property. This is usually followed by a qualified acceptance as the seller will normally wish to amend some of the conditions in the offer or include conditions of their own. Once one party issues an acceptance to the other which contains no further qualifications the contract is concluded and is then binding on the buyer and seller.
What are “the usual searches”?
Broadly speaking there are two searches carried out, one against the title to the property and one against the property itself. The first is a legal search which usually comes in the form of a report referred to as a Legal report. This report discloses all the deeds making up or affecting the title and is needed to make sure that there are no deeds affecting the title which we do not know about. The report will also show whether there is any legal impediment against the seller which might prevent the seller passing on a good title to the buyer.
The search against the property itself takes the form of a “Property Enquiry Report” and is issued either by the local authority, or by a private firm from local authority records. This report shows whether the property has mains services, whether the road to the property is private or maintained by the local authority, whether the local authority has issued any notices or orders against the property, whether any current planning applications are likely to affect the property and so on.
In each case the report is provided by the seller.
What is a “Plans report”?
Yet another report which has to be provided by the seller. This is generally only needed if the title to the property has not already been registered in the Land Register (see below). When the sale will lead to the purchaser submitting the title for registration in the Land register for the first time a check is carried out to make sure that the boundaries of the property as described in the title deeds exactly match the boundaries as they are shown on the current Ordnance Survey map of the property. If there is a discrepancy between the two it may mean that there is a mistake in the title which needs to be rectified before the transaction can be completed.
When do I need to pay over my “deposit”?
With the exception of a brand new house being bought from a builder there is not usually a deposit payable when you by a house. The whole price is paid over on the date of entry.
Many people refer to the deposit as being that part of the price not being provided by the mortgage, or from the sale of an existing property. This needs to be with us a few days before the purchase settles to enable us to clear your cheque into our account.
Where the “deposit” is coming from the sale of an existing property it may be necessary to arrange a bridging account if the sale is completing after the purchase.
Is a bridging loan always very expensive?
A bridging loan may be needed if the funds from the sale of your existing house will not be available until after your purchase is due to settle. You may be relying on those funds to provide part of the price for the new house. A bank may provide a short term loan to provide these funds until your sale completes. Such a loan is called a bridging loan. This is more easily obtained where the contract for your sale is concluded and the completion date for your sale is therefore known and agreed. Most Banks will have an arrangement fee and will charge interest for the period of the loan.
Can I get a bridging loan when my existing house is not sold?
If you need to pay for your new house and your existing house has not been sold then unfortunately our Bank cannot supply a bridging loan. Because it is not known when the loan would be repaid such a loan would be referred to as an open ended bridging account. Whether your own bank will provide a bridging loan in such circumstances will be assessed individually. You should certainly not commit yourself to purchase a new property in circumstances where your existing property is not sold without checking with your Bank to see if the loan would be provided, unless of course you have sufficient alterative funds to complete the purchase.
Does the mortgage from my present house simply carry over to the new house?
No. Even if you are using the same lender, and borrowing the same amount, your existing mortgage has to be fully repaid when the sale is completed and a completely new mortgage is taken out over the new house.
How do I get the mortgage funds?
We obtain these for you. Your lender will send us instructions to complete the loan. As part of this we have to report to your lender that there are no problems with the title and we have to have security documents completed and signed by you. We also requisition the loan which will either be sent to us by cheque for by bank transfer. We cannot request the funds until we have these instructions from your lender and it is important therefore that your loan application is completed without delay to avoid problems later in the process. Our Financial Services department can help with this.
If I cannot complete the purchase can I get out of the contract?
No. Once the contract has been concluded it is binding on you. If you think there may be problems in settling the purchase let your solicitor know at the earliest opportunity. Contracts can take time to be concluded and if that has not been done you can withdraw from the negotiations without difficulty. If however, the contract is concluded penalties will be incurred if you cannot settle. Firstly, there will be provision in the contract that the seller can charge interest at a penalty rate from the date the price should have been paid. This will also apply if there is simply a delay in the price being paid. If the price remains unpaid after a period of time, usually specified in the missives, the seller may withdraw from the contract and resell the property. There will be provision to enable the seller to charge not only ongoing interest but also resale costs. And if the property is resold for a lower price than you were to pay you may have to make up the price also.
When can I collect the keys?
There is no definite rule on this. Most sellers will stipulate that the price must be paid by a certain time, usually no later than 2.30, on the date of entry. The keys must be available before the price is paid over but beyond that there is no strict timetable. If you do require the keys by a certain time of day therefore it is important that your solicitor knows that in advance so that we can take steps to ensure there is not a problem.