England Buyers' Guide

Introduction

You have decided to buy a home - but what next?
The maze of legal work, negotiations, dealing with surveyors and solicitors, finding a good mortgage deal and worrying about your deal falling through, on top of actually hunting down the home of your dreams, is enough to make anyone's hair stand on end.

Buying a house is one of the biggest financial decisions that you will make in your life. It is a lengthy and complicated business, which while exciting is often fraught with stress and worry. But luckily there is a lot of good advice around helping you to make your home-buying experience as easy and problem-free as possible.

After finding a home you like, which can take anything from a few days to many months, the process from having your offer accepted to completion of the sale takes about 12 weeks. This is about twice as long as in many other countries - home-buying in Britain is a notoriously drawn-out business.

It is important to have a good understanding of the process as it will help you to avoid some of the most common hazards of home-buying. Home.co.uk has prepared an introduction to the home-buying process to help you to understand how it all works, how to plan it and what to watch out for. After reading this you should have a better idea of what to expect and how to set out to buy a home feeling prepared and ready to go!

The Buying Process: A Step-by-Step Guide

Home Buying Guide: How Much can you afford?

Before looking at properties, you should consult a lender or mortgage adviser as to what your maximum possible loan would be. This will be based on the size of your deposit and how much you earn.

All buyers need to put down a deposit on the property - a mortgage lender will rarely pay the whole price of the property. You should try to put down at least 5 per cent of the value of the home as a deposit, and more if possible. The smaller the deposit you put down, the more your lender will charge you for the extra risk. Most mortgage lenders charge a 'mortgage indemnity guarantee fee' (MIG), or a fee for loaning a higher percentage of the value, on bigger loans. If you do not have enough money for the deposit, for example if your house is not sold yet, it is possible to get a 'bridging loan' from your bank, which will be repayable on the sale of your house.

Lenders will usually lend up to three times the size of your annual income, though some will lend up to four times your income. If you are buying as a couple, this increases to either three times the first income plus one year of the second income, or two-and-a-half times your joint income. Work out which way would allow you a higher loan and find a mortgage with which you can get a joint income allowance which suits you. Your lender may contact your employer to confirm your income, or if you are self-employed and taking out a self-cert deal you may have to supply proof of your income.

The key to successfully gaining a mortgage approval is not only having a large deposit but also being a low risk level in the eyes of lenders. Check your credit score through credit referencing agencies. Make sure any missed payments you may have forgotten about are addressed.

Home Buying Guide: The One-Off Costs

Arrangement Fee

A fee charged by lenders to cover the cost of setting up the mortgage. Some lenders waive this fee.

Lender's Valuation (Basic Valuation)

All lenders require a valuation of the property to check that it is worth the price being paid for it. This is commissioned by the mortgage lender but you must cover the cost. The cost of the valuation depends on the value of the property - for example, allow about £125 for a property worth £50,000, £165 for a £100,000 house and so on. Some lenders do not charge this fee, as an incentive for you to take out a mortgage with them.

Survey

It is strongly advised that you have your own independent, more detailed survey carried out to check for any defects. There are three types of survey: the Valuation usually carried out for the Lender (see above); the Homebuyer's Report which costs between £250 and £500; and the more comprehensive Building Survey (Structural Survey) which can cost anything up to £1,000 plus VAT, depending on the value of the house. You should also consider having newly built properties surveyed, although the condition of new properties is guaranteed by the builder, it is much safer to get any snagging carried out before you move in, or while you can retain money against outstanding works. The alternative of claiming from the builder afterwards can be a painful experience.

Legal/Conveyancing Fees

You will need to hire a solicitor to deal with the legal aspects of buying a property. There is no standard fee so it is a good idea to shop around for the best rate. Some solicitors charge a flat rate while others charge a percentage of the property price, normally up to half a percent. As well as the price of your house, the fee will take into account factors such as the amount of paperwork involved, how much skill is required and how complicated the transaction is.

You will also have to pay for the legal work done by your lender's solicitor. Again, prices vary so ask your lender how much they charge. If you use the same solicitor as the lender to do your conveyancing this may save you money, but compare charges with other firms.

StampDuty

Stamp duty is a tax, charged for properties above £125,000. If your new home is priced between £125,000 and £250,000, you will pay 1% of the property price. From £250,000 to £500,000, it will be 3% and over £500,000 it will be 4%. So, for example, if you are paying £200,000 for your home you pay £2,000 in stamp duty. For a £300,000 property the stamp duty at 3% is much higher in proportion to the purchase cost (£9,000).

Stamp Duty Land Tax Exemption in 'Disadvantaged Areas'

If you're buying a residential property in an area designated by the government as 'disadvantaged', you don't pay any Stamp Duty Land Tax if the purchase price is £150,000 or less. To find out more about Stamp Duty Land Tax and how you pay it, please see the HM Revenue & Customs article Tax on Buying Property .

Land Registry Fee

The Land Registry is a government department which looks after the registers of all registered properties in England and Wales. It charges a fee for transferring the register to the new owner. This fee is charged according to property price. 
    Price (£) Fee (£)
    up to 40,000 40
    40,001 - 70,000 60
    70,001 - 100,000 100
    100,001 - 200,000 200
    200,001 - 500,000 300
    500,001 - 1,000,000 500
    1,000,001 and over 800

Local Authority Search Fees

Local searches will be carried out by your solicitor/conveyancer to ensure that there are no potential problems such as planning permission on neighbouring properties or plans for new roads nearby. Allow at least £60, or more in London boroughs.

Other Search Fees and Disbursements

These include index map, commons, the coal authority, land charge, company searches, bank transfer fees. Allow about £70 to cover an average house purchase.

Estate Agent's Commission

If you're selling your property as well as buying one, the sum charged by your estate agent has to be taken into account. Usually this is charged as a percentage of the property price, around 1.5 - 2 per cent on average. If you are selling it yourself, you will need to pay for advertisements.

House-hunting Expenses

House-hunting itself can be a costly business - allow money for eating out, travel and telephone calls, and hotels if you are buying in a different area. Consider whether you will need time off work.

Removal Fees

Ask for quotes from at least 3 different removal firms, as prices vary. Remember you will need to give tips. You can do the removal yourself, but this is much more time-consuming and inconvenient. If you are DIY-ing it, costs will include van hire (+VAT and insurance), petrol, and return travel from the van hire company when you return it. You will also need about £25 for insurance.

MIG Fees (mortgage indemnity guarantee)

This is an insurance premium charged by some lenders where your loan amount is more than 75% of the price of the property - in other words, where the loan to value (LTV) is greater than 75%. Other lenders do not charge an MIG, while some only charge when the LTV is more than 80 or 90%.

This is charged in case you default on your mortgage repayments and the mortgage lender cannot recover its money. Note that this protects the lender, not you.

Costs vary from lender to lender but typical MIG premiums are:

  • 4 per cent of the amount borrowed above 75 per cent on a loan of up to 90 per cent of the purchase price
  • 6 per cent of the amount borrowed above 75 per cent on a loan of up to 90-95 per cent of the purchase price
  • 8 per cent of the amount borrowed above 75 per cent on a loan of up to 95-100 per cent of the purchase price

Other Costs

  • Buildings insurance premiums
  • Contents insurance premiums
  • Additional removal insurance
  • Disconnection of services (water, gas, electricity, telephone)
  • Reconnection of services
  • Installation of new equipment
  • Carpet laying
  • Kennelling of pets
  • Mail redirection
  • Change of address notice

Contingency Fund

Leave a decent-sized contingency fund for emergencies. You do not want to be left completely penniless in case you have unexpected extra costs.

Home Buying Guide: Choose Your Home - Introduction

Introduction

Looking for a new home is a time-consuming process, and it is tempting just to rush into buying the first one you like the look of. But watch out, as it will not be so easy to take back to the shop if you decide you don't like it after you have moved in. Once you have decided to buy a house and found out how much you can afford, it is worth sitting down and thinking hard about what you want from your new home and what your needs are. We have made a list of some of the things you should consider when househunting.

Key Tips

Once you have found a property you feel you like, make sure you learn as much as possible about it. Even if it seems perfect at first glance, try to think about it from all angles. And write everything down - the best house-hunters take notes on each property they view which they can compare later.

Make at least two visits. View the house in the daylight and at night. Come at rush hour, as you could get a nasty surprise - is the road used as a short-cut by motorists?

General Condition

  • Check what fixtures and fittings will be left by the previous owner
  • Consider the layout of the house - are there any unusual shaped rooms that it would be difficult to fit furniture or appliances into? Are there are enough power points?
  • Don't be put off by the seller's choice of decor - try to imagine the house with your own furniture and style

State of Repair

  • Insulation: is the roof well-insulated? Go into the loft and turn off the light - you shouldn't be able to see any patches of day-light. Is there wall-cavity insulation?
  • Central Heating: is the central heating system efficient? How old is it? Is it gas or electricity-powered? Ask to see a winter heating bill as this can help give an idea about the quality of insulation
  • Plumbing: Are the pipes and the boiler lagged? How old is the piping? Lead piping will need replacing
  • Plug sockets: How old are they? If they are the old-fashioned, round-pin type, re-wiring will probably be required

Structural Problems - Inside

  • Subsidence: look for cracks in ceilings and walls, doors that stick or don't hang correctly
  • Damp: You can smell damp, so use your nose. Mould, walls which are damp to the touch, flaking paintwork or wallpaper which is peeling off are also signs of damp. Be wary of new paint or wallpaper which could be hiding problems underneath
  • Condensation problems: rotting window frames can be a sign of this. If they are very soft to the touch this means they are rotten. Make sure the bathrooms and kitchen are well ventilated
  • Woodworm: indicates by holes in woodwork

Structural Problems - Outside

  • Subsidence: look for big cracks in the walls, a bent chimney stack, or an uneven roofline
  • Damp: examine for missing roof tiles, and check the brickwork and mortar as cracks can let in damp
  • Root damage to foundations: if there are any big trees nearby this could cause problems

NB: Inspecting the property yourself does NOT avoid the need for a professional survey

Location, location, location

It is important to research a particular area before viewing lots of homes or making an offer on a house there. If you decide it is not the kind of neighbourhood you would enjoy living in, then you could save yourself a lot of time and effort by doing so early on in the process. Even if you can get a bigger home for your money in an area which isn't so nice, make sure you really are doing the right thing. Remember that you can always make changes to a house but not to the neighbourhood. 
  • What is the neighbourhood like? Is it the kind of place you can imagine yourself feeling comfortable in? Who lives there?
  • What kind of amenities are there locally? Check out the leisure facilities, activities for kids, shops, public transport and so on.
  • If you have children, look at the local schools. Do they have a good reputation? Where do they stand in the league tables?
  • What is the level of crime in the neighbourhood? Check crime reports in the local newspaper or crime statistics online.
  • How easy is it to reach your workplace?
  • What council tax band will you be in?
  • Will you have enough car parking space?
  • What kind of condition are the other houses in your street in? If they are in a state of disrepair, it could bring down the value of your property.

Simply touring the area can give you a good idea of what it is like. There are also some good sites on the internet where you can research different areas and what is available there. Gentrification is a key indicator of an area which is improving and where house prices are more likely to go up. Key signs of gentrification include an abundance of cafes and trendy home design shops. Another sign of a good area to invest in is one with a lot of interest from property developers. Find out if any new flats and homes are being built. Local newspapers and council websites are a good source of information about planning activity, as well as information about local schools.

Mortgage Calculator

You can estimate your monthly mortgage payments using our mortgage calculator below. 
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  • Do you want a new or an older house? If you are buying a very old one make sure you have looked into what this can entail. Old houses can look lovely but cost a lot to keep up in terms of maintenance and heating bills. Newly-built homes can also have drawbacks, such as higher prices than 'secondhand' ones, and the requirement to buy before they are fully built, but advantages include less maintenance and decoration costs, and often complimentary extras thrown in by the builders such as carpets, curtains and fitted kitchens (though you will not necessarily get to choose your own decorations). Remember new builds can be poorly built too, and you should consider a proper survey. There are additional guarantees for newly built homes under the NHBC guarantee scheme, but you do not want to have to call on these guarantees. It is far better to have any outstanding works (or 'snagging') dealt with before you move in.
  • Do you want a terraced, semi-detached or detached house, or a flat? If you want a flat, do you want a purpose-built one or a conversion? All have their advantages and disadvantages: consider space, privacy, noise, parking and character. How much does each one matter to you?
  • How much decorating or improvement do you wish to make to a property?
  • Do you want a leaseold or freehold property ?

Freehold

This means that you fully own the property. As a freeholder you will have full responsibility for the maintenance and repairs of the property.

Leasehold

This means that you own the property for as long as is specified in the lease; you are granted the right to live there by the freeholder. At the end of the lease the property again becomes the possession of the freeholder. Many leases are originally granted for up to 999 years, but existing leases on properties are usually shorter. The majority of leasehold properties are flats, although some houses are leasehold.

The lease stipulates who is responsible for maintaining and repairing different parts of the property and any conditions you must meet as a resident. Check these if you are considering buying a leasehold. You must also pay a ground rent to the owner of the land (the freeholder), usually a small amount paid each year. Your solicitor should check that the seller is up to date with ground rent payments before you sign the contract.

You should not buy a property with a lease of less than 60 years, and anyway mortgage lenders are very unlikely to lend for a lease as a short as this. Lenders normally want at least 20 years left on the lease after the end of the mortgage term. As a leaseholder you have the right to extend the lease for 90 years or even to buy the freehold if certain criteria are met, though the application process is expensive and takes a long time.

Home Buying Guide: Registered Or Unregistered Property

Property can be either 'registered' or 'unregistered'

If property is registered, the title to the property is registered at the Land Registry and is guaranteed by the state. The owner has a 'Land Certificate' instead of the usual title deeds. Buying registered property is more straightforward than buying unregistered property.

If property is unregistered, ownership is not guaranteed by the state. The title can only be proved by a copy of the title deeds, and your solicitor will check back the property's documentation over at least 15 years to certify it. With unregistered property, disputes over title are not uncommon.

When you buy unregistered property, it must now be registered for the first time with the Land Registry. This will take some time so the buying process will take longer than if you are buying registered property. Your solicitor/conveyancer's fees will probably also be higher.

When you have found a home you are happy with, you are nearly ready to make an offer.

Follow the links below for detailed information and tips to guide you through each stage of the negotiating process.

  • Pre-Offer Check List
  • How Much Should I Offer?
  • Negotiating Tips
  • Negotiating In A House Price Slump
  • Negotiating In A House Price Boom
  • The Offer

Pre-Offer Checklist

Before making an offer, there are a few things you should check: 
  • Keep an eye on the local and national housing market. Check that the house is worth the price you are willing to pay. Have a look at Land Registry  reports for houses that have sold in the same area and compare asking prices with actual sale prices. The direction asking prices are heading is a good indicator of the local and national market. For more information about asking prices look at Home.co.uk's Asking Price Index

    When making comparisons between houses, bear in mind that its value can be increased by factors such as extensions, loft conversions, fitted kitchens, being in a good location, or being a brand new house. Similarly, the value can decrease, for example, because of extensions that fill the whole garden or being in a bad location.

  • Check whether the property is freehold or leasehold
  • Agree what fixtures and fittings will be included. Draw up a list of all items with the seller as this will avoid later confusion
  • You can also check things like planning permission, whether there are plans for new developments nearby (roads, new houses etc), and covenants, though these should be looked at by your solicitor later on during conveyancing

Remember that properties do not have fixed price tags - you can make substantial savings with a little skilled haggling over the price. It is important to get the opening offer right, as this will play a big part in determining the amount you eventually pay. Normally, the opening is offer is about 5-10% lower than the asking price, and the two parties take this as a starting point for further offers and reductions in asking price until an agreement is reached. Be aware that the asking price is often set high in order to encourage a higher opening offer than would be given with a lower asking price, and you are expected to negotiate.

The negotiation will be affected by various factors, and you will do better if you take these into account:

  • How many other people are interested in the same property. If you are the only one, you are in a strong negotiating position and the seller is likely to accept a lower price. If there are two or more parties making offers, the seller and their agent will be far tougher during negotiations and you may be sensible to offer the asking price.
  • How quickly the seller needs to sell. If they need to sell quickly, they will be more likely to accept a lower sum than the asking price.
  • How long the house has been on the market. If the seller is having difficulty selling the house, they are more likely to accept a lower price. Check whether the asking price has dropped since it went on the market.
  • What season it is. Demand for houses is higher in spring and summer so prices will be slightly higher at these times of year.

Your own position will also affect the negotiation. A couple of factors could be to your advantage:

  • Are you part of a chain of sales? If not, the seller can be more certain that everything will be completed on time. First time buyers, people who have already sold or exchanged contracts on their own property and people who have nothing to sell all have this advantage.
  • Can you show the seller that you can borrow enough money to buy the property? It is a good idea to get a written agreement in principle from a mortgage lender to show the seller that you will have enough money to pay them. This demonstrates that you are serious about buying and that the process will be able to take place quickly once you have both agreed on the sale.

Remember, if you don't think the property is worth as much as is being asked, you can introduce this into negotiations. For example, if some repair work is needed and you think this should bring the price down, you can try to persuade the seller that the property is overpriced.

Negotiation is a skill which pays. Here are a few ways you can become a better negotiator:

  • Make sure you know what you are talking about and show you know it. Let everybody know that you have viewed plenty of homes, and that you understand the property market and how much the home should be worth. Asking well-informed questions will show you are not a customer who can be easily conned.
  • Keep cool and don't look overly keen. If the seller sees how much you are in love with a home, they know you will be willing to pay more. Play a bit hard to get, and make sure they know you have seen a lot of houses. Don't rush into making an offer; take the time to think about it.
  • Stay polite, however stressed or angry you feel. Aggression will not get you anywhere. Remember that if a seller has two equal offers, they will probably go for the buyers with whom they are on good terms.
  • It is best to negotiate in person, not over the phone. This way you can better gauge the other person's reactions to what you say and respond accordingly.
  • Estate agents are hard-nosed professional negotiators - be prepared for their ruthless bargaining tactics and don't let yourself be bullied. Take what they say with a pinch of salt, and try to look and feel confident.
  • It can be worth contacting the seller directly, and there is nothing to stop you from doing so. Just remember they might be even tougher than the agent.
  • While it is good to play it cool, don't be overly cautious or evasive, especially if you know the seller has received other offers or needs to sell very quickly. Assess your own and the seller's positions and act accordingly - if your position is not that strong, worrying over a relatively small sum of money could lose you your dream home.
  • If you are buying a new build, the site sales agents are often commission driven. You may find that they are receptive to lower offers or requirements of a superior fit-out at the end of the month, when they are particularly keen to close deals.

Once your offer has been accepted, it must be made formally, in writing, and subject to certain terms and conditions. Ensure that the agent and seller understand the terms of your offer.

  • Your offer must be "subject to contract and to survey". This means that you are not legally bound to proceed until a survey has been satisfactorily completed and signed contracts have been exchanged. This is very important.
  • Specify what fixtures and fittings you want to be included, and what work on the property you want to be undertaken before the sale has gone through.
  • It is a good idea to demand that the property be taken off the market as soon as your offer has been accepted, to avoid the danger of gazumping. Putting down a deposit as an act of good will can help to show your good intentions.

Both you and your mortgage lender need to know whether the property is actually worth the amount of money you have agreed to fork out for it. As well as what is known as the basic valuation, there are two main types of survey: the homebuyer's report and the buildings survey (also known as the full structural survey). All lenders require a basic valuation, but is strongly advised that you also have an independent, more detailed survey carried out as the basic valuation will only show up any obvious problems that you will probably have noticed yourself. The level of survey you need depends a lot on the individual property you are buying.

Is a Survey Really Necessary?

Surveys are expensive. You already have to pay for a basic valuation for your lender, and you may be tempted to risk not to bother with any closer examination of the property by professionals. Certainly you can look it over yourself and this can give you some idea of its condition, but there is no doubt that a trained eye will show you all the problems which you would not pick up on. A survey might seem to cost a lot at the time, but you will kick yourself if you have to pay out thousands of pounds later on for major repairs of faults you didn't know about when you bought it. If major defects are uncovered you might even think again about your purchase, or you could be in a position to renegotiate the price. A home is a massive investment and it is worth paying a few hundred pounds for a survey at this stage as it could save you much bigger sums, and lots of hassle, later on. If problems do appear later on which the surveyor did not point out, you may be able to claim compensation (see our Making Complaints section).

Home Buying Guide: Basic Valuation

All lenders require a basic valuation. They need to know that they are not lending you more than the property is worth, and that if you sell it off you will get at least as much money back as you paid for it. Although this is often referred to as a survey, it is really too superficial to merit this title.

The valuer arrives at a value by comparing the property with similar ones, taking factors such as age, condition and location into account. The valuation also points out any very obvious major faults which could affect the property's value, but is very brief and is not nearly as detailed as a real survey.

The basic valuation is commissioned by your mortgage lender, and is for their benefit, but unfortunately it is you who must pay for it. If the house is valued lower than the purchase price then your mortgage offer may be withdrawn, or offered on the condition that specified work is carried out on it first. If it does reveal that the house is worth less than the price you have agreed to pay for it, you may be able to renegotiate the price, but first double-check with the surveyor how the value given was reached, and that he or she is certain you are paying too much.

The basic valuation takes about half an hour, and costs between around £100 and £300, depending on the price of the house. Some mortgage lenders waive the fee for the basic valuation as part of a package to attract your custom.

Home Buying Guide: RICS HomeBuyer Report

The RICS (Royal Institution of Chartered Surveyors) introduced the new RICS HomeBuyer Report (HBR) in July 2009. Initially this ran alongside the previous RICS Homebuyer Survey and Valuation (HSV) which had been in use for a number of years. The HSV was phased out in March 2010 and the new HomeBuyer Report became the only one that was licensed by the RICS.

The report was quite a radical departure from earlier formats and was developed following considerable market research and feedback from the general public. It was designed to be a user-friendly report with the minimum of technical jargon. The most significant change was the introduction of colour coded Condition Ratings usually referred to as the 'Traffic Lights System'. The surveyor must rate each element of the property using one of the following Condition Ratings.

  • Condition Rating 1 (green) - No repair is currently needed. The property must be maintained in the normal way.
  • Condition Rating 2 (amber) - Defects that need repairing or replacing but are not considered to be either serious or urgent. The property must be maintained in the normal way.
  • Condition Rating 3 (red) - Defects that are serious and/or need to be repaired, replaced or investigated urgently.

The report is now quite lengthy, usually in the region of 25 pages, but it is divided into easily readable and logical sections as follows:-

  1. A. Introduction to the report
  2. B. About the inspection
  3. C. Overall opinion and summary of the condition ratings
  4. D. About the property
  5. E. Outside the property
  6. F. Inside the property
  7. G. Services
  8. H. Grounds (including shared areas for flats)
  9. I. Issues for your legal advisers
  10. J. Risks
  11. K. Valuation
  12. L. Surveyor's declaration

The report will also include a number of appendices which provide useful information about what the purchaser needs to do next and, particularly in the case of leasehold properties, any enquiries that legal advisers need to make prior to exchange of contracts. The new format also allows the surveyor to add photographs to the report.

Section C is particularly useful to the buyer as it gives an overview of the Condition Ratings for each element of the building and includes a fairly concise section giving the surveyor's overall opinion of the property. This will include a comment as to whether or not the surveyor considers the agreed purchase price to be reasonable. Normally this will be the section that the client turns to first.

Section D includes a brief section on energy efficiency and reference to the Energy Performance Certificate that must be prepared before a property is marketed.

Section G gives an overview of the condition of the services based on visual inspection. However, the surveyor will not test the services. If the property is vacant the services may have been turned off or disconnected. The surveyor will not be able to turn services on unless the vendor is present and is able to turn them on. The surveyor will recommend further investigation if appropriate. Often it will be necessary to have the gas, electric and central heating systems tested in older properties.

Section J is a new element of the report and is used to identify risks to the building, grounds or occupants. This could cover such problems as potential flooding, the presence of asbestos based materials, an unprotected pond that could be a danger to small children or lack of safety glazing to doors.

The new Homebuyer Report has been well received by the public and the Condition Rating System, is considered to be very helpful to potential purchasers.

The RICS also offer a product called a 'Condition Report'. This is a simplified version of the Homebuyer Report and includes many of the elements discussed above, including the 'Traffic Lights System' for flagging up defects. The Condition Report does not, however, include a Valuation or advice on future repairs and maintenance. The Condition Report can be commissioned by vendors, prior to putting their property on the market, to prevent unforeseen issues cropping up when their potential purchaser has a mortgage valuation or survey carried out.

Home Buying Guide: Building Survey

This is the most comprehensive - and the most costly - type of survey. It is suitable for any building, but is especially recommended for older buildings (75 years and upwards); those constructed out of unconventional materials such as timber or thatch; and properties which have had lots of alterations or extensions, or which you intend to alter or renovate.

The surveyor will check the property thoroughly, looking at everything that is visible or easily accessible to examine the soundness of the structure, its general condition and all major or minor faults. More specialist surveys can also be carried out on aspects such as foundations, damp proofing, or tree roots, either by a specialist within the firm of surveyors or by an independent specialist surveyor.

The report you receive will be extremely thorough and very long, as surveyors are legally obliged to inform you of all the findings of the survey. Don't necessarily be put off if it seems that endless defects are listed - every house has some defects and surveyors tend to show the worst-case scenario for anything they discover. You should be provided with a list of prices for repairs and maintenance work, which will also tend to over- rather than under-estimate prices.

A full structural survey normally takes much longer than the one or two hours required for the homebuyer's report. The survey report can also take a long time to produce, so this is a much lengthier process than for a homebuyer's report. You will probably have to wait up to two weeks after the inspection for the report, for which there is no standardised reporting format. A buildings survey costs anything up to £1,000, again, depending on the price of the house.

Home Buying Guide: Find A Surveyor

It is not hard to find a surveying company. Asking for recommendations from your lender, solicitor or estate agent is probably the easiest way of finding a reliable surveyor, or you could contact one of the professional trade associations for details of surveyors in your area. The Yellow Pages also lists many surveyors. If you need a specialist survey, make sure you instruct a surveyor with expertise in the relevant area.

Shop around and get plenty of quotes, as it costs a lot to get a survey done and prices can vary. The amount you pay normally depends on the cost of the property you are buying. It is important to discuss in advance how much you will have to pay and what kind of survey will be undertaken, or you might find yourself being ripped off. It is possible that you may have to pay more than once for a survey, if the sale falls through or if you decide not to buy the property on the basis of the survey results and carry on looking.

You are advised to check up on the surveyor's credentials if you are unsure that they are a qualified professional. All surveyors should be a member of the Royal Institution of Chartered Surveyors (RICS).

Always talk to your mortgage lender before instructing a surveyor as it is usually possible to get the basic valuation done at the same time, reducing your costs.

Home Buying Guide: Conveyancing - Introduction

What is Conveyancing?

The term 'Conveyancing' refers to all the legal and administrative work associated with transferring the ownership of land or buildings from one owner to another. The conveyancing process starts after an offer has been made and accepted for a property, and solicitors' details have been exchanged by the two parties.

Who Does The Conveyancing?

Most people hire a solicitor or licensed conveyancer to undertake the legal side of buying their home. It is possible to do the conveyancing yourself, but this is a time-consuming business and also risky if you lack the necessary expertise. Although professional services are expensive, they have become cheaper in recent years and it is well worth the cost to successfully complete the purchase and to resolve any possible problems. This part of the process is crucial.

DIY Conveyancing: Pros and Cons

DIY-conveyancing is possible. If you are sharp, not put off by legal jargon and willing to deal with the large amounts of paper-work involved then it might be safe not to hire a professional conveyancer or solicitor. However, it is advisable to think about this very carefully as it is a complex and time-consuming business. If it is not carried out properly you could, for example, find yourself involved in costly legal disputes over boundaries, discover that there is a new road planned to be built opposite your home, or even that the seller did not have the legal right to sell the home.

In reality very few home-buyers undertake the conveyancing themselves, for three main reasons:

  • Many mortgage lenders will insist on employing a solicitor to protect their interests. They do not want to risk having shoddy conveyancing work.
  • There is a higher risk of things going disastrously wrong
  • The other people involved may not be happy with you doing your own conveyancing, and may even reject your offer on this basis

There are some cases in which DIY-conveyancing is particularly inadvisable, for example:

  • if the property is being sold by a divorcing or separating couple (this requires specialist skill or knowledge)
  • if the property is not a freehold
  • if the property is unregistered
  • if the property is not a house

When a property is being sold an energy performance certificate will need to be provided.

Home Buying Guide: Conveyancing - Choosing A Solicitor Or Conveyancer

Traditionally, solicitors undertook all conveyancing work but now there are also licensed conveyancers to do the work.

It is illegal for unlicensed conveyancers to charge a fee . Check with theCouncil for Licensed Conveyancers that a named conveyancer is licensed.

It makes little difference whether you choose a solicitor or licensed conveyancer - other considerations are more important.

Key Factors to Consider in Choosing a Solicitor

  • Prices vary, but be wary of the very cheapest services - this might indicate poor quality. It might be worth paying a bit more for a good service. On the other hand, the most expensive is not necessarily the best.
  • Look for a solicitor who is not overworked or inexperienced as this could mean important details are missed. Equally, you don't want one who is very slow or too pedantic as this could hold up the process.
  • Buying a house is a stressful business, and it is important that you get on with your solicitor. Think about whether you can trust this person.

Hire a solicitor or conveyancer as soon as possible in your home-buying process, so that they will be ready to step into action as soon as you have had an offer accepted - preferably as soon as you know you are likely to make an offer on a house. The faster things move, the better the chances that all will go smoothly.

Finding a Solicitor

One of the best ways to choose is through personal recommendation. If you know someone who was happy with a solicitor/conveyancer's services throughout the process this is a very good indication of their quality.

Otherwise, you can consult the Law Society's regional directory for solicitors in your area, or look in the Yellow Pages or local newspapers for adverts.

If you have already used a solicitor for other business, you could contact them for recommendations of solicitors in the same firm specialising in conveyancing.

The same solicitor cannot act for both the buyer and seller, but two solicitors of the same firm may , as long as there is no clash of interests between buyer and seller.

Home Buying Guide: The Conveyancing Process

The Conveyancing Process at a Glance

Buying or selling a home is a complex business, both legally and administratively. The exact order of events varies slightly, but there are three main stages to the process.

The three main stages are outlined at the most basic level below. Follow the links for more detailed information on what each individual stage entails.

Stage One: Before the Exchange of Contracts

The draft contract is received and negotiated, enquiries are made and the formal mortgage offer is received. See further Stage One in Detail.

Stage Two: Exchange of Contracts

The contract is signed and you hand over a deposit. Final accounts are prepared and the mortgage deed requested for you to sign. Final searches are made. See further Stage Two in Detail.

Stage Three: Completion

You obtain the keys to your new home and receive the title deeds. Stamp duty is paid and the transfer is arranged at the Land Registry. See Stage Three Detail.

Home Buying Guide: Conveyancing: Stage One

  1. Your solicitor contacts the seller's solicitor

    Once the sellers have accepted your offer, you exchange solicitors' details with them. Your solicitor will then contact the seller's solicitor and receive the draft contract.

  2. Your solicitor receives and negotiates the draft contract

    The draft contract contains details of prices, the two parties, other information about the transaction such as deposits, and information from the seller's title deeds.

  3. Your solicitor makes pre-contract enquiries
  4. Your solicitor should send you a property information form or a copy of the draft contract for you to check

    A property information form may be included if the solicitors are operating the TransAction Protocol. This is a Law Society scheme which is used by many solicitors in the conveyancing process. If your solicitor is operating this scheme, the seller's solicitor provides a package at the beginning of the process which includes:

    • the draft contract
    • copies of previous title deeds (registered/unregistered?)
    • a property information form, giving key property information (this saves the solicitor from many of the preliminary enquiries)
    • fixtures, fittings and contents form, telling you what fixtures, fittings and other items are included in the price and which will be removed. You should agree with the seller what is to be included, and make sure everything is included in the form

    Your solicitor will check the details of the draft contract and negotiate it with the seller's solicitor.

    It is a good idea to check through the draft contract yourself in case anything has been missed out, such as any agreements you had made with the seller, so ask your solicitor for a copy if you have not been sent one.

  5. Your solicitor applies to local council for local searches, checks the title, contract and papers, and raises queries with the seller's solicitor.

    It is the solicitor or conveyancer's job to make all the necessary enquiries to ensure that there is no reason why you might want to change your mind about buying the property. For example, it is vital to guarantee that the seller really owns and has the right to sell it.

    The main standard searches are:

    Local Authority Searches

    Enquiries are sent to the local authority such as whether there are any plans for a major road to be built nearby, or whether there are any problems with the property which you would need to rectify. Your solicitor should also get checks done on nearby buildings or empty land - do they have planning permission for more buildings or development?

    Enquiries To The Seller's Solicitor (the 'preliminary enquiries')

    Your solicitor will send a standard set of enquiries to the seller's solicitor which will include: 
    • Disputes: whether there are any disputes relating to the property, such as disputes with neighbours.
    • Boundaries: what exactly are the boundaries of the property and who has responsibility for the maintenance of hedges and fences. Arguments over boundaries sometimes even escalate to court cases between neighbours, so it is important to establish this now.
    • Planning constraints and permissions: whether any additions or alterations that have been made to the property have met local planning requirements and that building regulation consent was received.
    • Rights of way: checking that there is no right of way or footpath through the property, and on shared rights of access with a neighbour such as a garden or driveway.
    • Restrictive covenants: whether the deeds specify that certain things are forbidden, for example keeping pets, or specifying that the house cannot be painted a different colour from other houses on the street.
    • Guarantees or insurance policies: for example whether the property is covered by the NHBC guarantee or the woodrot treatment guarantee
    • Services: whether the property's utilities (gas, water, electricity) reach it via a neighbour's property or are shared with a neighbour
    • List of contents included in the sale: you must make sure that you have reached a clear understanding with the seller about what is and what is not to be included and listed it clearly.
    • If it is a leasehold, they will ask who the managing agent is, who the freeholder is and whether the seller is up to date with ground rent and services charges.
    • You may want to consider asking your own additional enquiries via your solicitor, these might include questions such as whether the property has been burgled, additional questions about the neighbours or more information about any known building works.

    Other Searches

    A set of standard questions is also sent to the water authority. There are additional searches which may be carried out if necessary, for example commons searches, coal mining searches and so on.

    If you are buying a newly built house there are particular checks which must be carried out by your solicitor.

    Your solicitor will then check through the draft contract and send anything that needs changing to the seller's solicitor.

  6. The contract is negotiated and agreed. A completion date is agreed.

    There is often a fair bit of correspondence between the two solicitors so finalising the draft contract can take some time. Make sure your solicitor knows about any agreements you have made with the seller.

    The day for the completion of the transaction (ie the day when the deal is finalised) must be agreed upon before the contracts are exchanged. It normally takes about two weeks from exchange of contracts to completion day, although it can be more or less. Some people arrange for exchange of contracts and completion to take place on the same day, but this is not always possible. Note that if you are part of a chain of sales, the completion date will probably need to be agreed with more than two parties.

  7. You get a formal mortgage offer (if you are getting a mortgage) on this property, not just an agreement in principle. Your solicitor will send you a mortgage deed to sign.

    The formal mortgage offer for this particular property which you obtain at this stage is distinct from an agreement in principle (which you should have obtained earlier). At this stage you also need to have received the results of your survey if you are having one done, and accepted these results. If you are not satisfied with the results of the survey, you need to address any problems at this stage, not after the exchange of contracts when you are legally bound to buying the house. Make sure that the parties have agreed all the terms of the contract and that any disagreements or any matters that are unclear have been resolved.

Pre-Stage Two Check List

Before exchanging contracts, check that all is in order: 
  • You have received and are satisfied with the survey report
  • You have received your formal mortgage offer, and are happy with it
  • The deposit sum has been agreed and you have the money available
  • You have arranged life and property insurance and they are ready to begin on completion
  • The completion date has been agreed with all parties
  • The terms of the contract have been checked and finalised by all involved

Home Buying Guide: Conveyancing: Stage Two

  1. Contracts are exchanged. You hand over a deposit which is non-refundable if you pull out of the sale.

    Once you and your solicitor are satisfied that everything is in order, the contracts can be exchanged. You sign a copy of the contract which is passed to the seller, and the seller signs a copy of the same contract which you receive. Once contracts have been exchanged (normally by the two solicitors) both parties are legally bound to follow through with the transaction. You can no longer change your mind - if you pull out it is likely that you will lose your deposit, and you could be sued for breach of contract. You also now have no need to worry about gazumping.

    At this point you hand over a non-refundable deposit as security to the seller in case the contract is not carried out. This is normally 10% per cent of the purchase price, but it is usually negotiable. If you do not have the money for the deposit at hand immediately, you can arrange for a bridging loan from your bank.

  2. Your solicitor draws up a transfer document and sends it to the seller's solicitor

    Once contracts have been exchanged your solicitor prepares the draft transfer document (if the land is not registered it will require a special kind of transfer or 'conveyance'). This documents transfers the title of the property from the seller to the buyer. Once both parties have agreed on the draft, it is signed by the buyer and the seller.

  3. Your solicitor arranges finalisation and signing of your mortgage documents

    Your solicitor will also deal with the finalisation and signing of documentation relating to your mortgage, and will arrange for the money to be available on completion of the sale.

  4. Your solicitor carries out final searches and enquiries

    Land Registry checks are carried out by your solicitor, to make sure that nothing is registered against the seller (or at the Land Charges Registry if the property is not registered). Problems such as undisclosed mortgages or disputes could be uncovered at this stage.

    There will be various matters for you to deal with in the run-up to completion. There will be some documents to be signed and payments to be made: you must pay Land Registry fees and stamp duty. Before completion you need to make sure that all the terms of the contract have been fulfilled, such as any repairs.

    You also need to be arranging all the practical matters related to moving house.

Home Buying Guide: Conveyancing: Stage Three

  1. You move in!

    At last! On the day of completion you receive the keys and the seller is obliged to move out.

  2. You pay the seller the balance of the house through your solicitors

    On the day of completion you also have to pay the balance of the price on the house (the agreed price minus the deposit which you have already paid), usually through your solicitor or conveyancer.

  3. You receive the transfer document and the title deeds

    The seller's deeds are now handed over to you, and arrangements are made for any outstanding mortgages on the property to be paid off.

  4. You pay extra costs:stamp duty, Land Registry fees and solicitor fees 
  5. Solicitor carries out final administration

    After completion the solicitor still has various details to tie up. Your solicitor will:

    • where relevant, inform your mortgage lender, life insurance company, and the freeholder that the sale has been completed
    • register the transfer of ownership at the Land Registry. They will then send the deeds to your mortgage lender who will keep them until you either sell the property or pay off your mortgage
    • pay the stamp duty
    • send you a statement of completion, including a summary of the financial transactions. If you have not already paid their fees, they will ask for these now.

    Home Buying Guide: Insurance & Other Legal Matters

    When you buy a new home, it is important to think about insurance and any other affairs connected to the purchase of your home, especially if you are a first-time buyer. This section contains introductions to all kinds of insurance policies which are related in some way to buying, owning and paying for a home. You have made a large investment, and you need to protect it, including from a situation where you are unable to continue to pay off mortgage loans. In this section you will find introductions to the different types of insurance you will require - this is particularly important for first-time buyers who are buying this insurance for the first time.

    Household Insurance: Buildings and Contents

    You now own a new home, so it is essential to protect it, and also all your possessions. Household insurance has two parts - buildings insurance and contents insurance. They can be bought separately, though some insurance companies offer a single policy covering both which can save you money.

    Buildings Insurance provides cover for the property itself, including basic essentials such as kitchen and bathroom fittings (sink, toilet, bath etc) and running water. It also provides cover for events such as fire, flood or even subsidence.

    When buying a home, make sure that you have arranged for insurance cover on your new home to start on the day you exchange contracts. If you are not a first-time buyer, arrange for the insurance on your previous property to continue right up until the day you exchange, in case the deal falls through.

    If your home is part of a larger building, such as a block of flats, your buildings insurance may be bought in a joint policy by everyone in the building so you will only need contents insurance, or if it is a leasehold then the freeholder may have insurance - check up on these.

    With property values fluctuating so much, it is not always clear how much your property should be insured for. It is not the market value, but the amount it would cost to rebuild it that gives a more stable value for an insurance policy - including the costs of clearing rubble and architects' and surveyors' fees, as well as building materials and labour. Check your survey or valuation details for the rebuilding costs, which will be listed under the term 'reinstatement'. The Association for British Insurers (ABI) also has a leaflet on how to work out reinstatement costs, or you can check with your surveyor.

    What If Insurance Is Refused?

    Sometimes properties are difficult to insure because of past problems in the area concerning flooding or subsidence. It will usually be a term of your mortgage offer that suitable insurance is arranged and so if you are borrowing money insurance will be essential. Bear in mind that this could in future make the property difficult to sell, but if the price is right and you still wish to continue there is an arrangement where the existing insurer will normally continue to offer cover for domestic premises. So check with the sellers who their insurer is and contact them directly yourself.

    Legal Expenses Insurance is usually part of the cover offered with the buildings insurance. This can be useful as it provides access to private legal remedies for things like nuisance neighbours or disputes over a private roadway. Check the premium and the level of cover but it could be a worthwhile investment.

    Contents Insurance insures all your possessions inside your home. You may be surprised how much your possessions are worth - even if you are not a big spender, they can be worth tens of thousands of pounds. 'Contents' refers to everything from furniture and carpets to jewellery, cameras and clothes. It's up to you exactly what your insurance policy covers and the price depends on how much it covers. The policy will state an overall limit on the amount you can claim, called the sum assured, and there is also a minimum sum assured which is normally in the region of £30,000 although some insurers will quote for less.

    To work out how much cover you need, make a list of everything in each room and how much it is worth or would cost to replace. Remember to include furnishings, carpets and other fittings, and clothes and food, as well as more obvious items like TVs and jewellery. Insurance for items which you take outside your home such as bicycles, musical instruments, sports equipment and so on may also be included in your contents insurance. Often this is set up to a general limit, so if you need extra cover for more valuable items then you will need to ask for this limit to be increased. You can also ask for cover to be removed if you do not need it, so check what your policy includes - often standard policies include items like cash and cards left at home and frozen food up to a certain limit in case your freezer breaks down which you may feel are not worth paying for. You can reduce the cost of your insurance premium by agreeing to an excess on any claim, on both buildings and contents policies. This is where you pay the first part of any claim; for example, if your TV is stolen and you have agreed to a £50 excess you receive the price of the TV minus £50.

    If you already have contents insurance on your previous home make sure the cover is transferred to your new one on the day you move in

    Home Buying Guide: Which Insurance Policy?

    There is a huge amount of choice of deals in household insurance, so searching for a good one can be a bit daunting. If you already have household insurance on a previous home, this can be transferred when you move. If you do this, make sure you are getting the best deal for your new property which may come under a different premium and be worth more, or less, than the last one. Get a lot of quotes from different insurance companies. It is also worth looking into direct insurance companiesbrokers and online services.

    Top Tip: When looking into insurance deals, keep a record of what you tell each insurance dealer and the questions you ask them. This will make it easier to compare premiums.

    Some mortgage lenders provide their own insurance deals, but it is not necessarily wise to buy your home insurance from your lender. Their insurance premiums are often extremely high compared to those sold by insurance companies, and they might throw the cost of the premium in with the cost of the mortgage which makes it very difficult to work out how much you are paying. If your mortgage lender is offering you the convenience of an insurance policy bought from them, look very carefully at how much it will cost you and compare it to insurance policies elsewhere.

    The Association of British Insurers website contains a lot of information about buildings and contents insurance. They will also send out leaflets by post.

    Protection in the Case of Unemployment or Illness

    Mortgage Payment Protection Insurance (MPPI)

    "Your home is at risk if you do not keep up the repayments on a mortgage or other loan secured on it"

    This is a familiar phrase to home-buyers. You may think it will not apply to you, but what if you are unemployed for a period, or cannot work due to illness? The future is always unknown, and if the worst does happen you could suddenly face a crisis in paying your monthly mortgage repayments. It is a very wise precaution to insure against losing your home should such circumstances arise; every week, over 1,000 families have their homes repossessed.

    In the past, the government provided enough help with mortgage repayments in the case of unemployment to save many people from losing their homes, but since 1995 the rules have changed. Now, borrowers who took out their mortgage after 1 October 1995 who are having repayment problems do not receive any help until 9 months after the beginning of the period of unemployment - enough time to fall dangerously behind with payments. It is extremely inadvisable to rely on the Social Security system. You should instead seriously consider taking out Mortgage Payment Protection Insurance (MPPI) to cover your mortage payments should you become unable to continue paying them.

    Standards have been devised for MPPIs by the Association of British Insurers and the Council of Mortgage Lenders. These stipulate that a policy should:

    • start paying out after no more than 60 days, so that at most you will have to find two months' worth of repayments yourself
    • continue covering your repayments for at least 12 months after that period
    • assess each medical condition individually and not just refuse conditions such as backache and pregnancy complications automatically
    • give at least 6 months' notice of any change in the cover, such as cost or nature of the cover
    • operate more consistent policies towards self-employed and contract workers. Self-employed workers should be covered for unemployment if they have informed the Inland Revenue that they have ceased trading involuntarily and have registered for the jobseeker's allowance. Contract workers should be able to claim if they have worked for the same employer for at least a year.

    Make sure your policy covers as many circumstances as possible, and your particular work situation. Many policies do not insure part-time or temporary work. Also check the exclusion clauses - for example, many insurers will not cover unemployment which is due to medical conditions which you had before taking out the policy, or due to pregnancy, stress or back pain. Unemployment which is voluntary, caused by misconduct or is seasonal are among other circumstances generally excluded.

    As with household insurance, shop around for your MPPI. If your mortgage lender offers you a protection policy, make sure that you will not be paying far more than if you bought a policy elsewhere.

Home Buying Guide: Life Insurance

For those buying homes and taking out mortgages, life insurance is an important purchase to make. Most mortgage lenders insist that borrowers take out life insurance, but if yours does not, don't treat this as a good excuse to avoid the extra expense. Life insurance may seem like an unnecessary additional cost, but it is worth considering seriously. The point of it is to provide enough protection to cover outstanding mortgage repayments should you die before you have finished paying it off. This is particularly crucial if you have a family or other dependants, as it would make sure they could keep a roof over their heads in the event of your death.

Those with endowment mortgages do not need to worry about life insurance as the policy incorporates life insurance. However, nowadays most borrowers do not have endowment option mortgages, and so have to purchase life insurance separately. It is not a complicated product to understand - if you die, it simply pays out a lump sum. However, there are a few things you should look out for:

  • terminal illness benefit included in the policy at no extra cost: this means that if you are diagnosed with a terminal illness then your policy will still pay out when you die, even though the insurer knows beforehand that you are ill
  • waiver of premium means that if you become involuntarily unemployed or too ill to work, and you haven't got protection for unemployment or illness, your life policy premiums will still be paid even though you can't afford them. You will pay about 2.5% extra to have waiver of premium in your policy.

Which Policy?

As with other types of insurance associated with home-buying, your mortgage lender is likely to offer you life insurance when you take out your mortgage with them. This is not necessarily the cheapest option, so shopping around can save you a lot of money and give you more choice of policy.

Different policies work in different ways, and different kinds of policies suit different types of mortgage. For example, some life insurance policies provide 'level term assurance', which means that you will be covered for the same amount throughout the duration of the policy. This suits an interest-only mortgage, which is to be paid off in a lump sum at the end of the mortgage term. On the other hand, 'decreasing term assurance' is good for a repayment mortgage - as your outstanding loan gets smaller as you pay it off, the amount of cover decreases too. Remember that if you are moving to a larger home, you will need to increase your life cover.

Home Buying Guide: Removals Insurance & Other Legal Matters

Removals Insurance

Some household contents insurance policies will insure your possessions for the period of the move, but if yours does not you should take out extra insurance cover for any mishaps that might occur during the move. Most insurers will extend your cover for the removal period, for an additional premium to cover the increased risk. This premium is normally around £25. It is difficult to obtain this cover from insurance companies with whom you do not already have an insurance policy. Check what the policy covers and the time limit within which a claim must be made.

The policy will probably NOT cover:

  • scratches and dents
  • bank notes, shares, bonds, deeds, stamps and securities
  • loss or damage due to strikes, weather conditions, or delay
  • goods that are not professionally packed - make sure everything is packed, and unpacked, by professional removers or your claim may be jeopardized.

Removal firms may offer insurance as part of their contract. If they do, check the limit on what compensation you will be able to claim as it is often quite low. Ask to see in writing exactly what will be covered and the time limit for making a claim.

With most removals insurance you have to pay a part of any claim, known as the excess, which is usually £50 or more.

Legal Protection Insurance

It is possible to take out insurance cover on all the legal aspects of buying a house. This will cover any legal action that you need to take related to buying your home. It can be used against builders and developers, sellers, removal firms, utilities (water, gas, electricity companies), surveyors, solicitors and conveyancers.

Other Legal Matters

Your Will

When you buy a home for the first time you acquire a large asset. If you do not already have one, it is a good idea at this point to draw up a will to specify who will receive which parts of your estate (what you own less what you owe) when you die. It is not too difficult to draw up a will yourself, but consult a guide to making wills as it is important that it is done properly - look in any good bookshop for a guide. If you are unsure, or think that your situation is complex, consult a solicitor.

Inheritance Tax

Although set up as a tax on the wealthy, spiralling house prices mean many families are now liable for inheritance tax. The first £325,000 of the estate is inheritance tax-free. The government charges 40 per cent tax on anything over that.

Money over the threshold left to a spouse, through either marriage or a civil partnership is exempt. This is called the spousal exemption. In 2007 the threshold for married couples and those in a civil partnership changed. When the surviving member of a couple dies, their threshold for inheritance tax is double the threshold for a single person. This effectively makes the inheritance tax from their deceased partner transferable.

Some bequests and life-time gifts are tax-free, such as those between husband and wife. If one spouse leaves everything to the other, this avoids tax at the time of death of the first spouse but the problem is carried over to when the second one dies. When making your will, therefore, it is advisable to spread your assets, for example by leaving them to children as well as your spouse.

Home Buying Guide: Gazumping & Other Problems

Watch Out.....!!

Even if you have done everything possible to make things go well, there are unfortunately still a few stages where things can wrong. One of the major hitches encountered by home-buyers is gazumping, an ugly practice which can be both emotionally and financially draining for the gazumped buyer. Note that gazumping is widespread in England and Wales, but not in Scotland.

What Is Gazumping?

'Gazumping' is the term used to refer to when a seller accepts an offer from one potential buyer, but then accepts a higher offer from someone else. The first buyer is left in the lurch, and either has to offer a higher price or accept that they have lost that home and continue looking. This practice tends to occur in a market when house prices are rising are there are more buyers around than sellers.

The problem is that until contracts have been exchanged the sale agreement is not legally binding. Once your offer has been accepted, either you or the seller can pull out at any time until the exchange of contracts. Unfortunately agents are legally obliged to inform sellers of all offers made on their property, even after one offer has been accepted. But during this period between the acceptance of your offer and exchange, you as the buyer spend a considerable amount of money on surveys, solicitor's fees, and confirmation of your mortgage offer. If the sale falls through you do not get this money back, and have to fork out all over again next time round - that is, unless you have been put off the idea of buying a new home. If you are part of a chain of sales, you could even be affected by someone else being gazumped.

The Scottish system of conveyancing has effectively eradicated most cases of gazumping. In Scotland a seller must provide written acceptance of a successful bid. This is legally binding and is further supported by Scottish solicitors' code of practice, which forbids working for a client who is seeking other offers after a written acceptance has been made.

How Can I Avoid Being Gazumped?

If it does happen there is nothing you can do, but there are some ways in which you can minimise the risk of it happening. 
  • Help speed up the sale - the faster it is, the less opportunity there is for the seller to pull out.
  • Choose a seller whose agent has a policy on gazumping, if at all possible. Some agents insist that the seller signs an agreement to turn down any offers after one has been accepted.
  • Keep in regular contact with the seller's agent - tell them when you have completed the survey and received a formal mortgage offer. This way they can be sure that the sale is progressing and are less likely to be tempted to consider any other offers.
  • Make a pre-contract deposit agreement. This involves both parties paying a deposit of 1.5% of the agreed purchase price to a stakeholder, and signing an agreement saying that contracts will be exchanged within four weeks. If one side withdraws from the sale, the other party receives both deposits. If you are a gazumped buyer you therefore get some compensation. This is not a water-tight agreement as either party can pull out if they are willing to lose the deposit, but it definitely reduces the risk.
  • Draw up an exclusivity agreement with the seller after your offer has been accepted. In return for a fee, this gives you exclusive rights to the house as long as contracts are exchanged within a certain period. Few people make such an agreement as it involves hiring a solicitor, but it is worth considering.
  • Take out insurance cover to protect you if your deal falls through. This is yet another expense, but you might be glad of it if things do go wrong.
  • Insist that the house be taken off the market once your offer has been accepted. Check that the board outside the house has a 'Sold' sign on it, and contact the agent if it does not.

Top Tip: If you are gazumped, emphasise to the agent and seller how keen you are on the property. If the buyer whose offer they have accepted pulls out, they may contact you to ask if you are still interested.

Other Potential Problems To Look Out For

There are a few other situations which you may find yourself involved in which it is worth thinking about as you may need to take extra care.

The Chain Situation

This is where there is a whole chain of buyers and sellers: for example, you are buying a house but you can't complete the purchase until your own house is sold; in turn, the buyer of your house can't buy until they have sold their own house; and so on and so forth. If you are part of a chain, your own purchase may be affected if someone a few links down the line pulls out of their sale or purchase, or if someone else is gazumped. If you are not part of a chain, this could encourage a seller to accept your offer over someone else's as there is less risk of the sale being delayed.

Contract Races

If there are two or more potential buyers for a house, the seller may send out contracts to more than one set of buyers. The buyers then have to race each other to send a deposit and the signed contract gets the home. Solicitors are legally obliged to inform any buyers involved that they are in a contract race. Contract races normally only happen when there is a shortage of houses or rising prices. Be careful - you may win, but if not you could lose a lot of money from all costs you have in the period before exchange of contracts, so only get involved if you have a very good chance of winning.

Home Buying Guide: Making Complaints

Introduction

During the course of buying your home, you have to deal with a number of professionals, including surveyors, solicitors and mortgage lenders. It is possible that you will not be happy with their services, and may even lose out financially or in other ways due to negligence on their part. This section suggests what action you may take if you find yourself in such a position.

With all complaints, you should first of all write to the professional or company in question stating what exactly you are not happy with, how it has affected you, and what kind of response you are wanting - do you want a refund, compensation, or some other result? Remember to keep a copy of this letter. If they refuse to accept your complaint, you can pursue the matter further with the relevant professional body. Surveyors, solicitors and licensed conveyancers all have bodies regulating their profession.

What if I Am Not Satisfied with my Estate Agent?

Remember, estate agents act for the seller and not the buyer, but if you are concerned that some unethical practice has taken place during the transaction you can complain to the Property Ombudsmanor to the Office of Fair Trading.

What if I Am Not Satisfied with my Surveyor?

If your surveyor has shown negligence, by not pointing out defects which cost you money later on, you may be able to claim back the financial costs incurred by you as a result. You have a right to sue in court. Just remember that a surveyor can't always find every fault as some parts of every building are inaccessible - they will not, for example, drill holes in walls, pull up carpets and floorboards, or take any personal risks.

If your surveyor has refused to compensate you after you have complained as advised at the beginning of this section, you have the right to take the matter further. All companies who are members of one of thesurveyors' professional trade associations have to follow standard complaints procedures. These associations' members all have access to a professional arbitration scheme set up in 1998 whose findings they, and you, are obliged to accept. If the company is not a member of either of these bodies, the case will have to be heard in court. For more details, contact The Chartered Institute of Arbitrators.

If your surveyor has not caused you any financial loss, but you are dissatisfied for some other reason, you may still be able to make a complaint. Contact the RICS Professional Conduct Department.

What if I Am Not Satisfied with my Solicitor?

If you are not satisfied with your solicitor's services but this has caused you no financial loss, you may have the right to make a complaint to the Solicitors Regulatory Authority (SRA). The SRA has disciplinary powers and can order compensation or a refund of your fees up to £5,000. When you write your initial letter of complaint to the solicitor, try threatening to contact the SRA if they do not satisfactorily respond to your complaint - this in itself may achieve the desired result.

If, in turn, you are not happy with the way the SRA has dealt with your complaint, you can complain to the Legal Services Ombudsman.

If you have suffered financially as a result of your solicitor's negligence, you can claim for compensation. Reasons for this happening could include, for example, steps not being taking to ensure the seller's mortgage is paid off on completion of the sale, or missing an important restriction or other information during the inquiries. Solicitors are legally obliged to hold negligence insurance; contact a different solicitor if you need to make a claim on this insurance as the SRA will not deal with negligence claims.

Remember to contact your solicitor before notifying the regulatory bodies, as described in the introduction to this section.

What if I Am Not Satisfied with my Conveyancer?

If you are dissatisfied but have not suffered financially, contact the Council for Licensed Conveyancers (CLC) who fulfil the same disciplinary role for licensed conveyancers as the SRA does for solicitors. Remember, if a conveyancer is not licensed it is illegal for them to charge for their services.

If you have suffered financial loss as a result of your conveyancer's negligence, you can claim for compensation. As in the case of solicitors, conveyancers are legally obliged to hold negligence insurance; contact a different solicitor if you need to make a claim on this insurance as the CLC will not deal with negligence claims.

 

Selling Your Property

It's never been easy to sell property. But, since the advent of the Internet, selling a home has never been easier, because of the new routes to match homebuyers and home sellers. Many of the new offerings will also save you a substantial amount of money while giving you greater control over the house sale.
Traditionally most people have entrusted the selling of property to the experts in the estate agency business, with a minority opting to sell their property privately without the help of an estate agent. Home.co.uk is pleased to offer help and advice, however you want to sell property.

Private Property Sales

Selling your home privately not only enables you to save thousands of pounds, it makes sense from a marketing point of view. The Internet offers an enormous advertising medium and we can expose and promote your property to a huge audience of potential buyers.
It used to be difficult to market your property: you were limited to newspaper adverts, for-sale signboards and word-of-mouth. Now there's a host of websites on which you can promote your property sale to anyone with Internet access across the UK and around the world. 
  • Please see Selling Property Privately
  • Or visit our Private Property Sales Directory for a list of private sales websites

Selling via an Online Estate Agent

If you're feeling less confident or simply don't have the time to manage a private property sale then it's probably best to enlist the services of an estate agent to conduct the sale of your property.
When choosing an estate agent one new option is to use an online estate agent. Online estate agents offer similar services to traditional estate agents but generally charge a much lower commission. What's more: they really know how to get your property sold quickly using the power of the Internet. 
  • Please see Selling Property With An Online Estate Agent

Selling via a Traditional Estate Agent

The vast majority of properties are still sold via the traditional local estate agent. 
  • Please see Selling Property Via An Estate Agent
  • Or visit our searchable Directory of UK Estate Agents

Selling a Property at Auction

Property auctions are a very effective way of selling a home quickly. If you simply don't have the time or patience to find a home buyer on the open market a sale at auction may be your best solution.

Home Selling Guide: An Overview Of The Stages

If you are selling a house, you have probably also bought it and therefore you have already gained some insight into the world of property dealings. Selling a house is a bit different from buying one, however. This guide is both an introduction for sellers who have not handled properties before, and a memory-aid for experienced property sellers.

Preparation

  • Decide on how you want to sell your house, whether privately, through an estate agent, or at auction
  • Estimate the costs involved in the sale
  • Make your house more attractive to the buyer by cleaning and doing necessary repairs, maybe even refurbishing

Valuation and Marketing

  • Carry out a property valuation
  • Create public awareness of your sale
  • Arrange and conduct the viewings

Negotiation

  • Field the offers and push for higher prices
  • Decide on the best offer

Conveyancing

  • Either instruct a solicitor or do it yourself

Home Selling Guide: When To Sell

You obviously want to sell your house when the market is strong and demand high. Therefore, it is advisable that you keep an eye on the property market and time your sale well. Generally, the market tends to be stronger in early and late summer than the rest of the year.

Another point to look out for are low interest rates. Few people are willing to take out a £150,000 mortgage when the Bank of England has just voiced intentions of raising rates by two percentage points. Also, you should co-ordinate your sale with others in the neighbourhood. If there are already three For Sale signs on your street, it might be better to wait a bit.

In order to time your property sale well, get an overview of the property market by checking what properties similar to yours are selling for. Ask Estate Agents what they are selling and search online property transaction databases for sales in your area.

The Chain

If you are not only selling your home, but also looking to buy a new one, we recommend that you put your house up for sale before you start looking for new properties. This way, you will be able to time the process much better because you will have an idea how quickly you can sell, and you can estimate the possible price range for your new home.

Home Selling Guide: Costs Involved

You should have a rough estimate of how much the whole selling process will cost you. This helps you to adjust your financial priorities and prevents you from unpleasant surprises when the bills start coming in. Please keep in mind that these are only guidelines for estimates - how much you end up spending always depends on your individual circumstances.

Costs of preparing your house for sale

It is eventually up to you how much you want to spend on getting your house ready for sale. If you are a DIY expert with all the necessary materials to hand, you can end up spending very little money and a lot of time on repairs and refurbishment. If you are not, however, you will have to pay someone to do it for you. Make a list of things that have to be done and get quotes!

Selling fees

These costs depend on how you decide to sell your house.
  • Estate Agent fees: Agents normally charge a percentage-based commission -
    usually 2-3%. This means that the higher the sale price of your home, the more money the Agent will earn.
  • Auction fees: Usually amount to 2% of the selling price. Check whether you will be charged separately for advertising and cataloguing. Keep in mind that you will have to pay the latter even if your house is not sold.
  • Private sale: You will usually incur some costs for marketing and advertising. The advantage is that these are one-off costs unrelated to your property's sale price, so clear budgeting is easier.

Energy Performance Certificates

When selling your home you will need an Energy Performance Certificate (EPC). You must have commissioned the EPC before placing your home for sale on the market, but you can start marketing your home before the EPC is received. EPCs provide 'A to G' ratings for the home's energy efficiency and carbon emissions, as per EU regulations. EPCs tell homebuyers the current average costs for heating, hot water and lighting for the property as well as how to cut costs with energy-efficiency measures. You can find out more about EPCs on the Directgov website at www.direct.gov.uk  and learn more about prices using our EPC Quote pag

Selling Homes in Scotland

All homes marketed for sale in Scotland require a Home Report, with only a few exceptions. Find out more about the cost of selling your property in Scotland by obtaining a quote for a Scottish Home Report.

Conveyancing

Unless you are a legal expert, you will have to hire a solicitor for the legal and administrative aspects of the sale. Although your expenditure will be lower than when you buy a house, solicitors will still charge you according to the price band your property is in. This can amount to anything between £250 and £500.

Home Selling Guide: Who Will Sell Your Home

If you have already bought a house and dealt with an Estate Agent you trust, the question of who is going to sell your house might not even arise. Conversely, if you have had some very bad experience with an Agent and told yourself 'never again!' you can skip this section, too.

All others, however, should consider the following three points before they make a decision regarding the method of selling their property.

  • Money - If it is your overriding priority to make as much money as possible out of the sale, you should definitely sell your house privately. This way you are in absolute control of marketing expenditure and do not have to pay any commission.
  • Time - If you need to sell your house as quickly as possible, go for the auction option. This guarantees you a completion of the sale within 28 days of the auction, thus giving you an assurance that the other options do not have.
  • Convenience - If you simply do not have the time or the will to bother with adverts, viewings and negotiations, while at the same time looking for a new property, handling three children and performing your daytime job, the best method for you is doubtlessly to instruct an Estate Agent. Although the most expensive way to sell a house, many people prefer to stand back and leave it to the professionals.

Home Selling Guide: Valuation

No matter how you decide to do your sale - always carry out an independent property valuation first. This helps you to estimate how much your house is worth and where to set the asking price. Chartered Surveyors not Estate Agents carry out independent valuations. Estate Agents provide a marketing service for your property; they don't provide underwritten valuations. It is a common misconception that Estate Agents value your property for you; they simply give you a very intuitive estimate of what they think your house is worth. Moreover, their estimates might be influenced by their motivations; they might set the asking price too high to secure your instruction or too low to obtain a quick sale.

It is perfectly possible for you to perform your own estimate of your house's market value by comparing the prices that similar properties in similar locations have been sold for recently. For further information, have a look at the Property Valuation for Home Sellers guide.

Home Selling Guide: Estate Agents

Estate Agents have a mixed reputation and some have fallen into disrepute lately, as a result of unfavourable news coverage. However, over 90% of properties are still sold via an Estate Agent. It is true that, apart from the OFT, there is no independent body regulating all Estate Agents, and that Agents do not need any qualifications to practise their profession. The Property Ombudsman (TPOS) has introduced a complaints procedure which should cover most agents and it is also possible to complain to the Office of Fair Trading.

Instructing an Estate Agent can really help you to sell your property, especially if the property is in any way unusual or if it is the first one you have tried to sell. Ideally, an Estate Agent will provide all the following (and more): 
  • Help and advice - whilst you navigate the selling process and set a price
  • Marketing of the property as widely as possible
  • Several possible buyers
  • A good value service

However, it is worthwhile knowing some basic rules when dealing with Estate Agents.

Estate Agents' Services

Estate Agents can perform the whole selling process from the beginning to the end for you. If, however, you do not just want to sit back and let the Agent handle everything, you should make this clear from the outset. In order to maintain a good working relationship with your Estate Agent, it is important that you decide on how much you want to participate, and let the Agent know about it.
  • Suggest an Asking Price

    The first thing an Estate Agent will do is to suggest an asking price. As mentioned above, you should not take their suggestion at face value but get your own idea of how much your property is worth. Factors that play a role when setting the asking price are the time frame in which you want to sell your house and the strength of the property market.

    Take your Agent's suggestion into account, but do not rely solely on it!

  • Presentation and Advertising

    This is one of the key functions of an Estate Agent. Your Agent will take pictures of your house and compile a list of property details to put into a standard format for presentation. Make sure to tell your Agent about all the plus points of the property which he might not notice in one visit. Furthermore, confirm that you can check the presentation materials and property description before they are posted on listings and websites.

    The form the advertisements take vary from Agent to Agent, but most will list your property in their windows and brochures. Some also place ads in property magazines or local papers, while most have a website with property listings. A good Estate Agent will make sure that the advert reaches the target audience. As most buyers now start their search for a home online it is more important than ever to ensure that your chosen estate agent advertises widely on the web. Before choosing an estate agent you should compare your local Estate Agents' online property advertising, selling performance and average property price by looking them up in the Home.co.uk Estate Agent Directory.

  • Arrange Viewings

    If you want your Agent to arrange and perform the viewings, make this clear from the outset, otherwise you might incur additional charges. On the other hand, you might prefer to show potential buyers around your house yourself in order to point out all its advantages. Most Estate Agents are fairly flexible when it comes to this
  • Negotiation

    Estate Agents are professionals in negotiation. Yet the same problem arises as with property valuations: an Agent's motivations might compromise his performance. He might be more concerned about securing a quick sale and advise you to accept the first offer that comes along. Or he might be so keen on pushing up the price as high as possible that he scares away potential buyers with his negotiation techniques.

    We generally recommend you to have a fairly good idea of how much you want to (and can reasonably) get for your house, and to stick to it. If your house really does not sell, you can still make adjustments at a later date.

    If you are a hard-nosed haggler who has already beaten down Tunisian cloth vendors and used-car dealers, you might prefer to take care of the negotiations yourself. There is nothing keeping you from it – just let your Estate Agent know!

The Cost

Typically, an Estate Agent will charge you between 2 and 3.5 per cent of the sales price as a commission, but their fees are usually negotiable. One thing to keep in mind is that your Agent might make a lot of profit if you are selling a mansion, but a one-bedroom flat in a shabby building in outer Sheffield won't pay for his children's education. Consider this before you try to push him below 1.5 per cent.

It is not recommended simply to go for the Estate Agent with the lowest fee. Read the small print of the contract and make sure the amount and quality of advertising is sufficient! An Agent's commission is usually based on whether there is one or more Estate Agency instructed with the sale. If the Estate Agent is the sole agency, which means they have the exclusive right to sell your home for about six to eight weeks, the commission will probably be lower than if you have a joint sole agency (you instruct two Agents to work together on your behalf and share the commission) or a multiple agency agreement, in which case several different Estate Agents compete to sell your house and do not share the agreed commission.

Do not forget that you will be charged VAT of 20 per cent of the Estate Agent's commission. If your property is sold for £300,000 and your Agent charges 2.5 per cent commission (£7,500), you will end up paying £1,500.00 in VAT!

The Contract

Some common sense advice: before you sign the contract, read the small print and negotiate any contentious terms. You should make sure the time frame for the agreement is set properly; it does not usually exceed 3 months, after which you are free to switch Agents if you are dissatisfied. However, if you have a sole agency agreement, we recommend you push the term down a bit to approximately 6 weeks.

Home Selling Guide: Selling Privately

Before you become over-enthusiastic at the thought of what you will buy with the 3 per cent Estate Agent commission you are saving, consider the amount of work that a private sale involves. If you are also buying a new property, consider it again! This might well be one of the most stressful things that you have done in your life! If you are still up for it by now, read on. The following is a list of things you will have to do.

  • Set the asking price - it should reflect the property's market value, but you might want to add a negotiations buffer bonus.
  • Let people know about your sale - there are various ways of generating publicity. The most obvious is the word-of-mouth approach, but you can also put adverts in newspapers and property magazines, put your house on internet property listings, and put up a colourful For Sale sign. There are no limits to your creativity.
  • Hold Viewings - show people around your house and try to make it look as good as possible. When it comes to property viewings, the first impression is crucial. Try not to sound like a salesperson - potential buyers might get suspicious if you are overly enthusiastic.
  • Negotiate - a lot of money might be at stake, so you should be prepared for negotiations. Read our tips on negotiations in order to brace yourself for the inevitable haggling.

 


Home Selling Guide: Selling At Auction

Selling at auction is best for people who want to sell their house as quickly as possible. But remember to pack your bags in time - you will have to hand over the keys 28 days after the auction date.

Make sure you choose the right auction house. This involves picking an auctioneer who offers property similar to yours within the same price range. Choosing an unsuitable auction house greatly diminishes your chances of getting a favourable deal on your house. Also, obtain a property valuation before you decide on the reserve price in order to protect yourself against a highly unfavourable sale.

The Costs

The auctioneer will charge you for the advertisement in brochures and catalogues, a cost that you will have to cover regardless of whether your property is sold or not. You will also have to pay a commission of around 2.5 per cent of the sales price. Before signing any agreement, find out about all the expenses you will have to cover, even if your house is not sold.

Proceedings

  • Set the reserve price - this is based on your valuation; however, you should consult with the auctioneer before setting the price.
  • Prepare a contract - instruct your solicitor to prepare a contract which contains the terms and conditions of the sale; this will be included in the auctioneer's brochure.
  • Open your property for viewings - potential buyers will want to have a look at your house, and some will even want their surveyors to inspect it.

Completion

When the hammer falls, the sale is official and legally binding. The buyer will have to pay you 10 per cent of the agreed sales price straight away, the outstanding balance within 28 days after the auction. If he fails to do so, sue him!

Which properties to sell at auction

There are certain types of properties more suitable to be sold at auction than by normal means. These include: 
  • Houses that would be hard to sell by traditional means, because they are in a very bad state of repair and need substantial investment. You might not get very far advertising the miserable leftovers of a former factory with a local Estate Agent.
  • Repossessed houses - they usually need to be sold as quickly as possible to cover the former owner's debts.
  • Unconventional properties - they are difficult to value and often bought by aficionados for their individuality. You can get a much higher price for a lighthouse in Cornwall selling it at auction than by putting an advert in your local paper.
  • Properties that are in high demand in the heat of an auction, the price paid for such properties can exceed their estimated market value . If you have ever seen the bidding wars ensuing over art at auctions, imagine what your East London penthouse might sell for!

The Disadvantages

You can never know how much your property will sell for. An auction is a highly volatile marketplace - if there is no demand on the day of your sale, you might end up selling it below its market value.

You will have to pay your solicitor to be present at the auction in order to sort out any last-minute irregularities and answer questions. Depending on how enthusiastic your solicitor is about travelling, this can be quite a costly affair.

Some people feel their privacy is violated at auctions, since the properties have to be open to potential buyers and their surveyors.

Selling your house at auction can be more expensive than selling it via an Estate Agent. Also, you will have to cover certain expenses even if your property does not sell.

Home Selling Guide: Preparing Your House For Sale

Before you start welcoming potential buyers for viewings, spend a bit of thought, time, and maybe even some money on polishing up your home. Although a clean bathroom or freshly painted kitchen ceiling do not increase the value of your house substantially, they improve the overall impression of your house and thus help to convince hesitant buyers.

Remember, the better your house looks, the more people will consider buying it, the more quickly you will get it sold and the higher the price you will eventually get for it. Sounds good, doesn't it?

Repairs

Address any major and minor faults in the house, things that you actually wanted to do ages ago but never had the time to tackle: 
  • Get rid of damp and dry rot
  • Check that all the doors and windows open smoothly
  • Fix the roof
  • Replace dead light bulbs
  • Fix dripping taps
  • Mend loose or broken handles
  • Check that all cupboards and drawers open and shut well
  • Make sure that your doorbell works
  • Stick peeling bits of wallpaper back to the wall
  • Fill small cracks with a thin layer of filler and sand them down
  • Paint over any dirty patches on the wall

Refurbishments

Nowadays, many people are too busy or too lazy to undertake any major revamping after having bought a house. Therefore, you will be able to attract much more interest with a nicely done-up property. Use neutral cream colours and refrain from eccentric design ideas.

A cost-effective way of getting the most out of your renovation is to play to the property's strength. Refurbish open fireplaces or ceiling ornaments. Emphasise large windows, high ceilings and wooden floors.

Outside Edge

The first thing a potential buyer will see of your house is its exterior. Follow the same approach as inside and make sure that everything is clean, tidy and in a good state of repair. This includes doing up your garden, steps, front door, elevator and whatever else there is between the street and your front door. Make sure that there is no rubbish lying around and that the neighbour's dog has not used your front garden as a loo again.

Clean & Tidy

Doing a bit of cleaning before you show your place to others does not involve any costs, but is extremely effective. Potential buyers will feel much more comfortable in a tidy and well-groomed house, and it will look more spacious, too.

Tidying the place and getting rid of the accumulated junk of the past years will make it much easier to clean too. Bathrooms and kitchens especially should be clean and hygienic. Remove any lime-scale and greasy remnants of past meals. Washing your carpets and curtains will do miracles to a house, and cleaning the windows is not a bad idea, either.

Home Selling Guide: Viewings

Now that your whole home is looking fabulous, you can start showing it off, too. If you prefer to show people around the place yourself, there are some rules and tips you should keep in mind.

  • Look appropriate

    Don't greet potential buyers in your pyjamas or with a deep-cleansing facial mask - you might scare them away.
  • Be polite

    People prefer to buy from someone they get on well with, so be nice, offer them something to drink and smile.
  • Don't lose your temper

    Even if someone makes an (in your opinion) inappropriate comment on the lovely pink curtains your aunt gave you for your wedding, try to remain cool and detached. If the buyers are well-informed, they will keep critical records of every house they visit; this is not a personal offence.
  • Don't cling to the viewers

    Show them around, but leave them some space and time to themselves. They are probably choosing their future home, so don't try to rush them.
  • Answer their questions

    Viewers will want to know about many things, so it is best to have a list with answers at hand. Buyers will want to know some of the following: 
    • how many potential buyers have seen the place and / or made an offer;
    • why you are selling;
    • whether you have experienced any problems (e.g. theft) in the neighbourhood;
    • what is to be included in the sale (have a list ready!);
    • how much utility bills amount to;
    • how much you have paid for the property.

When answering their questions,be honest! You do not have to tell them straightaway that your house has been on the market for months now, but if they ask you specifically, you have to tell the truth. First, because it is quite likely you will be found out and lose the sale; secondly, because if sellers start acting unethically, the whole process of buying and selling houses could become a big mess.

We live in a dangerous world, and although it is possible that all the people who come to look at your house are reliable and trustworthy, there are some rules to follow to guarantee your personal safety:

  • Make sure you are not alone when you let people into your house
  • Do not leave any valuables lying around openly
  • Do not leave viewers alone in a room for a long time
  • Do not let people into your house on an ad hoc basis
  • If anyone rings your doorbell and want to have a look around, take their details and arrange a date for a viewing

Weighing Up the Buyers

This is your opportunity to get to know potential buyers and find out whether they are trustworthy, serious in their interest, and have the necessary cash at hand. Things you should find out include: 
  • whether they have a mortgage agreement in principle yet and how much they can afford;
  • how many other properties they have seen and how many offers they have made (this helps you assess how serious they are in their interest);
  • how soon they want to move.

Just as the buyers are keeping notes on you and your house, you should make notes about them. This includes contact details, the answers to the questions above, and your personal impression. Keeping a record helps you to make a decision once the offers start coming in.

What Not To Do

One general rule is never to make any promises you might not be able or willing to keep. No matter how sorry you feel for them, being only 25 years of age, with two children and working for the minimum wage - this is a business, not a charity, and you did not get your house for free, so you probably do not want to give it away below value either. Another rule, as mentioned above, is not to lie to buyers.Let's introduce some Kantian ethics into this whole thing - being dishonest when selling a house is simply not on.

The Chain

Buyers will want to know whether you have already found a new place to buy, and when you are expecting to move. It is important that you are completely accurate in your answers, since they have to rely on this - otherwise the whole chain can break down.

Similarly you should find out what stage they are at in their property sale. The best type of buyers are the ones between homes, meaning they have sold their house already and are living in temporary accommodation. They are experienced and flexible in their timing.

Buyers who have already put their house on the market have at least made the first step already, but neither you nor they can be sure when they will actually sell their place. If they are dependent on the sales money to buy a new place, you should be flexible in your timing.

If the buyers have not put their house on the market yet but are dependent on the proceeds of the sale to purchase, you should not give them serious consideration.

Other Types of Buyers

  • First time buyers can be relatively easy to deal with. They have usually sorted out their mortgage and are not part of a chain. While they are probably honest in their interest, their budgets might be quite tight, restraining negotiations.
  • Buy-to-let investors are usually professional and efficient in their dealings and you should not have to worry about the money. However, they can be merciless and cold-blooded when it comes to the haggling part.
  • Browsers are unpredictable since they have not made up their mind yet. Approach them carefully!

Home Selling Guide: Negotiations

Two things to keep in mind: a house sale is a process, not an act, and house prices are flexible and negotiable.

Who Negotiates?

As we already mentioned in the Estate Agent section, you have instructed a professional to sell your house so you can decide whether you want him to do the negotiations or do it yourself.

If the Estate Agent conducts the negotiations you are leaving it to a professional haggler. Most Agents will try to get as high a price as possible for you, but his efforts may be compromised by the fact that he wants to sell the property as quickly as possible - a high turnover is more profitable for him than a marginally higher sales price. Make sure you keep all lines of communication open and discuss every move with him - at the end of the day, it is your house we are talking about.

If you conduct the negotiations you should know that the initial offer is usually 5 to 10 per cent below your asking price. These are the rules of the game, and buyers expect you to know this and to have set the asking price artificially high.

A negotiation involves two parties: do not make too many concessions without getting something in return. If the buyer and the seller eventually meet in the middle, it should be because both have budged a bit. Remember: you are the seller. You can decide who to sell to or not. You are naturally in the stronger position.

The Offers

As mentioned above, initial offers are usually below your asking price in expectation of negotiations. There is no need to accept or reject an offer straightaway; find out the buyer's position first by engaging him in some bargaining. Neither do you have to inform the buyer about any decisions you have made straightaway. It is perfectly normal for a seller to take a day or two to think things over and then let the buyer know.

It is not a good idea to simply go for the highest offer you receive - there are other important factors to keep in mind when deciding who to sell you house to (see below).

Gazumping

Even when you accept an offer, it is not legally binding until contracts are exchanged. However, if you intend to change your mind as soon as a higher offer comes along, you should tell the buyer so before accepting his offer. Although (unfortunately) not illegal, it is not good practice to simply drop the buyer after he has paid for legal and administrative expenses.

Choosing a Buyer

At some point, you will have to decide who to sell your house to. When choosing a buyer, there are several factors you should take into consideration: 
  • High offers. The price is obviously the most important consideration, but by no means the overriding one.
  • Agreement in principle. This is a mortgage guarantee issued by the lender and assures you that the buyer actually has the necessary funds to buy your house. Make sure your buyer has one.
  • The chain. If buyers rely on the proceedings from a sale this poses a disadvantage to you, since one fault in the chain can cause a breakdown and upset your entire time-scale. Look out for first-time buyers, buy-to-let investors, cash buyers and buyers between homes./li>

Your position

Your own negotiating position is influenced mainly by the number of offers you have received. It all boils down to the simple interplay between supply and demand. The more potential buyers, the more likely that you can play them off against each other or even trigger a bidding war. Your negotiating position depends on: 
  • Level of interest. To repeat: the higher the demand, the higher the price you get for your property. This is the single most important factor influencing your position. This is why we recommend selling in early or late summer, when demand is usually highest. But if you have a good property, there will be many potential buyers irrespective of the season.
  • Time pressure. If you need to sell your property quickly, because you need the proceeds to buy a new house or whatever, your position is obviously weakened. In this case, considerations such as the type of seller (i.e. his not being part of a chain) are more important than the amount of money they offer.
  • Strength of the market. When interest rates are low and the neighbourhood you live in is becoming more expensive due to recent developments, you will be able to negotiate a much higher price. To get an overview of the condition of the property market in your area, check out the prices of properties sold recently. This can be done easily via internet property transaction databases.
  • State of your property. If your property is in a bad condition, interest will obviously be lower. It is not advisable to wait for too long, since the longer the property is on the market, the lower the price you will get for it. Therefore you will have to be a bit more flexible when considering offers.

Just to remind you

Do not, ever, ever, take risks like exchanging contracts on a new home without having sold your old one! If the buyer pulls out at the last minute, you are left in the highly awkward position of having to scrape together a couple of hundred thousand pounds within about a week. This is a situation good for screenplays, but not that entertaining when it is you who has to worry about losing a finger-nail for each day you cannot pay.

Another thing to keep in mind is not to let any personal issues get in the way of a successful, profitable sale. No matter how much you dislike the people who are about to buy your beloved home, if they are cash buyers and offer you a high price, it would be stupid to let this transaction fail.

Offer accepted

For a good impression, send a letter of confirmation to both the buyer and the Estate Agent once the sale has been agreed. Spell out all the details, dates agreed for exchange of contracts and completion, and attach a list of the items to be included in the sale.

Although this is not a binding document, it gives the whole process an official and professional touch and helps to eliminate any doubts.

Home Selling Guide: Conveyancing

The legal and administrative process is the reason property purchases take a long time.

Although as a house seller there are less administrative issues you have to bother about, it is still recommended that you hire a professional solicitor or conveyancer. The legal aspect is highly important, and you should not run the risk of inaccuracies that might cost you dear later on. Since conveyancing takes on average 2 to 3 months, it is safe to get a solicitor as soon as you decide to sell your house. It will not cost you any more to instruct him early, so you can avoid serious delays by getting him to set up legal documents like the contract when you start advertising.

The Tasks

As a seller, your administrative duties are not as extensive as the buyer's. Still, you will need to get a solicitor as soon as you accept an offer in order to take care of the following tasks: 
  • Sale agreement. The solicitors will exchange contact details and letters specifying the particulars of the sale.
  • Title deeds. Your solicitor will have to obtain the property title deeds for the lender. They will be sent back to your solicitor at a later stage.
  • Property information form. List of all the details to be included in the draft contract. Have to be checked and approved both by you and the buyer's solicitor.
  • Answer buyer inquiries. The buyer's solicitor will send a list with questions concerning property details, tenure, utilities, items to be included in the sale etc. to your solicitor. This should erase any ambiguities as early as possible.
  • Draft contract. Your solicitor might have done this as soon as you instructed him. This is not a standard contract and will probably be changed quite a lot before you sign it. The draft consists of two parts: 
    • The Particulars of Sale spell out property details and items to be included in the sale.
    • The Conditions of Sale concern the proposed completion date and deposit required on exchange of contracts.
    As soon as the title deeds are returned, your solicitor will send the draft contract to the buyer's solicitor. When completion date and terms of the draft contract have been agreed by the solicitors, it will be sent to you for approval. As soon as approved, standard contracts will be set up and sent to you for signature.
  • Sign contract. After signing, send the contract back to your solicitor. Remember , until contracts have been exchanged, the whole thing is not legally binding!
  • Exchange of contracts. Now there is no way back. Each party signs all the contracts and sends them back. It is done.
  • Receive deposit.You will now receive the buyer's deposit, if there is one.
  • Transfer of money. The buyer's mortgage lender will send the money to your solicitor by electronic transfer.
  • Transfer of deeds. Now you are no longer the owner of the house.

The Costs

Solicitors either charge a fixed fee (usually between £250 and £750), or a percentage of your house's sales price (usually 0.5%). Make sure you get some quotes before choosing a solicitor and agree on his fee, in writing, before instruction.

The good thing about selling a property is that there are virtually no expenses that you have to cover for local authority searches, stamp duties and the like. All you will have to pay is a small Land Registry fee.

Home Selling Guide: Completion

The solicitors will agree a date for the exchange of contracts. As soon as you have signed the contract, the sale becomes legally binding for both parties. You will receive 5 to 10 per cent of the agreed sales price as a deposit, and your solicitor will set a completion date. Your solicitor will not release this deposit unless the seller defaults, but it may be used as a deposit for another house if you are part of a chain.

On the completion day, you will receive the outstanding amount of money (usually transferred directly to your account) and hand over the keys. Now you are at last able to pay for your new home (if you need to do so) and move!

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