Homebuyers Guide

Buying a new home or an investment property can be a daunting prospect.  Even experienced home buyers can find it a lengthy, confusing and complicated exercise.  

To make the task a little less daunting, we have put together a homebuyers guide. This step by step guide, based on years of industry experience and will ease you through the process from start to finish and help you to navigate around many of the common home buying pitfalls that any purchaser can encounter.

How much can you afford?

Once you have decided that you are going to buy property, the next step is to decide exactly how much you can realistically afford - which in turn will affect which types of property you should be looking at.

This must not only include the cost of the house itself, but also the other one-off expenses involved in buying a home and moving - which can soon add up.

These costs may include, but are not limited to;

- Arrangement fee by the lendor

- Lenders valuation

- Survey

- Legal conveyancing fees

- Stamp duty

- Local authority and other search fees

- House hunting fees

- Removal fees and a contingency fund

To do this you need to work out:

- The amount you will get from the sale of any current home

- The amount you can borrow

- The amount you have available in savings or investments

Once you have done this, work out how much the other one-off costs of buying and moving will add up to.

We would recommend that before looking at properties, you should consult a lender or mortgage adviser to see what your maximum possible loan would be. This will be based on the size of your deposit and how much you earn. Many people will wait until they have found the property before arranging their mortgage, however if you can get an "Agreement in Principal" from your chosen lender it can often convince the vendor that you are a genuine purchaser and put you in a better position to negotiate.

Choosing your home

Once you have decided to buy a house and found out how much you can afford, you can start thinking hard about what you want from your new home both now and in the years that you will live there.
Below is a list of some of the things that we believe you should consider when house hunting.

Choosing an Area

It is important to research each particular area before viewing lots of properties there. For example many of the suburbs of Newcastle, i.e. Jesmond, Heaton or Gosforth, differ significantly from each other. Also within each suburb any given street can have a different demographic living in it. Within West Jesmond many of the streets, like Lavender Gardens or Bayswater Road, may now be predominantly student lets while Highbury still remains the domain of professionals and families.

Even if you can get a bigger home for your money in an area that isn't so desirable, make sure that's what you really want. Remember that although you can make home improvements it is more difficult to change the neighborhood.

Although the internet is a great tool for searching through a vast quantity of properties and areas, simply touring the area can give you a good idea of what it is actually like.

Types of Property

To decide what type of property you want you are going to have to ask yourself some more questions:

- Do you want a new or an older house?

- Do you want a terraced, semi-detached or detached house, or even a flat?

If the answer is a flat, do you want an older style purpose-built flat such as a Tyneside Flat or a modern-purpose built flat or even a period conversion apartment?

A few common considerations are space, privacy, noise, parking, character and obviously price.

Another important decision to make is whether you want your property to be freehold or leasehold.

Freehold

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

Leasehold

Leasehold 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 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 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.

Tyneside Flats

A further arrangement to consider when purchasing in the North East of England is the Tyneside flat agreement. In this both the upper and lower flats are bought leasehold but the upper flat owns the freehold for the lower flat and the lower flat owns the freehold for the upper flat.

The rent is 'peppercorn' which appears to be a valid amount to put on your mortgage application, however in real terms neither owner pays anything. Sometimes if your solicitor is unfamiliar with Tyneside Leases it can make the sales process a little longer. This agreement does have some benefits, such as flats are jointly responsible for the building.

As with any of the information on these pages, each type of accommodation will have its pros and cons and it would be worthwhile having a chat with one of the professionals on Mansons Sales team, who will be happy to give you advice on each type of property in their area.

Viewing a property

Key Viewing Tips

Once you have found a property you feel you like, make sure you learn as much as possible about it at the viewing. It's a good idea to make notes and possibly take some photos, so properties can be remembered more easily and compared afterwards. If a property is of particular interest and a second viewing is arranged try and view it at a different time of day.

Some easy checks and actions to carry out on a viewing that Mansons would recommend are:

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?

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 is something to be seriously considered.

Structural Problems - Inside

Subsidence: Look for cracks in ceilings and walls, doors that stick or don't hang correctly.

Damp: Normally you can smell damp. Also look for mould, walls that are damp to the touch, flaking paintwork or wallpaper that is peeling off, are also signs of damp. Be wary of new paint or wallpaper that 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: Indicated 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.

Remember - don't cut corners.?Inspecting the property yourself DOES NOT avoid the need for a professional survey.

Making an offer

The nitty gritty.

Once you have found a property that you would like to buy, the next step is to make an offer, normally through the estate agent. In deciding what you are prepared to pay, bear in mind the properties state of repair and how much you would have to spend on building work or redecoration. Although the agent may have tried to factor this into the asking price they will normally be prepared to tell you this or whether the vendor will be open to offers.

If there are several potential purchasers interested in a particular property or the market is particularly strong the seller is more likely to hold out for the asking price, or might even be using the "Offers Over" system where you may have to offer in excess of the asking price.

Once your offer has been accepted, the estate agent will confirm this in writing in the form of a "Memorandum of Sale" which will also include any further information relating to the sale. You can then go ahead with having your survey arranged and finalizing your mortgage arrangements.

All purchasers should note that the acceptance of the offer is not legally binding until contracts have been exchanged. If a higher offer comes along then the agent must put this forward to the Vendor and this can create the temptation for the seller to abandon any previous offers and accept the higher one, a process known as "gazumping". Being gazumped could leave you both frustrated and out of pocket on expenses such as legal costs and survey fees but unfortunately is a risk you have to take.

Once your offer has been accepted the estate agent will want to know whom you will be using for your conveyancing. This will be a solicitor or a law firm who will deal with the legal side of the sale.

Finding a Solicitor

If you are first time buyer, you will not have to worry about selling your property before you can proceed but you will still need to find a solicitor to carry out the conveyancing on the purchase.

Conveyancing comprises the following tasks:

- Obtaining the deeds which legally prove the property belongs to the person who is selling it.

- Researching where the properties legal boundaries lie and passing this information on to the buyer.

- Preparing a fixtures, fittings and contents list which makes clear what exactly will be included in the purchase price, for example white goods or carpets.

- This enquiry form will also ask the vendor whether they are aware of any defects to the property that the buyer should know about.

- Advising the purchaser on a draft contract for sale, prepared by the sellers solicitor, setting out the terms of the purchase

- Carrying out a search of the local planning information to uncover details of any future developments which could affect the properties value.

- Agreeing a date for the completion which is suitable for both the buyer and the seller.

- Conveyancing often takes longer than expected but try to be patient as it is a very important process.

Conducting a Survey

Once the offer has been accepted, a survey is needed to assess the properties condition and value.?Your mortgage lender will require at least a basic valuation before approving any loan. Any surveyor that is used should be a member of the Royal Institute Of Chartered Surveyors or the Incorporated Society of Valuers and Auctioneers (now merged with RICS). Where the survey does reveal a serious problem, you are free to withdraw your offer. If the problems can be fixed, you may be able to use the survey results to negotiate a reduction in the sale price.

Closing the deal

Exchanging Contracts

With the survey completed and the lender happy with it you should be nearing the point where contracts can be exchanged. Your solicitor will need to have draft contracts ready for you and the vendor to sign.
At this point:

- Your solicitor should have completed all of the local searches, the surveyors report should be complete and have been accepted by all parties,

- You should have a formal mortgage offer in writing which you have read and understood,

- You have the agreed deposit available,

- You have agreed a firm completion date for the sale and this is noted in the contract and there are no outstanding issues remaining to be settled between you and the seller.

- When you have signed the contract, your solicitor will deliver it to the seller's solicitor in exchange for the contract the seller has signed. From this point both you and the seller are legally bound to the deal.

Completing and Moving in

All that remains after exchange of contracts is to pay the monies needed to buy the property, less any deposit already put down at exchange, on the agreed date. Your solicitor will receive the funds direct from your lender and the remainder from you, and then pass it onto the vendor's solicitor.

Once the payment has been confirmed the estate agent will release you the keys. Your removal men should have already been booked from when you found out the completion date and this time should have been used to get everything sorted before they arrive.

The best way to do this is to decide what will be going where in your new home and then label each package with a list of the contents and where you want it to go. Remember to pack the important items, such as champagne flutes, where you will be able to find them quickly and easily!

In the last couple of weeks before you move contact utility providers to let them know you will be moving out and arrange for readings to be taken. You may also want to contact the post office so they can re-direct any future mail. The council will also need to be notified so you are not liable for council tax at your previous address.

Congratulations!

You're there! Now you can relax in your new home and start organising your house warming party!