Dumb questions from a nervous first-time buyer
Discussion
Hi,
I'm 32 and after renting for years I've decided it's about time I got on the property ladder. I'm paying £625 ppm on a 1 bed flat and most mortgages around around £420 on the discounted 2 year rate and £500+ on SVR, so buying makes sense in that respect.
I've around £11500 in savings at the moment and have seen a property I'd be keen to make an offer on - it's currently on at £98K but hoping an offer of around £95K might secure it.
I'm fortunate enough to have no debts whatsoever and earn around £48K gross. I started a thread here a while ago on how I've got to where I am having been crap with saving.
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Anyhow, just few questions general questions I could do with some advise on:
1. I found what looks to be a very, very small patch of damp in the bedroom. I've asked the agents to check with the landlord if they'd be OK if I got a builder around to check. I thought this to be more sensible rather than paying £400 for a buyer's survey which I'm still planning on, only for a load of other problems to be uncovered. What are your thoughts? And whilst the builder's in there, what else would you have them check? Given that I'm looking to buy in the north west, what would you think sensible for a cost? And is a 'builder' the right person to approach?
2. The property is an end terrace converted into a flat. It's leasehold with 999 years remaining so nothing to worry about there, with round rent of £20 a year! I asked about the service charge but apparently the landlord is still considering this. The property was previously tenanted. I'm struggling to understand how they do not know what the service charge is. What are your thoughts?
3. I've enough for a 10% deposit, however it would only leave me with around a £2K buffer for other associated costs. Assuming the associated mortgage fees get added to the mortgage itself, I'm budgeting £750 for solicitor fees (neither party are in a chain, so should be simple enough), £500 for home buyer's survey and valuation fees of £300 and land registry fee of £2K.
Am I missing anything and are these figures realistic?
4. Ideally I'd like the whole process to take around 3-4 months - I know this seems ironic since I'm a FTB with no chain - but this gives me the opportunity to save another £1.5K+. What's the best way of relaying this to the seller/estate agents? I'd rather be honest from the start rather than appear to be stalling for time and it appear that I'm dicking them about.
5. At what stage do I have to pay my deposit? On completion, which might be months from now? Hoping this is the case!
Apologies for all the questions and if the questions are bit naive! I'm not hugely clued up or up on the lingo. If I'm honest I'm s
tting it a little bit. I've always enjoyed the peace of mind of not having any debt or commitments!
Thanks in advance.
I'm 32 and after renting for years I've decided it's about time I got on the property ladder. I'm paying £625 ppm on a 1 bed flat and most mortgages around around £420 on the discounted 2 year rate and £500+ on SVR, so buying makes sense in that respect.
I've around £11500 in savings at the moment and have seen a property I'd be keen to make an offer on - it's currently on at £98K but hoping an offer of around £95K might secure it.
I'm fortunate enough to have no debts whatsoever and earn around £48K gross. I started a thread here a while ago on how I've got to where I am having been crap with saving.
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Anyhow, just few questions general questions I could do with some advise on:
1. I found what looks to be a very, very small patch of damp in the bedroom. I've asked the agents to check with the landlord if they'd be OK if I got a builder around to check. I thought this to be more sensible rather than paying £400 for a buyer's survey which I'm still planning on, only for a load of other problems to be uncovered. What are your thoughts? And whilst the builder's in there, what else would you have them check? Given that I'm looking to buy in the north west, what would you think sensible for a cost? And is a 'builder' the right person to approach?
2. The property is an end terrace converted into a flat. It's leasehold with 999 years remaining so nothing to worry about there, with round rent of £20 a year! I asked about the service charge but apparently the landlord is still considering this. The property was previously tenanted. I'm struggling to understand how they do not know what the service charge is. What are your thoughts?
3. I've enough for a 10% deposit, however it would only leave me with around a £2K buffer for other associated costs. Assuming the associated mortgage fees get added to the mortgage itself, I'm budgeting £750 for solicitor fees (neither party are in a chain, so should be simple enough), £500 for home buyer's survey and valuation fees of £300 and land registry fee of £2K.
Am I missing anything and are these figures realistic?
4. Ideally I'd like the whole process to take around 3-4 months - I know this seems ironic since I'm a FTB with no chain - but this gives me the opportunity to save another £1.5K+. What's the best way of relaying this to the seller/estate agents? I'd rather be honest from the start rather than appear to be stalling for time and it appear that I'm dicking them about.
5. At what stage do I have to pay my deposit? On completion, which might be months from now? Hoping this is the case!
Apologies for all the questions and if the questions are bit naive! I'm not hugely clued up or up on the lingo. If I'm honest I'm s
tting it a little bit. I've always enjoyed the peace of mind of not having any debt or commitments!Thanks in advance.
I've just bought a house. Solicitors fees, land registry, all searches and a couple of indemnities (against an uncertified boiler and garage electrics) came to just over a grand. Land registry alone is under £100.
Took 3 months to the day to complete. It took that long because all the BTL customers had priority to get sorted before the tax changes came in.
Deposit is due upon exchange of contracts.
You earn more than my basic and my house is worth 3 times yours and it is more than manageable. That's not willy waving, it's encouragement to JFDI
Took 3 months to the day to complete. It took that long because all the BTL customers had priority to get sorted before the tax changes came in.
Deposit is due upon exchange of contracts.
You earn more than my basic and my house is worth 3 times yours and it is more than manageable. That's not willy waving, it's encouragement to JFDI
1) I'd personally get a surveyor rather than a builder. Obviously it'd depend on the builder, but I'd be conscious they may oversell a problem in the event you hire them to fix it. Just feel a surveyor would be more independent.
2) A service charge usually would be for communal areas of a flat, e.g cleaning, lighting, insurance if applicable. As it's a terrace flat there's nothing real communal. But yes, it is odd they haven't told you what it is. Once you get a definitive, get into detail what each item is and the costs involved to make sure a number isn't just plucked from the air.
3) You're way off on land registery with that price of house. I'd have thought it's only £150 max. Valuation fee's will depend on what mortgage you get. With the mortgage, make sure you shop around. If you know what you're doing, going direct is usually cheaper than a broker. Whenever I've checked it's cheaper to take a higher rate with no upfront costs once you factor in the effective monthly cost of whatever deal your own. Whilst it might be a higher rate, it can be cheaper. Nationwide were the best with help to buy recently but not sure about none help to buy.
This website is a godsend to save thousands. Nice and simple to use https://www.moneysavingexpert.com/mortgages/best-b...
4) Just tell them you don't have the deposit yet so if they are happy to complete in 4 months then everyone's happy. You will need to provide proof of deposit however before completion. So when you put in application and are currently short it could be a problem. Speak to your lender.
5) Yeah pay on completion. You usually pay a deposit to your solicitors, say 10% or something and then pay them all the costs and mortgage deposit on completion.
Best of luck.
2) A service charge usually would be for communal areas of a flat, e.g cleaning, lighting, insurance if applicable. As it's a terrace flat there's nothing real communal. But yes, it is odd they haven't told you what it is. Once you get a definitive, get into detail what each item is and the costs involved to make sure a number isn't just plucked from the air.
3) You're way off on land registery with that price of house. I'd have thought it's only £150 max. Valuation fee's will depend on what mortgage you get. With the mortgage, make sure you shop around. If you know what you're doing, going direct is usually cheaper than a broker. Whenever I've checked it's cheaper to take a higher rate with no upfront costs once you factor in the effective monthly cost of whatever deal your own. Whilst it might be a higher rate, it can be cheaper. Nationwide were the best with help to buy recently but not sure about none help to buy.
This website is a godsend to save thousands. Nice and simple to use https://www.moneysavingexpert.com/mortgages/best-b...
4) Just tell them you don't have the deposit yet so if they are happy to complete in 4 months then everyone's happy. You will need to provide proof of deposit however before completion. So when you put in application and are currently short it could be a problem. Speak to your lender.
5) Yeah pay on completion. You usually pay a deposit to your solicitors, say 10% or something and then pay them all the costs and mortgage deposit on completion.
Best of luck.
If you're having the survey done anyway, why not get it done and see what it says? They'd at least be able to confirm if it is damp and how bad if not why. You'll need one for a 90% mortgage.
A builder would be more useful but there are few guarantees it's what everyone thinks until it's done and fixed.
You've had some confusing answers on the deposit, you pay typically 10% on exchange which is a few weeks to a few months before completion, the completion date being agreed on exchange. This gives time for everyone go sort out the actual move.
Don't forget to work out when your current tenancy runs out and notifications times for that.
A builder would be more useful but there are few guarantees it's what everyone thinks until it's done and fixed.
You've had some confusing answers on the deposit, you pay typically 10% on exchange which is a few weeks to a few months before completion, the completion date being agreed on exchange. This gives time for everyone go sort out the actual move.
Don't forget to work out when your current tenancy runs out and notifications times for that.
Thanks for the replies.
I'll give the builder a miss for now, and it sounds like a full survey rather than a home buyer's report is the way to go if I want something detailed.
Ref. the land charges, my fault, I meant £200 and not £2k!
I've been using the guides and forums on MSE and found them very helpful. Although some on the forum reckon what I've budgeted for costs isn't enough and £5K is a better figure to be working with, and that I should hold out till I've got this. If the flat's gone then it's gone etc..
I'll give the builder a miss for now, and it sounds like a full survey rather than a home buyer's report is the way to go if I want something detailed.
Ref. the land charges, my fault, I meant £200 and not £2k!
I've been using the guides and forums on MSE and found them very helpful. Although some on the forum reckon what I've budgeted for costs isn't enough and £5K is a better figure to be working with, and that I should hold out till I've got this. If the flat's gone then it's gone etc..
It cost us a little under £5k to buy our house, survey, legal fees came to about £2k, maybe a bit more, the rest was SDLT. 98k will be lower on the SDLT.
We exchanged and completed simultaneously, so no deposit. I don't think a deposit on exchange is necessary for the seller as once contacts are exchanged they would have very strong legal claim for redress if you didn't complete. They could sure for specific performance of the contract and force the sale.
There are risks with simultaneous exchanged and completion, but you can weigh them up.
We exchanged and completed simultaneously, so no deposit. I don't think a deposit on exchange is necessary for the seller as once contacts are exchanged they would have very strong legal claim for redress if you didn't complete. They could sure for specific performance of the contract and force the sale.
There are risks with simultaneous exchanged and completion, but you can weigh them up.
paulrockliffe said:
It cost us a little under £5k to buy our house, survey, legal fees came to about £2k, maybe a bit more, the rest was SDLT. 98k will be lower on the SDLT.
We exchanged and completed simultaneously, so no deposit. I don't think a deposit on exchange is necessary for the seller as once contacts are exchanged they would have very strong legal claim for redress if you didn't complete. They could sure for specific performance of the contract and force the sale.
There are risks with simultaneous exchanged and completion, but you can weigh them up.
Cheers.We exchanged and completed simultaneously, so no deposit. I don't think a deposit on exchange is necessary for the seller as once contacts are exchanged they would have very strong legal claim for redress if you didn't complete. They could sure for specific performance of the contract and force the sale.
There are risks with simultaneous exchanged and completion, but you can weigh them up.
The flat's £98K so no stamp duty to pay fortunately.
I'm obligated for 4 months rent so I'd have a gap between exchange and completion.
I wouldnt open at £95 on a £98k flat. I'd stick in an offer at £90k. Remember the agent isnt your friend no matter how chummy he may act, think of him as the sellers "inside spy" to your mind, don't open up and don't tell him that you could maybe increase the offer if the seller doesn't like it. Each time you make an offer the agent has to believe that a higher offer isn't going to be forthcoming. From the looks of things a few of your problems will be solved if you make the offer £5k less then you're intending.
Best thing with the damp is have a think about what's behind it or near it. Is it in the corners and related to condensation - drying clothes inside or lack of ventilation. Is it near a roof component or window that might have failed? A chimney breast which was capped.. A dripping overflow .. If it's a ground floor flat, is it because the ground is higher than the floor or dpc if it has one..
At least a surveyor will provide independent, insured advice, and you'll be able to get a true opinion as to the severity of any issues over the phone, if perhaps not in writing. A sneaky builder (or damp proofing 'specialist') might use it as the opportunity to quote for more work..
At least a surveyor will provide independent, insured advice, and you'll be able to get a true opinion as to the severity of any issues over the phone, if perhaps not in writing. A sneaky builder (or damp proofing 'specialist') might use it as the opportunity to quote for more work..
HotJambalaya said:
I wouldnt open at £95 on a £98k flat. I'd stick in an offer at £90k. Remember the agent isnt your friend no matter how chummy he may act, think of him as the sellers "inside spy" to your mind, don't open up and don't tell him that you could maybe increase the offer if the seller doesn't like it. Each time you make an offer the agent has to believe that a higher offer isn't going to be forthcoming. From the looks of things a few of your problems will be solved if you make the offer £5k less then you're intending.
Cheers.They rang a few minutes ago. As I'd said during the viewing, I again said the price is very optimistic - it's only been on the market 2 weeks and dropped from £105 to £98K, presumably because of no interest - but maintained I was interested, just not at what they're looking for.
I've dealt with many estate agents through renting for years, so no problem in being a bit cold with them.
They've gone away to get the detail on the service charges which I don't have the detail on. Can't imagine they'd be much. No shared access, no communal areas etc.
It's a rare find to get a place with 999 years on a leasehold remaining and peanuts for ground rent. I really don't want a new build too!
thenortherner said:
Thanks for the replies.
I'll give the builder a miss for now, and it sounds like a full survey rather than a home buyer's report is the way to go if I want something detailed.
Ref. the land charges, my fault, I meant £200 and not £2k!
I've been using the guides and forums on MSE and found them very helpful. Although some on the forum reckon what I've budgeted for costs isn't enough and £5K is a better figure to be working with, and that I should hold out till I've got this. If the flat's gone then it's gone etc..
It wholly depends.I'll give the builder a miss for now, and it sounds like a full survey rather than a home buyer's report is the way to go if I want something detailed.
Ref. the land charges, my fault, I meant £200 and not £2k!
I've been using the guides and forums on MSE and found them very helpful. Although some on the forum reckon what I've budgeted for costs isn't enough and £5K is a better figure to be working with, and that I should hold out till I've got this. If the flat's gone then it's gone etc..
I bought a new build last year. The developer paid for the stamp duty which saved costs. Not including the 5% house deposit, my fee's for solicitors, mortgages fee's, land search etc. et.c were around £1k exactly.
thenortherner said:
Cheers.
They rang a few minutes ago. As I'd said during the viewing, I again said the price is very optimistic - it's only been on the market 2 weeks and dropped from £105 to £98K, presumably because of no interest - but maintained I was interested, just not at what they're looking for.
They'll try using a line like, "look its been dropped £7k already!" to which I usually reply something like "well if you'd stuck it on at £200k you could be telling me that you dropped the price over £100k couldnt you?! sticking it on at a silly price to start doesn't mean its well priced now!"They rang a few minutes ago. As I'd said during the viewing, I again said the price is very optimistic - it's only been on the market 2 weeks and dropped from £105 to £98K, presumably because of no interest - but maintained I was interested, just not at what they're looking for.
usually gets the point across.
Also a 2 week price drop could suggest the seller is keen and might have something else hes trying to buy, cheeky low offer could do well on this one I think.
HotJambalaya said:
thenortherner said:
Cheers.
They rang a few minutes ago. As I'd said during the viewing, I again said the price is very optimistic - it's only been on the market 2 weeks and dropped from £105 to £98K, presumably because of no interest - but maintained I was interested, just not at what they're looking for.
They'll try using a line like, "look its been dropped £7k already!" to which I usually reply something like "well if you'd stuck it on at £200k you could be telling me that you dropped the price over £100k couldnt you?! sticking it on at a silly price to start doesn't mean its well priced now!"They rang a few minutes ago. As I'd said during the viewing, I again said the price is very optimistic - it's only been on the market 2 weeks and dropped from £105 to £98K, presumably because of no interest - but maintained I was interested, just not at what they're looking for.
usually gets the point across.
Also a 2 week price drop could suggest the seller is keen and might have something else hes trying to buy, cheeky low offer could do well on this one I think.
thenortherner said:
Cheers.
The flat's £98K so no stamp duty to pay fortunately.
I'm obligated for 4 months rent so I'd have a gap between exchange and completion.
Which means you're in no rush to make an offer that's higher than you want to pay, and if they've had to drop the price already I'd be quite happy to stick in a lower offer than £95k. It doesn't sound like they're beating off other offers with a stick, and you can always up your offer to £95k later.The flat's £98K so no stamp duty to pay fortunately.
I'm obligated for 4 months rent so I'd have a gap between exchange and completion.
Like other posters have said, going in at circa £90k is a good starting point.
blearyeyedboy said:
thenortherner said:
Cheers.
The flat's £98K so no stamp duty to pay fortunately.
I'm obligated for 4 months rent so I'd have a gap between exchange and completion.
Which means you're in no rush to make an offer that's higher than you want to pay, and if they've had to drop the price already I'd be quite happy to stick in a lower offer than £95k. It doesn't sound like they're beating off other offers with a stick, and you can always up your offer to £95k later.The flat's £98K so no stamp duty to pay fortunately.
I'm obligated for 4 months rent so I'd have a gap between exchange and completion.
Like other posters have said, going in at circa £90k is a good starting point.
Offered £90K. Ten mins later the EA rang back and said he's looking for more. I was resolute in that being all I had and stood firm. They caved a bit when I asked what he was expecting (£92.5K). Offered £91K and said that's all I can do and I'd have no choice but to lose it if he won't accept that.
Asked a load of questions on the outstanding issue of service charge cost, who's responsible for what in terms of the leasehold, any major bills expected / what major work has been done etc.
If the property is leasehold then surely it is the freeholder's responsibility to sort out the damp? Be under no illusions though that at least some of the cost will come back to you!
Are there any large bills looming regarding the building fabric? New windows? New roof? Repointing?.
Service charges (+ Vat) can be goldmine for the less scrupulous.
Are there any large bills looming regarding the building fabric? New windows? New roof? Repointing?.
Service charges (+ Vat) can be goldmine for the less scrupulous.
Dogwatch said:
If the property is leasehold then surely it is the freeholder's responsibility to sort out the damp? Be under no illusions though that at least some of the cost will come back to you!
Are there any large bills looming regarding the building fabric? New windows? New roof? Repointing?.
Service charges (+ Vat) can be goldmine for the less scrupulous.
After a bit of negotiation an offer of £91K has been accepted.Are there any large bills looming regarding the building fabric? New windows? New roof? Repointing?.
Service charges (+ Vat) can be goldmine for the less scrupulous.
The roof at the back of the property where it has been extended to accommodate a bedroom was redone 3 years ago (I'll be asking for proof). New windows were fitted throughout last year, as was a new boiler.
The set up is a bit of a weird one. It's an end terrace with a chemist next door. The chemist is also the freeholder and also owns the space/flat above the one I made the offer on.
The current owner has lived there 10 years and has apparently not paid a thing to the chemist/freeholder and believes the only thing they are responsible for is the roof on the property extension over the bedroom. There are no communal areas or communal entrances.
It all depends on what it's deemed I'd be responsible for and what the freeholder is responsible for. Clearly something I need in writing.
I think this is for the solicitor to iron this one out, as you say, I don't want the sudden introduction of an unreasonable service charge.
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