Property Buying - Protocol

[Just having a nose]

We're in the process of buying out first home and our mortgage advisor asked to see proof of funds before applying for our mortgage in principle? Once we made an offer on the property, the estate agent also wanted to see proof of funds.

The property we bought was less that we could have borrowed from the mortgage lender, but the lender wanted a minimum of 10%. For example. if the lender told me I could lend up to £100,000 and I bought a property for £90,000, that does not mean the bank are still going to give me 100k just because of my affordability. They would lend me 90% of £90,000 which is 81k and I would still need to put 9k of my own money down.

 

[standupsitdown]

Thanks. I'm getting the picture of how to deal with vendors now. I'll lay the full facts on the line with them. Do you think I should tell them the amount of my agreement in principle? If the agreement is 129 and their property is on at 90, that would show my affordability? Or would they wonder why I am buying so cheap when I could get somewhere more expensive? I've realised I need to act like your average buyer and not the crazy chick I am. I'll ask questions about the boiler etc and then fingers crossed they will take me seriously. (Still cuts through me having to kiss ass to buy a product but hey ho). I've learnt a lot more than I was hoping to from this thread, thanks all.

You’re not kissing ass you’re asking the sellers to put all their faith, trust, hopes and dreams and time in you, so you just have to play the game. This isn’t like buying a pair of shoes, this is peoples lives

The agent won’t discuss the boiler and things like that with you. That’s for you to suss out when you view That’s why viewings are important, you can get an idea of how well the property has been maintained and cared for. If it’s got plants growing out of the guttering that would suggest it may have been neglected.

Your solicitor will ask for proof that it’s been serviced. I’m not even sure if the surveyor will comment on the boiler, I’ve only ever had minimal structural surveys.

 

[Gloria Rostron]

I don’t mean to sound nasty but I’m beginning to see why the Estate Agents haven’t replied to your emails. Are you saying you’ll pay above the asking price for a house (because you’ve got an AIP)? That is not something anyone involved in buying or selling properties will hear very often so they probably aren’t taking you seriously. If you don’t have to move out of your current place straight away then I don’t understand the rush, unless it’s your ultimate property that you feel is the right one for you but I can’t see how you’d know that without viewings

It's because I am worried about someone else offering above the asking price and beating me to the post. It's a long story with my current property, basically I'm 26, lived here all my life with my mother and my siblings, mother died 5 years ago, we ended up with the house, my siblings been talking about moving for years but I only agreed about a year ago, my brother now has a partner and a baby and needs more space , my house is falling apart and uncle has offered to buy it (he's family hence it won't matter if we can't move out for a few months). The thing is my family have no motivation to get stuff done so I just think If we don't get it done now, it will never get done. Nothing ever gets sorted with my family lol.

 

[judgejohndeed]

I'll look out for the STC when I am viewing properties.

You wouldn’t be viewing a property that has a Sold STC sign outside it as it means they’re under offer already. Your neighbours having a sign outside for a long time just indicates what I mentioned - it takes a long time to go through. We’ve had the Sold sign outside since March now and haven’t moved out yet. If you want a quick move then ask your local estate agents if they have any properties that don’t have an onward chain. Also, the only time you need to put an offer in above the asking price is if the advert for the house says ‘OIEO’ (offers in excess of) or the estate agent tells you people are offering over the asking price. Generally, you offer under and then you negotiate a bit, or if you really like it you might offer the asking price. As someone else mentioned in some areas at the moment everything is going above asking price but you’d need to find that out from an estate agent.

 

[standupsitdown]

She does seem to need an attitude readjustment.

MOD EDIT: This thread is now closed, it has clearly run it's course.

 

[Sheabutter]

Thanks all. I do have an Agreement In Principle, I mentioned this to one seller but onl really to bulk out the Email. I'll be sure to mention this in future. I don't think I could bear an auction, getting so close and losing it. I find it anxiety inducing seeing all of these properties I like and knowing that they could slip through my fingers, this is why I want to put offers in straight away. Interesting point about there being nobody in the office, they should say so on their website if this is the case. The buyer is the customer and shouldn't have to go chasing as if applying for a job.

Photos can be heavily edited!! The dimensions can look completely different in person if they use a wide angle lens, which agencies do! Also, a lot of places do up a room with editing tools to show you how it COULD look, not how it does look. By visiting multiple places you can get a feel for what you like vs what you don’t like. One thing you might want to learn is which direction windows are facing. If you like having natural light this is

I also wouldn’t spend money on overbidding bc you might want upgrades when it comes to doing the actual build out. Save as much money as you can while buying the property! The labor will drive up the cost of any work you want done. Example: I had serious contractors give me an estimate of $5,000 to paint ONE room! Shopping around is an imperative

 

[standupsitdown]

Don’t be too focused on being outbid. Bids are pretty much meaningless. What’s more relevant is a buyers position. Vendors would rather go for a lower proceedable offer than a higher pie in the sky bid.

The best thing you can do is get all your figures, house sale and paperwork in order and introduce yourself to the agents as a serious contender who knows what they’re doing and where they’re at. Once you’ve done that actually go in to the various offices so they can put a face to a name and you will spring to mind when they’re looking for buyers.

If you’re seriously in the running they won’t let you get out bid, they will want to get the vendor a sale at best possible price even if that means trying to get you into a bidding war.

A lot of agents won’t really want to engage with you until you at least get your sale well under way and can provide evidence of this, it sounds like there are months to go with your uncle purchasing, solicitor etc, so tell him to get a move on

 

[Giggling Squid]

Also worth considering future proofing. If you’ve got a £60k deposit it might be worth looking for something a little bigger and borrowing more, as in the long run that would probably be cheaper than buying a small place now, then in a few years time needing more space and then having to pay again for financial advice, stamp duty, solicitor fees plus also estate agent fees for selling this place

 

[Giggling Squid]

Might be more now they don’t need £20k for conveyancing fees they didn’t know they needed!

 

[Gloria Rostron]

I cannot believe anything other that this is a troll post. Here’s my suitcase of 90grand thank you and bye.

And this is the reason it is so hard for first time buyers (of any age) to get on the ladder, we don't know the process so we ask to find out and when we do, our ideas are laughed at. I've never done it before so how would I know what's realistic or not?

 

[disneys]

I don't think that's true at all. It's hard because it's expensive, I'm in the South East and house prices are just ridiculous. But in terms of learning about the process, there's loads. That really isn't the hard part. You've already been told various places to look online (Martin Lewis being a key one for anything financial) and there is so much information online. I spoke to friends and family who had gone through buying in the last couple of years, who also recommended solicitors they had used.

Your mortgage advisor should also be talking the process through with you, if they aren't then I'd consider switching to a better one before you get started properly. They should really be doing that before you make any offers at all so you know what your next steps will be and make sure you have all of your relevant paperwork ready in case an offer is accepted.

Agreed - the hard part is getting the money together to be able to afford a place , not because the process is complicated because as I’ve linked to you , there are loads out there

isn’t your uncle in property development ? Why on Earth haven’t you spoken to him about the process of buying a house ? Surely he’s an expert !

If you’re not a troll, I personally don’t think you’re ready yet - you need to take a step back , do some research on tne process using the resources get all your ducks in a row , work out the sale of your property and then start looking to buy somewhere of your own .. make sure you have money available for all the fees etc you will need to pay and that you’re on track with everything first .. you sound a bit naive so I would try and find someone (perhaps your uncle?) who you can go to for advice and guidance during the process and who can talk you through anything you don’t understand or need help with ..

 

[LennyBriscoe]

You're right. I think I'll have to bite my tongue and arse lick. Then when I get the house, leave the estate agency a bad review.

I wouldn’t say you had to arse lick at all tbh especially not to begin with. I’m sensing the sticking point is having to go to a stranger’s home and look around? A short amount of discomfort is much better than buying a property you haven’t seen imo.

Our flat is for sale and I hate viewings! It’s necessary though. And more often than not the person has asked if they can bring a parent/friend along and I have no problem with that as long as everyone wears masks. They’ve arranged it by contacting the Agent and asking them to contact us to make an appointment but I’m sure a lot of people arrange it all themselves.

 

[Just having a nose]

I will have around £60,000 deposit to put towards it, so if I buy a house for £90,000 (which is the price at one I've looked at), I'd probably need to borrow around £50,000 at the most, to allow for conveyancing and other red tape.


The mortgage broker said to me that her words "she's done me an Agreement In Principle with Barclays and is meeting me next week to discuss proof of funds which may or may not change things". She hasn't mentioned a credit check but I think Halifax did a credit check when I applied with them. I go rejected from Halifax as my income was too low. They discount 40% of your income apparently.

I believe most lenders will only lend enough for purchase price however I may be wrong. So if you have 60k deposit, and the house is 90k, they will only lend you 30k. However, it is your choice to not put down all of the 60k. You could put down 40k, borrow 50 from the lender and then use the 20k you have left over to renovate. The more you put the less your repayment will be of course so entirely up to you, like others have suggested a mortgage advisor or financial advisor would be your best bet!

 

[WilmaHun]

Yeah because Tattle is the place to come to learn how to buy a house rather than Martin Lewis' website

Trust me, as someone who actually works in the industry, there's a lot of clueless people out there who have no idea where to look for any kind of financial advice. There genuinely are people out there who wouldn't think to google it and find websites such as the one you've mentioned. I see it daily with FTB

 

[katyazamo]

Seriously, go and view the properties. Not doing so is naive at best, at worst you'll be paying thousands of pounds which could have been avoidable. Even if you have the money to cover the cost of these things, they always end up costing more than you think.

I viewed mine but I was in a hurry to move and wasn't thorough enough. I had to stump up for a new kitchen, flooring, shower unit, full redecoration including all woodwork and a boiler within 2 years of buying it. Turns out the property was cheap and on the market for months for good reason. You need to do your due dilligence.

 

[judgejohndeed]

@Gloria Rostron you've had some great advice here but just commenting again to say I would prepare for longer than 6-8 weeks if you're buying with a chain, we started our process (offers accepted etc) end of Feb/beginning of March and haven't moved yet! It can be really slow going and other people can mess around/be unpredictable so just something to bear in mind.

 

[Tree_]

Probably getting a suitcase filled with 60k off the uncle.

 

[Gloria Rostron]

You are aware that the conveyancing process can take months too? Depending on enquiries/whether the property is registered at HM Land Registry/searches can take a few weeks to come back (you'll need local & drainage searches as a minimum if getting a mortgage).

We tell our clients to expect a minimum of 6-8 weeks for the conveyancing process to complete in order for them to get their keys. I have known some purchases to go on for nearly a year though!

Also, you need to be aware that although an AIP is a good indicator of what you can borrow - it is not a guarantee that the bank will loan you that full amount. Once it goes to full application and more in depth credit checks etc are done, banks can decide to offer you a lot less than the AIP stated.

Oh wow, I didn't even know what a conveyancing process was until I read this thread. 6-8 weeks would be fine with me. I had no idea they did drainage searches. Hoping that I won't be waiting a year.

A lot of the properties I've looked at are way below the amount the bank has offered me, so I have a bit of leeway with the AIP. I've never been over drawn or had any CCJs so fingers crossed it should work in my favour. You've opened my eyes to a lot more than I thought it would entail (even though I knew it wouldn't be easy). Thank you.

 

[Wowitsme]

Obviously I didn't mean literally walk up to them with a wad of cash I meant approach them with an offer to pay in cash rather than it going through the bank.

a cash buyer has the money in their bank account. When getting a mortgage the money is a loan you pay back and the money never enters your bank account. Therefore you will never be a cash buyer.

even as a cash buyer “cash” was never exchanged all it means is there is no mortgage.

 

[Gloria Rostron]

Don’t be too focused on being outbid. Bids are pretty much meaningless. What’s more relevant is a buyers position. Vendors would rather go for a lower proceedable offer than a higher pie in the sky bid.

The best thing you can do is get all your figures, house sale and paperwork in order and introduce yourself to the agents as a serious contender who knows what they’re doing and where they’re at. If you’re seriously in the running they won’t let you get out bid, they will want to get the vendor a sale at best possible price even if that means trying to get you into a bidding war.

A lot of agents won’t really want to engage with you until you at least get your sale well under way and can provide evidence of this, it sounds like there are months to go with your uncle purchasing, solicitor etc, so tell him to get a move on

Thanks. I'm getting the picture of how to deal with vendors now. I'll lay the full facts on the line with them. Do you think I should tell them the amount of my agreement in principle? If the agreement is 129 and their property is on at 90, that would show my affordability? Or would they wonder why I am buying so cheap when I could get somewhere more expensive? I've realised I need to act like your average buyer and not the crazy chick I am. I'll ask questions about the boiler etc and then fingers crossed they will take me seriously. (Still cuts through me having to kiss ass to buy a product but hey ho). I've learnt a lot more than I was hoping to from this thread, thanks all.