how to make an offer on/buy a property

[Gerrard]

I was in a similar situation to you 3 months ago, and tonight will be my first night in my new property. However, my situation was one of the more straight-forward ways (new build that was almost complete, FTB, normal mortgage), which is why it was quick. It was also fairly easy for me as I am single and only moving 15 minutes down the road; so I'm using my own car rather than hiring a van. However, new builds have their own problems. For example, I had trouble getting insurance quotes since the address didn't exist (they asked for GPS co-ordinates). I also made a slight blunder in that I thought I could get Infinity (I tried the number above mine, and it was available). Turns out they had FTTP, which may have been something that was asked for during the build phase. Doesn't look like the cabinet is FTTC somehow, which is a bit confusing. So I've downgraded from 60Mbs to 2.5Mbs. I need to track down an Openreach guy on the estate at some point to try and clarify that. Seriously, this has been my biggest stress so far!

The way I started is what has been suggested here, looking at the guides on Money Saving Expert. Going by memory, here is the jist of it (I'm sure people will correct me if wrong)

1. Get an idea of your budget. Use “How much can I borrow?” calculators to give you a very rough idea of the maximum that you could borrow (chances are it will be lower). Also look into schemes (shared ownership, Help-to-Buy) if eligible. In addition to this you need to take into account the following fees: -
a. Stamp Duty (depends on property price, £1000-£10000)
b. Solicitor's fees(£500-£1500)
c. Land Registry fee (up to £500, also dependant on property price)
d. Seller's Solicitor's fees (£200) (might be new build only)
e. Mortgage Booking Fee (£100-£200 – Non refundable)
f. Mortgage Arrangement (£0-£2500, sometimes added to the mortgage)
g. Valuation (£300-£400)
h. Surveys (£400-£700)
i. Broker Fee if used (£0-£500)
j. Total around £5000-£6000 on average
k. There's also life/injury protection insurance on top of the mortgage repayments. (around £50 per month)
2. Using the above information, have a look around on Rightmove or estate agents to get an idea of the type and price of property you want.
3. Use that information to get a Decision in Principle for a mortgage. This is bit more in depth than step 1, but can still be done over the phone. I used a broker London & Country for this as recommended by Money Saving Expert and was free at this point.
4. You can also start getting quotes for solicitors around the same time. As mentioned, expect to be recommended some by the estate agent; there's no harm in looking and researching them as well. Again, research MSE forums; there are cheap online only ones that might be worth avioding.
5. Now you can start getting serious, viewing properties and making offers. For mine, I was only able to get 5% off the asking price plus another 3% in incentives (stamp duty, flooring+fixtures; this can affect your valuation though).
6. If the offer is accepted, you can now start the ball rolling with valuations, surveys and the mortgage process. With the valuation, you may find the property is valued below what you offered which can affect your Loan-to-Value (LTV) and possibly the mortgage you can get. You can increase your deposit to bring the LTV back.
7. As mentioned, expect to be interviewed by the mortgage broker/lender to calculate all your outgoings and affordability. At this point, I had swapped brokers to Mortgages First that were recommended by the builders and didn't seem all that bad. They were free and since it was a new build, I was against the clock for Exchange (1 month). I also knew which mortgage I wanted (thanks to L&C), so specified that to them. However, when the representative arrived, she had been misinformed at the mortgage I was going for (instead looking at one that I hadn't even discussed on the phone prior), so wasn't as good as it could have been. The amount I could borrow was lowered after this due to my Student Loan repayments (yes, they matter for once) and the fact that I am lease hiring my car, so I had to increase my deposit to cover the difference (I had planned conservatively anyway, so wasn't too bad). Obviously, this is something else to plan for.
8. At this point, either party can back out/mess around until the Exchange of Contracts.
9. When the Exchange is made, you have to pay your deposit (or at least part of it in my case) and now both sides are legally locked in, so neither can mess around too much (although still possible but at much more cost). Sometimes, you need to have buildings insurance in place at Exchange (probably new build only again); you definitely need it by Completion.
10. The final stage is completion; when you become the legal owner and get the keys (or in my case, the day after as I was away with work!). Your solicitor will basically give you a final figure you need pay by this point.

[csgohan4]

MSE forums were the most informed I found and I got alot of my information from them, including how to get the best mortgage deals, generally from brokers.

On a seperate note, does anyone recommend any life insurance/ Home insurance companies or share how they found the best deal for them? I plan to buy a house end of next year

[ik9000]

so we put an offer in on one and the estate agent refused to forward it without more details. can they do that?
They demanded to know amount of deposit, who our AIP was with etc. I can't see why it's their business to know this. Our offer is X and we have the AIP to show we can get there. So what's the issue? All the vendor needs to know is that we have made an offer of X

[jim]

so we put an offer in on one and the estate agent refused to forward it without more details. can they do that?
They demanded to know amount of deposit, who our AIP was with etc. I can't see why it's their business to know this. Our offer is X and we have the AIP to show we can get there. So what's the issue? All the vendor needs to know is that we have made an offer of X

I would imagine that part of their remit is to filter out offers that the buyer can't actually follow up on. Personally, I would expect to show them the letter from the broker / bank as it shows I'm not mucking them about.

Obviously though, if the estate agent is giving you loads of grief about a genuine offer and won't pass it through, I'd consider going directly to the vendor and telling them.

[finlay666]

...

This is pretty much what I'm looking at at the minute with the difference for consideration:

a. Stamp Duty (depends on property price, £1000-£10000)

Usually 1% over £100k I believe

d. Seller's Solicitor's fees (£200) (might be new build only)

Sometimes there is some payment towards this in the mortgage application, varies by place

f. Mortgage Arrangement (£0-£2500, sometimes added to the mortgage)

Entirely dependent on the mortgage, some also do cashback after

g. Valuation (£300-£400)

Can be included in the mortgage as a 'hidden extra'

h. Surveys (£400-£700)

Newer builds should have a certificate (HBC?) that says it was built to a good standard, only really need one for older houses from what I know of as older ones can list several things that aren't faults per se but can affect the valuation after

4. You can also start getting quotes for solicitors around the same time. As mentioned, expect to be recommended some by the estate agent; there's no harm in looking and researching them as well. Again, research MSE forums; there are cheap online only ones that might be worth avioding.

Also try to get some referrals for this, a slow solicitor can be a royal PITA trying to get things sorted

5. Now you can start getting serious, viewing properties and making offers. For mine, I was only able to get 5% off the asking price plus another 3% in incentives (stamp duty, flooring+fixtures; this can affect your valuation though).

You can be very cheeky if you have no onwards chain, 10% off + some integrated appliances replaced in the kitchen

[Gerrard]

The mortgage I went with did include a valuation which helped save some money. And as it was a new build, it is covered by NHBC for 10 years (I think, some stuff stops after 2 years).

So far I have found lots of little annoying things with a new build. For a start, I'm useless at DIY and don't have many tools, so putting things up like towel rails/toilet roll holder are just things I've taken for granted. There's also no TV aerial, so have to sort that out at some point. And since the place had already been built by the time I came along, I didn't get much say in the design of the bathroom/kitchen; there's plenty I could do to get some more storage.

However, the biggest PITA, and is to be expected, is having to phone everyone up to get a change of address as it's not on their automated systems yet. The builders said they had registered with Royal Mail, but after a week of not being able to set-up a redirection, I registered it myself in the end. The TV licencing were very quick to pick up on the new address though!

I did get a good view of this happening this morning though: -

Didcot power station towers demolished

[finlay666]

Ah NHBC is 10 years, probably worth looking at having a proper look when we do the viewing when the tenants get kicked out to see if there is any potential issues and then get a friend of a friend to do us a survey on a friends rate

[csgohan4]

so we put an offer in on one and the estate agent refused to forward it without more details. can they do that?
They demanded to know amount of deposit, who our AIP was with etc. I can't see why it's their business to know this. Our offer is X and we have the AIP to show we can get there. So what's the issue? All the vendor needs to know is that we have made an offer of X

Perhaps they are playing hard to get and wanting you to up your offer, did you offer the offer price or below it?