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| When the offer has been accepted |
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| When the offer has been accepted
When your offer for the property has been accepted you will have to consider the following:-
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Whether a holding deposit is payable
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Arranging a mortgage
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whether a survey is necessary
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Who will do the necessary legal work
Holding Deposits
Once the owners have accepted your offer the buyer may be asked to pay a small deposit to the estate agent. This is usually between £500 and £1000 pound. It is meant to show that you are serious about going ahead with the purchase. It is repayable if the sale does not go ahead.
Arranging a Mortgage
If you have not already begun to arrange a mortgage, you should start to do this now. It should take about three weeks from the application for the mortgage to the formal offer being made by the lender. However, this time-scale may vary.
Whoever agrees to lend the money will want to have the property valued. This is to make sure that the lender could get the loan back if for any reason you stopped paying your mortgage and the house had to be sold again. The valuation will be done by a surveyor on behalf of the lender but you will have to pay for this valuation. The fee will be payable in advance, usually when you send a completed mortgage application form to the lender.
If the amount of money to be borrowed is more than a certain percentage of the valuation of the property (usually 75-80%), your lender may make it a condition of the loan that you take out extra insurance to cover the extra amount. You pay a single premium to your lender which is usually added to the loan. This is known as a higher lending charge (or mortgage indemnity guarantee).
Arranging a Survey
The valuation which is done for whoever is lending the money is not a survey. You should consider whether or not to have an independent survey carried out in addition to the valuation. The survey would not only consider the value of the property but would also examine the structure of the property and should identify any existing or potential problems.
There are two levels of survey that you can choose between:-
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A full structural survey. This is suitable for a property which is large, more than 80/90 years old or in doubtful condition
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An intermediate or "house/flat buyers report" that gives a report on the condition of the parts of the house that are easy to see and to get at and may recommend further tests or investigations, for example, a specialist check for woodworm. This is particularly suitable for properties built this century which appear reasonably sound. It is much cheaper than a full structural survey.
It is possible for you to use the same surveyor who does the valuation to carry out the survey and this may be cheaper. However, you can use a different surveyor if you wish.
If the surveyor reports that there are some problems with the property, you will have to consider whether you still want to go ahead with the purchase or want to negotiate further with the seller about the price. The surveyor will usually advise you as to how any problems they have identified should be dealt with and the likely costs of this.
Choosing who is to do the Legal Work
The legal process of transferring the ownership of the property from the present owner to the buyer is known as conveyancing. You should decide who you want to do the conveyancing work. You can do it yourself, although this can be complicated, or you can:-
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Use a solicitor; or
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Use a licensed conveyancer
Using a Solicitor
Most firms of solicitors offer a conveyancing service. Although all solicitors can legally do conveyancing, it is advisable to choose a solicitor who has experience of this work.
Using a licensed conveyancer (England and Wales only)
You can use a licensed conveyancer to do your conveyancing. Licensed conveyancers are not solicitors but are licensed by the Council for Licensed Conveyancers.
Finding out how much it will cost
Before making a choice as to who will do the conveyancing, you should be advised to find out the probable costs of the conveyancing. It is important to contact more than one solicitor or licensed conveyancer as there is no set scale of fees for conveyancing. You should:-
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Check whether the figure quoted is a fixed fee or depends on how much work is involved
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Check that the figure includes stamp duty, search fees, land registration fees, expenses and VAT and get a breakdown of these costs
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Find out what charges, if any, will be made if the sale falls through before contracts are exchanged.
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