FISCUS MORTGAGES - INFORMATION AND ADVICE

Making a successful Offer, Exchanging Contracts and Completion

House hunting will hopefully lead you to your ideal house. At this stage, you will need to make an offer. Once the offer is made, there will be certain aspects of the deal that need resolution (including the exchanging of contracts) before the house purchase can be completed.

MAKING AN OFFER

The process of making an offer is relatively straightforward. You contact the estate agent that is offering the property, and till him how much your offer is. The decision on how much to offer, however, is a little more complex. There are numerous factors to consider, not only regarding the value of the property, but taking into account your available finances.

The advertised price of the house (known as the “asking price”) is obviously not set in stone and is negotiable. The first thing you need to do is find out a reasonable price for that type of house, in that area. Look around at other properties in the area (you would have done this while house hunting anyway) to gauge a realistic price of the property in question. This is your starting point.

You then need to consider if there will be much work required to the house. This could vary from a few minor changes through to a full renovation. You should attempt to value the costs of all work that needs to be done to the site. This figure will need to be offset against the value of the realistic price you have already calculated for similar properties in the area.

If you are planning on renovating a run-down building, you should take a look at green mortgages. Lenders such as The Ecology consider renovation a form of recycling, so offer tailored mortgages for such circumstances.

Once the two aforementioned elements to your bid have been calculated, you should have a pretty accurate figure for your bid. It is always worth speaking to any friends and family you may have in the area or other individuals with a good knowledge of the housing market, as a final check to ensure you are paying a reasonable price.

Importantly, whatever figure you decide upon, you must be comfortable with it. We’ve said this numerous times, but remember that you should try not to over-extend yourself financially, as you’re only asking for trouble in the longer-term.

AN ACCEPTED OFFER

If you make an offer that has been accepted, you have to get through all the legal and financial paperwork before the property is yours. After a successful property bid, you will want to begin by finalising your mortgage. If you have not yet worked out which mortgage is best for you, you should contact an Independent Financial Adviser (IFA) to help search for the best type of mortgage for your particular needs. Complete our mortgage enquiry form and we will have an IFA contact you within 24 hours.

Once you have worked out which home loan is best for you, you’ll need to produce all the relevant documentation and requirements of the mortgage provider, such as bank statements, recent payslips (and details of your employer), the details of your referees and, of course, the funds for the mortgage deposit. You should also ensure that you arrange a property insurance policy (not contents insurance at this point) on your new home before you exchange contracts.

EXCHANGING CONTRACTS

Once the mortgage has been finalised, you will need to exchange contracts. The actual process of exchanging contracts is quite technical, complex and can take a bit of time. It is at this point that you will need to be represented by a solicitor or conveyancer.

Once you have gained adequate representation, they should begin by going over the deeds of the property in question. Alongside this analysis of the mortgage deed, they will check with the local council regarding any planning permission issues and speak to the seller’s legal representation to ensure everything is in order before the purchase is completed.

If this is all in order, your solicitor will ask you to pay the seller’s legal representative the property deposit, likely to be between 5% and 10% of the agreed price. The legal fees will vary depending on the solicitor you choose and the value of the property, but they are around 0.5% - 1% of the purchase price.

COMPLETION

The completion date is the day that you finally get the property. At completion, your solicitor will pay the seller the balance owed on the property (value minus deposit paid) and in return receive the Title Deeds from the seller’s legal representation. The transfer of ownership then needs to be legally endorsed by the parties involved and the Land Registry must be notified of the change in ownership.

The date for completion (when you finally buy the property) is normally set at the time of exchanging contracts. It is possible to exchange and complete on the same day. Normally however, it is a few weeks apart - time for your solicitor to:

Arrange the signing of the transfer documents.
Ensure the mortgage monies are available on the completion date.
Pay the Stamp Duty and Land Registry fees.
Finalise any other legal arrangements.

By now you probably feel like having a holiday, but don’t. Between exchanging contracts and completion you need to be available at any time to sign documents or answer solicitor’s questions. Also you need to:

Arrange the pick up time and place of the property’s keys.
Obtain quotes from removal firms or start persuading your friends.
Advise relevant organistions of your change of address.
With the sellers permission measure up for curtains and carpets. If not part of the sale you may wish to negotiate to buy them.
Arrange for animals to be looked after on the day of the move.
Advise utility companies (gas, water, phone etc) of the date that you will be moving in.
Arrange a day off work to move in.