Are You Buying Property? (Get a Quotation)
Buying a property is one of the most important decisions both financially and personally that a person is likely to make. In order to avoid unnecessary delays and stress the purchaser of property should attend to the following:
- For some reason we tend to negotiate the purchase of property without having first investigated whether we can afford to buy the property. A purchaser of property should first ascertain from their financial institution whether they are agreeable to advancing the necessary funds. Contact with your financial institution can be made even before you have identified a property. This will enable you to direct your search for property within your budget.
- Once the property has been identified you should contact your solicitor for preliminary advice and an estimate of costs and outlay likely to arise (for example stamp duty, registration fees, legal fees , VAT etc). Once you have an estimate for the transaction you should proceed to contact your financial institution to process your mortgage application. Prior to contracts for sale being exchanged it is important that a purchaser is in possession of a Letter of Loan Offer from their lending institution confirming that they are advancing funds and setting out the conditions of the loan.
- If you are purchasing a second-hand property it is important that you arrange for a qualified surveyor/ architect/ engineer to carry out a structural survey of the subject property. Your financial institution will also carry out a survey/valuation of the property for their own benefit but this is not a structural survey and you can not rely upon the report furnished to them. It is strongly recommended that a structural survey be carried out in relation to the purchase of second-hand property as a purchaser will have no redress against the vendor of the property for any defect following completion which would have been apparent had a structural survey been carried out. Your solicitor will also recommend that you arrange for your surveyor/architect or engineer to carry out a pre-contract planning search of the area to ensure that there are no developments planned in the area which might adversely affect the property in sale.
- You will be required to pay a deposit on the execution of Contracts for Sale While this is usually 10% of the purchase price if you are obtaining a 100% mortgage you may wish to instruct your solicitor to seek the agreement of the Vendor to accepting a reduction of the deposit required.
- Once the Contracts for Sale have been signed and exchanged you should ensure that you have insurance in place on the premises immediately.
- Your solicitor will have requisitioned your loan cheque and it is a matter for you as the borrower to ensure that all non-legal conditions contained in your letter of loan offer have been complied with. In my experience one of the major causes of delay with obtaining a loan cheque for completion is that the borrowers life insurance remains outstanding.
- If you are purchasing the property with your spouse or co-purchaser you will need to discuss with your solicitor whether the property is being purchased as joint owners or as tenants in common.
- If you are an unmarried cohabitating couple you may wish to discuss with your solicitor the option of signing a co-ownership agreement.