Home Buying and Selling Pitfalls
What can I do to keep my property chain together? Find an alternative to the property chain Make a contractual agreement with the buyer Choose the right estate agent Forward Planning The most common buyer pitfalls The most common seller pitfallsI once read that the three most stressful things that can happen to you during your lifetime is suffer a bereavement in the family, go through a divorce, and move house.
Please take note that they are not necessarily in order! And it’s not only your moving problems you have to deal with, if you are involved in a property chain (a number of buyers and sellers associated with the buying and selling of each others property), any one of the links in the property chain could break causing all deals to be off.
A rough estimate of the number of how many house purchases fall through at the final hurdle puts it as high as one in three. Even though buyers may offer more money to keep the deal alive, and sellers may accept less money for their property for the same reason, property chains still break, and add to this the stress involved with surveys, searches and most of all, dealing with solicitors, and you can well understand people calling it a day and staying where they are.
| What can I do to keep my property together? | Top |
Be Prepared
Like a good boy scout, ‘be prepared’, make sure all the paperwork is completed before you start to exchange contracts, make sure you have a mortgage offer and have sorted out a solicitor before you put in an offer for a property.
Make sure your prospective buyer is serious
Now, I like a good laugh, but what I don’t need is a comedian when it comes to making an offer on my home. Make sure your prospective buyer has a mortgage sorted out, and that they have a solicitor, this shows commitment and a serious attitude towards buying.
Taking out a temporary loan
A temporary loan (sometimes known as a bridging loan) may hold the solution to your problem if you are caught in the gap between selling your home and buying another. Be careful though, as a bridging loan is secured by getting a mortgage on the property you are buying, and taking out a second mortgage on the property you are selling, so make very sure that the deal will go through within six months of taking out the bridging loan as keeping a bridging loan longer than this is in most cases not financially viable.
| Find an alternative to the property chain | Top |
Now, I know that not all of us are in a position to pick and choose our prospective purchasers, but those that can, need to ask their prospective buyer whether or not they are involved in a property chain, they could be first time buyers or are looking for a property to rent out. It may be worth accepting a reduced offer from these types of purchasers to avoid the pitfalls of a property chain. If you are a seller and are offered a good deal from a first time buyer or someone wanting to buy to let, then you may consider renting a property on a short term let whilst waiting for your ideal home to come on the market.
| Make a contractual agreement with the buyer | Top |
If you really make sure that your sale will go through, how about arranging a separate legal agreement with the buyer as part of the buying process. The legal contract between the buyer and the seller usually states that neither party can withdraw from the sale if contracts are exchanged within a certain period of time. Of course, setting up this type of legal agreement will cost money in the form of extra legal fees. However, if you feel that the extra security that a legal contract gives you, allows you to sleep better at night, then you may consider the cost justified.
| Choose the right estate agent | Top |
Much of the time spent in buying and selling a property is spent running around chasing solicitors and checking out offers from various potential buyers up and down the property chain. This is where a reputable estate agent can save you a lot of time (and aggravation). Estate agents are used to dealing with the various types of crisis that inevitably crop up during the sale, and they can make the difference between the property chain breaking or staying together.
| Forward Planning | Top |
Forward planning is the answer to avoiding the pitfalls and paving a smooth pathway to success, says the Royal Institution of Chartered Surveyors.
The institution has produced a series of consumer guides aimed at explaining how the buying and selling process works and how to avoid surprises.
Those people who will start house-hunting in earnest, and those whose houses have been on the market since the New Year, but received little interest, might do themselves a favour by looking at the “Royal Institution of Chartered Surveyors” advice.
Each of the three guides has been specifically designed to address the questions most frequently asked by the public. They are entitled:
- Buying your home
- Selling your home
- Understanding property surveys
RICS spokesman, Jeremy Leaf, said, "Knowledge is power. Many people involved in the 1.45 million house sales which take place in the UK every year are overwhelmed by the process of buying or selling a home. Whilst we cannot remove the stress involved in moving house, we can provide clear, easy to understand advice."
| The most common buyer pitfalls | Top |
- Failing to get an ‘in principle’ mortgage offer from a lender and finding out the true value of your present home before starting your search
- Going for a property beyond your price limit
- Being undecided about exactly what you want from your new home - number of bedrooms, size of rooms - and most importantly the preferred location
- Not thoroughly researching the area of the property for sale – the local amenities, neighbourhood
- Mistakenly relying on the mortgage valuation as a record of the condition of the property and deciding to cut corners and not pay for a professional survey of the property undertaken by a chartered surveyor.
- Failing to find a good solicitor to act quickly on your behalf when you find your dream property.
| The most common seller pitfalls | Top |
- Failing to pull together all official documents – title deeds, land registration documents before putting your property on the market– a house with a boundary dispute will not sell
- Avoiding doing the obvious things like keeping the house and garden tidy and keeping the pets at bay
- Making it difficult for people to view your property at the most convenient times to them – e.g. weekends and evenings.
- Being unclear about what is part of the sale and what is not included – this just irritates the potential buyer
- Forgetting that whatever price the property is sold for – you will need to deduct stamp duty, solicitor and estate agency fees.
