Online Calculators since 2009
Finding a property is a tough job, and it requires a lot of time, effort and patience. You are investing thousands of pounds, and you want to be sure that you are making the correct decision. In this mortgage guide we explore the world of property searching so that can help you avoid the mistakes made by other home buyers in the past and find your perfect property.
In the olden days, homebuyers had to be solely dependent on brokers for finding new properties and understanding the rates in a particular location. However, today you have several property websites like Zoopla, Rightmove, and others that can provide you with interesting leads. Property websites provide a detailed description of available properties, including their locations, their prices, the floor plans, and images. Note that the prices listed on property websites are usually on the higher side and are subject to negotiation. Nevertheless, you can get a good idea of the prevailing rates in a particular location, and what you can get at a particular price.
While property websites are a good option, you should also talk to local real estate agents. Not all properties are sold online and some that are online have already been sold but not removed from the website. The good old local traditional estate agent can give you a lot more options, will have good insight into local areas and most likley be able to recommend a local Mortgage Broker or Independent Financial Advisor. You should set your expectations in advance and give the estate agents an indication of your budget. Based on your input, the estate agent can give you an idea of whether you need to increase your budget, and how long will it take to find your desired property.
If you are a serious homebuyer, you should make sure the broker is aware of your intentions. Brokers deal with too many people, and many of them are not serious homebuyers. If the broker is assured that you are a genuine buyer, he will put in more effort and keep you regularly updated of any new properties coming up for sale.
Did you know that the property seller can set any price on their property? Consequently the price may not always be in sync with the general rates in the market. To get the best deals, you should check for the selling prices of recent deals in a particular locality. Previously, you would need to get this information through a estate agent or some references in your network. The interent has transformed this process and made property prices much more transparent, you can get up-to-date sales price information and histroical information on most of the property websites. In fact, you can even check the original property listings to get an idea of the actual condition of the similar properties to gauge the real value.
Just like stock and other assets, no one can guarantee how property markets are going to behave in the future. Property prices are influenced by several factors like interest rates, general economic conditions, etc. If you are a genuine buyer who wants to buy a property for the long term, you shouldn't worry too much about the fluctuations in the property market but if you are an investor you must review those factors carefully.
While the house may look very attractive, it is important to do a thorough research on the location. Specifically you should check the crime scene in a particular area through police websites. You can also check the performance of schools and distance to specific facilities and amenities. If you choose the wrong location, you may regret the decision for a long time. A house may not look attractive, but if the location is good, you can always invest some additional money and make the house look better and more your own. You should also check the commute from the locality to your workplace and commonly-visited locations during, always do a run in rush hour. The differences in commuting in peak rush hour now can be considerable. Also consider any rail links, bus routes or tram links etc.
If any area is prone to floods, it can have many negative effects. For example, you will have to pay a higher insurance premium or your property prices may not increase as much as the general market. In the worst case, if there's a flood, you will have to deal with damages, which can cost a lot of money and result in emotional strain. You can get detailed information on the flood risk of any area from the Environmental Agency's website.
You should always check for any upcoming changes in a particular locality. For example, you may see a garden from your house, but you will not know that a planned, upcoming building will take away your view. Similarly, you should check if there are any major changes planned in a particular area that may improve the area or make it worse. You can find some of this information on the government's planning portal.
There are several apps that provide real-time information on properties up for sale in a particular area. For example, Rightmove has both Android and iPhone apps that show property listings around any area of your choice. You have to choose 'your current location' and the app will show all for-sale properties near the location. You can even set alerts for any preferred areas. If any properties become available in those areas, you will get immediate notification.
You should not hesitate to ask the correct questions to the sellers/estate agents before making an offer for a property.
We have listed below some broad guidelines of questions you need to ask before an offer:
When you are looking at multiple properties, it can be very confusing to decide which one is the best. It is advisable to take pictures while viewing different properties. When you are reviewing all the possible options, pictures can help you in the shortlisting process.
You should check the property both during daytime and night. During the daytime, you can spot any structural problems easily. And during the night you can detect other issues, such as loud music being played by neighbours or how are the streets at the time of closing of pubs in the nearby areas.
A survey can give you a lot of information about the state of the property, but a survey costs money. As a first step, you should not waste money on a survey if you are not fully sure of pursuing a particular property. You should check the property yourself a few times, or with any experienced friends and family members.
You should spend minimum 20 to 30 minutes at every property and check the points listed below.
You should beware of common cover up techniques followed by sellers. For example, sellers may apply a fresh coat of paint over damp, or they may hide wall cracks behind furniture.
Note these checks should mainly focus on finding any structural issues that could cost a lot to repair. Similarly, the checks should highlight any major issues that can have a big impact on the quality of life. If the property is good, you can address repairable issues by negotiating on the price. You should avoid fussing about minor issues as no property is perfect.
Before buying you should confirm who owns the garden or parking area. If there's any ambiguity, it's best to get written confirmation from the seller.
You should always chat with the neighbours of the seller as they can provide valuable inputs about the property and the location. For example, you can check for any structural problems, such as leakages, in neighbour's homes. It won't be too long before you start facing similar problems. The neighbours can also provide valuable feedback on the locality.
There are several interesting web tools that help you track if any sellers have dropped their prices on property portals. For example, there are Chrome and Firefox extensions that show if any seller on Rightmove has modified their property listing, including reducing their prices. Sellers may drop prices either because of low demand or because they are in an urgent need of cash. You should check such properties and see if there's any further room for negotiation.
Even though you may not be having any immediate plans to sell a property, you should always check the resale value of the property. You should assess the resale value based on preferences of the general public, and not your individual preferences. For example, you may like a major design change made by the previous homeowner. But if the design change is very unconventional, it can affect the resale value of the property.
Also, if the property has been on sale for a long time and has not found any buyers, this can serve as a good indication of resale value. The delay in finding a buyer could be because of a problem with the location or other issues such as no parking space.
Leasehold ownership is a very common way of owning a flat in the UK. There are around two million leasehold flats in the England and Wales. When you purchase a leasehold property, technically you are renting the property for some time as the land belongs to someone known as a freeholder.
If a flat has less than 70 years of the lease, the cost of extending the lease goes up, which makes it very difficult to sell the property. If the lease term is expiring within the next 60 years, this could pose a serious problem. Anything less than 80 years, and you should get alerted.
You should be cautious, even if the estate agent gives an assurance of easy extensions. In order to extend the lease, you need to own a flat for at least 2 years. While a seller may pass on the property's rights to you, you cannot extend the lease till 2 years.
You should not depend on solicitors for detecting the expiration of the lease. Typically, it's the solicitor's job to point out short leases and that it will cost thousands of pounds to extend the lease. However, many solicitors don't point out the issue of short leases. You may have to ask the solicitor specifically to check the status of the lease.
If the property has a short lease, some lenders may even reject a mortgage. It's a good idea to include lease extension as one of the conditions in your offer, though it depends on the buyer whether they will accept the condition or not.
For leasehold flats, it is the responsibility of the freeholder or the landlord to insure the building and take care of communal areas. Leaseholders are required to pay ground rent and service charges for maintaining the property.
At times, these service charges can be really high. Some freeholders may charge double the cost incurred on any maintenance work. That's because freeholders are not paying from their own pocket, and so they go for products and insurance policies that pay them a high commission.
If you purchase a property through a broker, you will have to pay a lot in brokerage fees. If you can find ways of communicating directly with sellers, you can save a huge amount. For example, you can talk to people in your network and see if they know of any properties up for sale.
You should make an accurate estimate of time required to complete a purchase. It can take anywhere between 4 weeks to 8 months to shortlist a property, and make an offer to the seller. The stage of making an offer and exchanging of contracts can take from 2 to 6 weeks. This stage involves completing a survey of the property and getting a solicitor's go ahead on the property. Subsequently, the stage between exchange and sale, where you give the cash and take keys in return, can take up to 4 weeks.
Be patient: Unless you are very lucky, you will have to go through many rejections. Be assured that it's part of the property search process and there's nothing unusual about it. You should keep looking at new properties and make sure you thoroughly check every property. With regular and sustained effort, it won't be too long before you find your dream home.
Use our mortgage calculator to calculate monthly mortgage repayments based on different mortgage amounts and mortgage terms.