Buyer’s Guide – Red Hot Property

Buyer’s Guide

At Red Hot Property, we understand that first impressions count. When selling your home, often potential buyers are first attracted to a property by what they see, and so showcasing your home to the market is the first step to drawing in viewings. At Red Hot Property we understand that buying a home can be one of the most stressful experiences in life.

However, there are certain things that can help to reduce this stress and so we’ve produced this handy guide…


Organise your finances

Find out exactly how much you can borrow, and what type of borrowing will best suit your circumstances. This can be done online or through a financial advisor – often for free. When organising your funds remember to include provision for:

  • Deposits
  • Surveys
  • Solicitors fees
  • Mortgage fees
  • Removal costs
  • Stamp duties

Requirements

Identify and prioritise your key requirements when looking to purchase your new home. These may include location, number of bedrooms, property condition, outlook and elevation, age, parking, room size, proximity to transport links, schools and amenities. The list goes one and will be unique to each buyer.

Register your interest

Let estate agents know you’re interested in purchasing a particular property, and maintain sensible, polite contact. Ensure they have your full and correct contact details, and an understanding of your requirements and buying position.

Be open minded

Keep an open mind and be prepared to view. You may never find the perfect property, and may have to compromise certain factors on your wish list. Remember, what you lose in one area you may gain in another. Particulars alone don’t provide enough information to make a valued and informed judgment. Only by viewing can you tell if the area and the ‘feel’ are right for you.

Offers

Put your offer forward in writing to the agent. This not only demonstrates your serious intent, but also shows the seller that you’re organised and in an attractive buying position.

Solicitors

Choose a recommended firm. It’s important that your solicitor maintains good communication with both you and the vendor’s solicitor. Most agents will have a list of solicitors who have successfully dealt with previous sales and can offer a good recommendation.

Types of ownership

There are four types of ownership:

Freehold

Freehold gives you complete ownership until the point of sale.

Leasehold

Unlike freehold, leasehold give you part ownership, with a right to live at the dwelling for a fixed period of time (generally 99 to 125 years). A landlord’s freehold to the building doesn’t allow them any access rights though. There can be rents to pay and service charges too, so factor this in to any budgets before deciding to make a purchase.

Commonhold

Commonhold exists when you buy out the landlord from a leasehold, however, there can still be some shared areas and services.

Shared ownership

Shared ownership is generally aimed at low income buyers, providing a ‘part-owned, part rented’ scenario. Usually there are opportunities to increase your share so that eventually, you own all of the property.

Legislation on cash buyers

The money laundering legislation insists that agents follow certain criteria when dealing with cash buyers. This includes gaining adequate proof of funds and specific identification from buyers. This will be logged, and any suspicions have to be passed on to relevant bodies. Beware if you are falsely claiming to be a cash buyer.

Stamp Duty thresholds

As a purchaser you will be liable to pay tax on your purchase, depending on the value of the home you purchase. The thresholds are as follows:

  • Nothing on the first £125,000 of the property price
  • 2% on the next £125,000 of the property price
  • 5% on the next £675,000 of the property price
  • 10% on the next £575,000 of the property price
  • 12% on the rest of the property price if it is about £1.5million

So for example, if you buy a property for £275,000, you’ll pay £3,750 of Stamp Duty. This is made up of:

  • Nothing on the first £125,000 of the property price
  • £2,500 on the next £125,000 of the property price
  • £1,250 on the remaining £25,000 of the property price

For more information about Stamp Duty, visit: https://www.gov.uk/stamp-duty-land-tax-rates

The agent’s role to the buyer

An estate agent works on behalf of and in the interest of the person selling the property. They do not work for the person buying the property – they cannot lead the buyer’s offers or show favour to them. The agent should act fairly towards buyers and without bias. The agent cannot, for instance, discount an offer because that buyer has their property for sale with a separate agent.

Surveys

The purpose of the survey is to highlight any work that may be required or potential issues with the property. Surveys also let any lender know that the property is worth the agreed price and is re-sellable.

The three types of survey generally available are:

  • Valuation
  • Homebuyer
  • Structural

Valuation

A valuation survey is conducted by a specialist surveyor to ascertain the property’s value and how secure a loan might be against the property.

Homebuyer

A homebuyer survey is generally used for properties built within the last 150 years or for homes that are of reasonable condition. It should detail any problems that might affect the property’s value.

Structural

A structural survey is a more detailed report that provides information on the construction and condition of a building. This report is particularly useful when buying very old or dilapidated properties, or those that have undergone major alterations.

Moving costs

Buying your new home can be costly. To help save you from any nasty financial surprises, you may want to think about the following:

  • Deposit
  • Surveys
  • Stamp Duty
  • Searches
  • Solicitors fees
  • Removal costs
  • Mortgage arrangement costs
  • Initial repairs – including decorating and refurbishments
  • Connecting utilities
  • Exchange of contract

Once you exchange contracts you are legally bound into the sale of that particular property. It can be very costly to pull out of a sale after this point. It is advisable, once all appropriate surveys and searches have been carried out, to move to exchange as soon as is possible to avoid any hold ups.

Completing the sale

The sale is complete after all relevant surveys and searches have been carried out, terms are agreed, contracts have been exchanged and funds have been transferred. At this stage you legally own the property. Congratulations – you can now collect the keys and have access to your new home.