Home-buying cheat sheet (part 2)
You’ve already got an edge over other buyers with part one of our alternative home-hunting tips. Now we bring you part two, so you can house-hunt like a pro and avoid the most common slip-ups that can see your dream home slipping away.
Most people move house very few times in their lives – in fact the average time spent in a purchased property is the longest it’s ever been, at around 20 years. But unless you’re a serial home-hopper, it will always come as a shock just how long, convoluted and frustrating the buying (and selling) process can be. So here are some more tips to make it just a little bit easier.
- Consider going chain free
The housing chain – the very words can make your heart sink, if you’ve ever had to deal with a chain that’s collapsing, incomplete or just very, very long. All it means is the number of properties that need to be sold so that you can move into your new home, so it could be half a dozen or so, or none at all (e.g. if you’re currently renting and moving into an already vacant property). Chain-free properties are so desirable that they often sell at a premium – so why not make your own home into one? Put it on the market as chain-free and slightly over-value it, so you can move into rented accommodation, covering any extra costs with your (hopefully) higher sale price.
Naturally, a house marked as ‘chain free’ or ‘no upper chain’ is always worth a look if you’re buying. But don’t let the convenience of that blind you to its possible flaws.
- You can build a chain up or down
In most home-buying scenarios you will find yourself in a chain, so you need to know how to make the best of this. If you have a property of your own to sell, then you can approach the process in one of two ways. Some people decide to find a buyer for their current home first, so they know exactly what they’ll get for it and so how much they can afford. However, others choose to find the home they want to buy first, and only then put their property on the market. Each way has its pros and cons – if you’ve not yet sold, you may be trumped by someone who is ready to move. However, if you have sold, then you may be under time pressures to find a home to buy, or risk losing your buyer. See how fast the homes in your street typically sell – if they are snapped up quickly, it may be best to buy first, sell later.
- Check how much equity you have
It might sound obvious, but many a second-time buyer has failed to appreciate how much more purchasing power they have this time around. For instance, if your current mortgage repayments are only just affordable, you may think you can’t afford a much more expensive house. However, if you’ve been in your house a while and have a repayment mortgage, you will have been steadily paying down the loan and increasing your equity share. This means (for instance) that you could borrow the same amount as before but buy a considerably more expensive property, because of the amount you’ve paid already. You may also get more favourable mortgage terms now that you have more equity. Just remember that a lender may be reluctant to offer you a mortgage with a repayment term that would take you past retirement age.
- Remember who the estate agent works for
The estate agent works for the seller – not the buyer. Always bear this in mind in your dealings with them. They won’t necessarily mislead you, but they’re not out to give you a bargain either. If you are choosing an estate agent to sell your home, it can be a great advantage to be buying with the same agent, as then your interests are more aligned with theirs and they may work harder to complete the chain. However, if you’re moving to a different area then this may not be possible.
- Take nothing for granted
Murphy’s Law applies to buying a home: if anything can go wrong, then for somebody somewhere it already has. For instance, you may assume that any inhabited property must have working hot water, but you don’t know unless you turn on the tap. Be particularly vigilant if the property is ex-rental; the gas and electricity may be on card meters (this can also happen if the previous owners have been bad at paying bills) and it can be difficult to get supplier to remove these. Check too that all previous building work and extensions have had planning permission – if they haven’t, then incredibly you become responsible for them. Be doubly cautious about such work if the building you are buying is listed. And if a house looks like a bargain, don’t buy it until you know why.
Not for nothing is home-buying considered one of life’s most stressful experiences. We hope these tips will help you on your way. As an added bonus, here’s our Mortgage Survival Kit to give your application a head start.