Property
Buying a home in England and Wales
Estate agents provide advice and property details to buyers. But the agent's main concern is to get the best deal for the seller, who is the agent's client. As a buyer, you are the agent's client only if you are paying the agent to find a property for you.
- Personal interest
- Property particulars and viewing
- Making an offer
- Gazumping
- Repossessed properties
- Deposits
- Mortgages
- Surveys and valuations
- Legal advice
- Home Information Packs
- If things go wrong
Remember that estate agents may be in a position to benefit personally from the sale of a property. You must be told promptly, and in writing, if your estate agent, or a relative or business partner of the estate agent, wants to buy your property.
Property particulars and viewing
The estate agent can provide a written description of the property (known as property particulars). This will give you an idea of what a property is like. It is against the law for an estate agent to make false or misleading statements about a property. For example, if the particulars say the property has double-glazing and loft insulation, it should have these features.
You may see these terms in property particulars:
- Freehold - the seller has full ownership and the right to sell the property. Most houses are freehold;
- Leasehold - the seller has a lease on the property for a set time period. The seller can sell the remaining time on the lease but the property is actually owned by a freeholder. Most flats are leasehold.
If there are terms you do not understand, ask for an explanation.
If you think you might be interested in buying a property, the next stage is to go and see it. The estate agent cannot charge you for arranging a viewing or showing you round the property.
However, if you view a new property, or one that is still under construction, you may be asked to pay a non-refundable deposit or sign papers if you are interested in buying. Get advice from a solicitor first.
If you want to buy a property, you must first make an offer through the estate agent. This can be above, below or the same as the asking price. it is advisable to seek advice before making an offer.
When you make an offer, the estate agent must pass it to the seller promptly and in writing. The only exception is if the seller has told the estate agent some offers are not acceptable, such as those below a certain amount.
Estate agents must treat all buyers fairly. They must not hold back offers from buyers who do not want to use their other services. For example, you should not be treated differently because you do not arrange a mortgage through the estate agent.
The estate agent doesn't have to tell you about other offers which have been made.
It is not always the highest offer that wins. The seller may decide to sell to the person who can proceed with the sale quickest.
If your offer is accepted, the estate agent will send you a letter confirming the details. But at this stage there is no legally binding contract, and this is one of the only times where a contract is not binding. The buyer can still receive and accept other offers, and both you and the seller can renegotiate the price and any conditions of the sale right up to the point when contracts are exchanged or accepted.
Although the seller may have accepted your offer, the estate agent must pass on any further offers received unless specifically told not to by the seller.
This can lead to 'gazumping', where a higher offer is put in and accepted at the last minute before contracts are exchanged.
To avoid this, you can make your offer on the condition that, for a set period, other offers will not be accepted. Get advice from your solicitor if you want to do this.
You'll sometimes find that a property has been put up for sale by a mortgage lender, such as a bank or building society, which has repossessed it.
Repossessed property belongs to the lender (known as the mortgagee). When choosing a buyer for the property, the mortgagee has a legal obligation to get the best possible price, but may also take into account how quickly you can raise funds and exchange contracts.
If the mortgagee accepts your offer for a repossessed property, a procedure known as 'the notice of offer' sometimes follows. This may delay things.
Details of the property and your offer are advertised in the local press. The mortgagee asks for offers from other prospective buyers to be made by a set date, usually by sealed bids. If one of these offers is accepted instead of yours, the whole process may start again until the highest possible price has been reached.
When you make an offer, the estate agent may ask you to pay a pre-contract deposit of a few hundred pounds to show your commitment to buy. This is usually held by the estate agent.
Before you part with any money, find out from your solicitor if a deposit is necessary. If it is, check whether it is refundable if contracts are not exchanged. When you pay, get a detailed receipt from the estate agent.
When contracts are exchanged, you may have to pay a bigger deposit, usually 5 or 10 per cent of the purchase price. This will be held by the seller's solicitor.
There are a number of ways to find a mortgage. For example, you could shop around at banks and building societies. Alternatively, go to an independent financial adviser who will be able to tell you what's available and might be able to guide you towards a mortgage that will best suit your particular needs financially.
Estate agents can also give advice and may offer to arrange a mortgage for you. You do not have to take up this offer.
A mortgage is a large, long-term debt. You could lose your home if you can't keep up the repayments. Think carefully before taking on a mortgage.
Before giving you a mortgage, the lender will get the property valued.
The valuation helps the lender, but you may want more information from a home buyer's survey. This is a more detailed inspection of the state of the property. You could ask the valuer to draw up a home buyer's report while preparing the valuation for your lender. Or you may prefer to use a valuer who is not in contact with your lender.
You might want to get, or the lender may require, a full structural survey. This tells you whether the property is sound or whether major repairs are needed. A full structural survey should be carried out by a qualified and independent surveyor.
To find a surveyor, ask friends and relatives if they can recommend one. If not, look for details in the local phone book or ask in your local library. If you want to use a surveyor who is a member of a professional association look for the letters ARICS or FRICS or get details of members through the Royal Institution of Chartered Surveyors.
If you are buying a flat, you will probably be partly responsible for the upkeep of common parts of the building, such as stairways, car park, roof and garden. Ask your surveyor to check the whole building as well as the flat. Does the building need, or has it recently had, major repairs such as redecoration, or a new roof or a lift? If so, will you have to pay a share of the costs?
The cost of a home buyer's survey and valuation or a full structural survey will normally be based on the value of the property.
You can do the legal side of buying a property yourself. There are books on do-it-yourself conveyancing in your local library. But unless you are really confident that you know what you are doing, it is best to leave this to the professionals.
Solicitors and licensed conveyancers know the problems that can arise, can ask the right questions and are insured against making mistakes. They will also sort out your contract.
Fees vary and it pays to shop around. Try the local phone book or ask friends and relatives for a recommendation. The estate agent may be able to recommend a solicitor or licensed conveyancer.
Do not use the same legal adviser as the seller.
If it’s an estate agent, they must give you a copy of the Pack free of charge (although they may make a reasonable charge to cover their costs of copying and posting it). If the seller isn’t using an estate agent, you should be able to get the Pack directly from them.
How much will it cost me?
If you’re a buyer, nothing: you’ll get a copy of the Home Information Pack free on any property you’re interested in. However, a reasonable charge may be made for copying and for posting the pack.
Under Home Information Packs, the overall costs of buying and selling a home will be similar to now, but will be spread more evenly between buyers and sellers.
The new Energy Performance Certificate is a compulsory part of the Pack, and is paid for by the seller.
The Pack has to be available when the property is marketed – make sure you ask for it. When you get it, read it carefully, or ask your solicitor to look at it for you: it will tell you about the property’s energy efficiency, any issues that have come up in the local searches, and (if you have a Home Condition Report) anything you need to know about its condition.
When you have an offer accepted, make sure you give a copy of the Pack to your solicitor – this should save you time and money in the rest of the process.
Only items that are set out in regulations as either ‘required’ (compulsory) or ‘authorised’ (optional) may be included in the Pack. The regulations prohibit the inclusion of marketing or advertising material in the Pack, so make sure it includes only official material.
The Pack might also contain a legal summary, and answers to standard enquiries made of sellers.
Where searches, leasehold or commonhold documents are missing, the seller should provide a letter from a Home Information Pack provider, or whoever else has been commissioned to provide them, confirming that an agreement has been made to supply the documents as soon as practicable, and within 28 days except in exceptional circumstances. If this takes longer than 28 days, providers will be expected to demonstrate that they have made all reasonable efforts and enquiries to obtain them.
What does the Energy Performance Certificate say?
Check whether the Energy Performance Certificate gives a high efficiency rating. It will have useful advice on any improvements that can cut fuel bills and boost the energy efficiency of the property.
Is there a Home Condition Report in the Pack?
If your seller has commissioned one, a Home Condition Report will contain useful information on the property’s condition. These are currently voluntary, so there might not be one in your Pack.
Is there a legal summary?
Some Packs come with a legal summary, providing the most important information from its legal documents.
Are the searches and, for leasehold properties, the necessary leasehold documents included?
These items are not always easy to obtain quickly: at the moment, sellers have up to 28 days in which to get them for the Pack.
More detailed information is available at www.homeinformationpacks.gov.uk
If you are unhappy with your estate agent's services or feel you are being treated unfairly, try to sort things out directly with the estate agent (or the head office if the agent is part of a chain).
If your estate agent belongs to the Ombudsman for Estate Agents they will help sort the problem out. Or the National Association of Estate Agents may be able to help if your estate agent is a member.
