According to Rightmove the average asking price of newly marketed properties continues to rise, despite a dip in sales last month compared with the same time last year. For a successive third month, prices have hit a record high; a 0.4% in just the past four weeks. That might not seem a lot but on a £250,000 house, that’s £1,000 in just a month. Rightmove states that the annual increase in asking prices has risen nationally by 1.7%, largely due to a lack of stock in some areas of the country. Here in the south, there has been an increase of 17.5% of properties coming to the market from this time last year, suggesting that in our region, it’s still a buyer’s market, however, if you are about begin the process of buying a property, now is not the time to rest on your laurels. Spring (once we finally moved on from that long winter!) has proved a busy period for sales and we are seeing an increase of sellers but also an increase of buyers through our doors at Sure Towers in Worcester Street. So, here’s my advice to help you, so that you don’t miss out on moving-in to your ideal home:
- Make yourself ‘proceedable’.
First things first, you need to look into your finances and evaluate the true cost of buying. In doing so, you’ll know what you can afford and, in turn, what you’re going to get for your money in a certain area, and what to search for. Martin Lewis’ Money Savings Expert website has a great mortgage calculator which you can find here http://goo.gl/EtDqza. In terms of other costs you will need to factor in, you’ll need to think about:
- Deposit: Gone are the days where you can get 100% mortgage. Most mortgage lenders currently require a deposit of around 5% – 25%. Generally the more deposit you put down, the better lending deal you’ll achieve, but either way, you’ll need to shop around to find the right mortgage over the right term for you.
- Mortgage Arrangement Fee: You can expect to pay your mortgage broker and/or lender and arrangement fee for organising the mortgage. Usually non-refundable, they can vary but are generally in the region of between £500 – £1,000.
- Valuation & Survey: Your mortgage lender will charge a fee to value the property. They usually instruct an independent Chartered Surveyor to carry this out on their behalf. A basic valuation is usually around £300 – £500, to confirm the property exists and the current value. You can opt for a more expensive and extensive survey which will look into the structure of the property. This can prove itself cost effective in the long run as it might throw up – especially on an older property – structural matters which may require attention in the immediate or near future, which might need budgeting for, for when you’ve acquired the property. A valuation is essential in order to confirm you are not paying more than market value for the property. A survey can be used as a negotiating tool should it highlight that major building works are required and you wish to try and re-negotiate the purchase price with the vendor.
- Legal Fees: Some mortgage lenders will contribute legal fees but generally you have to use their approved solicitor. You can approach solicitors to get a quote for their basic conveyancing package but think about budgeting a little extra for any further searches or correspondence which might be required. Somewhere in the region of between £500 – £1,000.
- Stamp Duty: Any purchase of a property of more than £125,000 will require a Stamp Duty tax payment to be made unless you are a first-time buyer and the property is less than £300,000. You can visit a Stamp Duty Calculator here http://goo.gl/VQLYgy.
- Removal Costs: This will vary greatly depending on the size of property you’re moving from and to and whether you have some generous friends or family members who are willing to lift and shift your furniture, however, you might need to budget for hiring a van or a removal company.
- DIY: Once you’ve moved, you’re very likely to want to do some decoration or home improvements; have an idea of what they might coast and budget accordingly.
Once you’ve got a ‘Decision in Principle’ from a mortgage lender, you are going to be in a ‘proceedable’ position. That means that you’re free to view properties and make genuine offers which, if accepted, could mean the property is taken off the market and you can move forward with purchasing. Using the guide above, you can budget for other monies you’ll need and come up with a definitive purchasing price so that you can start looking…
- Do your research.
You know the upper limit you can afford. When you’re looking on search engines such as Rightmove and Zoopla, you can afford to look a little higher than your budget, perhaps up to £5,000 – £10,000, in the event you can talk a vendor into a cheeky offer. Once you’ve worked out that figure, you can start looking at what you can afford in certain areas. For example, if you’re looking in Gloucester with a budget of £160,000, it might buy you a lot more in Linden or Hempsted than it will in Abbeymead or Longlevens. In order to whittle down what’s important to you, I’d recommend writing down what you’re really looking for…
- Start making lists.
- ‘Must Haves’: Depending on your situation, this is going to vary greatly, but we all have an idea of what the property must have. Perhaps you’re a couple getting married. You want to have a family in the future but you don’t really want to have to move again before starting a family; so how many bedrooms do you really need? Is outside space more important to you or allocated parking or a driveway? We all have things we are prepared to compromise on – your ‘nice to haves’ –and other factors that we’re not. Get to know your own mind by writing down what you really
- Areas & streets: Before you get as far as deciding whether the property must have an en-suite, consider where you really want to live. It might be a specific village, or a certain area of the town or city; if you are keen on specific areas, look at what you can afford in that area. Then, work out whether you can afford your list of ‘must haves’ in a property, in that area.
- Pros / Cons: This is a list to carry out once you’ve viewed a property, especially if you can’t make up your mind which property to offer on. If you’re a family, you may have found two lovely houses which meet your needs and are finding it hard to make a decision. Consider all factors; which one is situated in the best school catchment?
- Get organised with your viewings.
Once you’re in a proceedable position and you’re certain you know what you’re looking for, you’re ready to begin organising viewings. Where possible, I would always advise block viewings. You’ll be able to be more objective if you’re viewing on the same day, in the same weather conditions (believe me a sunny day can make all the difference on whether you like a property or not!). Obviously, this isn’t always possible but viewing properties close together will help you compare them fairly. Compile pros and cons lists to objectively appraise them and book second viewings for any contenders. Second viewings are essential, even if you are being pressured by an agent that you might miss out to another buyer if you don’t get an offer in. Second viewings are great for picking up the ‘nitty gritty’. Cracks, leaks, room sizes; all the things we don’t fully appraise on our initial viewing when we’re ‘getting a feel’ for the property. It’s always a good idea to take a tape measure too, to check the TV is going to fit into that alcove or the bed will go up the stairs.
- Deal Breakers: Know when to walk away.
You’ve done it. You’ve got yourself in a proceedable position, you’ve analysed what exactly you want in your new home, you’ve objectively appraised the properties you’ve viewed, you’ve whittled it down, tried not to let your heart rule your head and you’ve gone as far as putting an offer in; congratulations! Being in a proceedable position you should, theoretically, be in the most attractive position to the vendor, especially if you are a first-time buyer or have a acquired a buyer already for your property. There really isn’t much more that you could do. Sometimes, a cash buyer with no mortgage could be offering against you and look more attractive to a vendor, and if you have something to sell and you’re going up against a first-time buyer, you might not look so attractive either. If you’ve watched programmes like Location, you’ll know that there are various tactics for offering. Some people start low and work up. Others put in their best and final offer. Whichever tactic you choose, know your limit. If you can’t afford more then go to your limit and don’t offer above. If there are no better offers on the table, you might find that the vendor reconsiders and accepts your final offer. If they don’t, then panic not. There is more than likely another property out there which you can afford.
A lot to take in. However, doing your research and putting yourself in the best position possible before viewing properties and making offers is your best chance in securing the right property for you. If you would like to discuss anything in this week’s blog or would like to register your interest to buy in Gloucester, Forest of Dean or Stroud, then we would love to hear from you. Call us today on 01452 310999 or email us at gloucester@surepropertygroup.com to book your free market valuation. With highly competitive fees, we are here to help you make your next move.
Best wishes,
Rob Buckley
Director
Sure Sales & Lettings
* According to Rightmove in Estate Agent Today 18th June 2018 http://goo.gl/B5P7eh