This year we are buying our first house. As first time buyers, I wanted to document the process in plain english to help anyone going through the process. This is part 2…
Firstly, we had to contact the sellers estate agent and confirm we were in a position to buy. The required scans / copies of the below documents:
This was all after the offer was accepted so I assume it’s like ‘backing up’ your offer with facts. The estate agent replied and said everything was good to go and we needed to find a solicitor
Looking for a solicitor is easy but somehow stressful. I guess putting blind faith in a company is not easy but the truth is that any would have been good for us.
The first step was popping our postcode into reallymoving.com and looking at average quotes in our area. They ranged from £850 – £1200 so of course we wanted to find something on the lower end of that scale.
After contacting and getting quotes from 4 – 5 different local firms, we chose a company who quoted us £850 and had come recommended from a friend who had recently used them. Being on the lower end of the price scale and recommended was a no-brainer. I’ll cover the fee’s breakdown in my next monthly post so click the link at the bottom to read the series.
There’s not much to write because our Mortgage Advisor took care of it. He went to the bank and officially put in a request for the mortgage. The bank booked in a valuation which happened within a week. My understanding of a valuation is that they aren’t necessarily checking your house is worth £XXX. What they are looking for is that it is within the range for the area and type of house.
After the valuation, it took 7 days for the bank to get in touch where they said:
We’ve received the valuation report back on your clients application. The property value has come back in lower than the value given on the application.
The property has been valued at £(1K lower than we are buying it for!). This means that they are no longer able to take their current product choice and have the following options:
1. Complete the requested reports / recommendations.
2. Reduce the loan amount to keep the same product.
3. Keep the requested loan amount and change the product to 95% LTV (Please note we cannot guarantee that application will pass credit score at the increased LTV).
4. Application to be closed
A retention of £1000 has been placed on the property regarding which the valuer has provided the following comments: “It is recommended that a specialist report from a PCA (Property Care Association) registered damp/timber firm be obtained upon the extent of rising damp and condition of sub-floor and adjacent timbers before exchange of contracts.”
What this basically means is that the valuator went into the property and saw something that make them think there was damp or a risk of damp. In plain english, our options were:
I was on my way back from Madrid for work so we didn’t have a lot of time to discuss what we wanted to do but we were both adamant we wanted to go further with this house and make the decision based on what the report said. Our mortgage adviser said that he doesn’t want to recommend paying for the report because if it came back clean then it’s a waste of money and we would blame him for recommending it. However, I don’t consider spending £300 to find out the house is damp-free a waste! It’s a good investment especially because we know how stressful and expensive dealing with damp can be based on our rental house.
If you’re having a damp and timber report done, you must make sure the company is registered with the PCA (Property Care Association). Also, I read that there are companies out there that will do it for free however these are dodgy and will find a way to charge you more.
We rang the estate agent and confirmed with them that we needed a damp and timber report. We aren’t sure if we had to do that but wanted to be open and honest and leave no stone unturned.
We then rang a few companies and the local damp firm turned out to be the cheapest at just £150 whereas the global firm we contacted quoted £480! Our Mortgage Advisor said that we could also request that the sellers pay half because they realistically don’t want to go back to market.
After we agreed to the local firm, we rang the estate agent again just to confirm and the local firm had actually already contacted the estate agent and booked it in for a weeks time. They hadn’t yet asked the sellers if they would go half so we re-rang them 3 days later and reminded them. Unfortunately they said no to going halves but it didn’t hurt us to ask!
Unfortunately the house came back riddled with damp issues – we were heartbroken. Everyone says that buying a house is one of the most stressful processes you’ll go through however I always through they meant the organisation and logistics. I didn’t realise the meant the emotional side of things.
I was surprised by the emotions I felt when this house didn’t work out. I felt helpless, out of control and like it was the right path but felt so hard. Essentially, I haven’t felt that since I last broke up with someone.
So we went back to the seller and asked if they were willing to budge on the asking price considering we would be buying a house with 5-10k worth of damp issues. Surprise, surprise they didn’t. they didn’t even entertain the idea. They actually said they disagreed with the report and there’s ‘no damp’ so they were going to relist it we weren’t interested.
They tried to call our bluff. Except that we had no bluff to call so we pulled out.
Back to square one…
I’ll write a post monthly about my process as I hope these posts help someone understand the process in plain english rather than legal talk. You can keep up to date with my house buying process here.