Advice on buying a house off a friend

[hop]

FIND AN INDEPENANT FINANCIAL ADVISOR.
They are obliged to find the best deal for you.

Yes and no. They are obliged to offer you the best deal, however they may only sell products from a limited set of companies... They may choose the companies based on the amount of commission they receive. Therefore you many not get the best deal overall.

You should also be wary about shopping around for mortgages and even loans in general... If you are going to shop around you want to try be and quite specific in telling the bank / IFA that you are looking to determine the rate but that you don't want to apply at this point, make sure you tell them that you don't want them doing a credit search until you have determined which product to use.
This may seem odd, however each credit search is marked on your credit history. If a loan company sees lots of recent searches they often decide that you have probably been turned down by someone else, which makes getting the mortgage / loan harder even though you were trying to be sensible and find the lowest rate. Don't assume that these things work with common sense, they don't.

 

[db]

There are generally a few simple checks you can do yourself which cost you nothing, but might set off a few alarm bells.

See if you can find the building control page on the councils website, if you are buying in stafford then have a look here.

Things to check for is have controlled works been registered, if not it could be a warning sign that the workmanship may be suspect.

now this is very interesting.. i know they have had the windows replaced, the cellar plumbed (so that the washer/dryer can be put down there), and the roof "done" (i don't know exactly what this involved, but i remember him having it done at the time & it cost him a few grand), yet i can't find the house on the link you have provided..

that being said, i can't find any house on the street on the link you have provided! perhaps i am using it incorrectly?

i input the house number (tried several)
i input the post code
i started to enter the street name & it auto-completed, so i selected it from the auto-complete options

as i say, i tried several house numbers (including the one we are interested in buying) and all of them returned the same result:


You searched for: Property Name/Number = [the no. i entered]; Street = [the street i entered], Stafford; Postcode = [the postcode i entered]
No matching properties could be found.

am i doing it wrong?

 

[db]

Yes and no. They are obliged to offer you the best deal, however they may only sell products from a limited set of companies... They may choose the companies based on the amount of commission they receive. Therefore you many not get the best deal overall.

You should also be wary about shopping around for mortgages and even loans in general... If you are going to shop around you want to try be and quite specific in telling the bank / IFA that you are looking to determine the rate but that you don't want to apply at this point, make sure you tell them that you don't want them doing a credit search until you have determined which product to use.

This may seem odd, however each credit search is marked on your credit history. If a loan company sees lots of recent searches they often decide that you have probably been turned down by someone else, which makes getting the mortgage / loan harder even though you were trying to be sensible and find the lowest rate.

indeed - i made this clear to all the banks' mortgage advisors that we spoke to, for exactly this reason.. as you can probably tell from my referral-grabbing signature, i am well versed in all the various "money saving" websites out there, and have a decent knowledge of things like credit scoring, etc..

in fact, i spent yesterday going over my credit history, and composing letters to any creditors who have failed to update my status correctly (which there were a few of - i haven't missed a single payment or had any credit trouble in 6 years, but some creditors seem a bit lackadaisical at closing off accounts that are long since settled)..

i know i keep saying it, but thanks for the continued input to this thread.. as hothouse flower says, buying a house is a massive commitment, and as a first time buyer the idea of spending so much money on something really is quite daunting, so everyone's posts and experience are really appreciated

 

[hop]

now this is very interesting.. i know they have had the windows replaced, the cellar plumbed (so that the washer/dryer can be put down there), and the roof "done" (i don't know exactly what this involved, but i remember him having it done at the time & it cost him a few grand), yet i can't find the house on the link you have provided..

that being said, i can't find any house on the street on the link you have provided! perhaps i am using it incorrectly?

i input the house number (tried several)
i input the post code
i started to enter the street name & it auto-completed, so i selected it from the auto-complete options

as i say, i tried several house numbers (including the one we are interested in buying) and all of them returned the same result:


You searched for: Property Name/Number = [the no. i entered]; Street = [the street i entered], Stafford; Postcode = [the postcode i entered]
No matching properties could be found.

am i doing it wrong?

Probably not... You might have just found a good negotiate point to get the price down or you might later want to convert this information to your surveyor so have pay extra attention when looking at these areas.
You can also take out indemnity insurance and the like by if anything goes wrong be prepaired for a lot of hassle.

Try a few random searches to see how the site works

Eg postcode - St16 1pd (eccleshall road)

If you pick a house eg 127 and click on the triangle then related info. Now you can see this house has applied for permission to build another house in the garden and has applied for an extension.

As I said there are many works which should be notified to the council, if you are unsure think if the part could be structural, electrical or something like a party wall.
The council will let you know if they should have been notified or they should have been out to the site to inspect the quality of the workmanship.

 

[John Marwood]

I had loads of reccomendations for Janet Grundy, so went there. Things went wrong, nothing moved for months, and I spent every lunchtime and evening phoning round chasing people. Then one day my solicitor dissapeared, I called in to be told she no longer worked there. Janet herself took over and suddenly everything went smoothly again!

Unfortunately she then moved to Frisbee I believe? Now I've never used them, but from the hash my made of my GFs mortgage a few years back I'd avoid them like the plague. What this tells you is personal experience is only relative to that persons situation!

I believe Janet Grundy is now retired

 

[Dabbler]

My advice would be to get a good surveyor who is thorough! When we last moved, we used a surveyor from Uttoxeter (forgotten his name now), but he missed loads that I believe he should have spotted. We then spoke chap called Alan Appleby (who lives Gnosall way I think), and he was brilliant, explaining things very clearly and highlighting quite a bit in the first survey that was plain wrong. We first used Alan Appleby about 16 years ago when we moved to Stafford and because we bought the house we were renting, were there when he did the survey. If you can be present when the surveyor is there, you can ask questions as you go round.

For solicitors, we used Henry Hutsby at Hutsby Mees, who was brilliant and kept us informed at every step of the way. I had hoped we'd moved to our 'forever' home, but Mrs D has recently mentioned moving to a more energy efficient house - I can't think of anything worse than moving....

 

[hop]

.... but Mrs D has recently mentioned moving to a more energy efficient house - I can't think of anything worse than moving....

Moving is an expensive business and if you consider the hit you will take in Stamp Duty, legal fees and the like you could spend a great deal on making you current home energy efficient.
Also you might want to look at 'The Green Deal' which will be launched in a few weeks. Using this scheme you can get energy efficient improvements with no upfront cost. This scheme will pay for the improvements and you pay pack by the differential on your energy bills.

E.g Cost on new Grade A condensing Boilder installed = 2k
Gas saving of boiler = £200 per annum.

Current Gas bill = £1000 per annum
Gas bill will Grade A boiler = £800
Payment towards new boiler = £200

So overall you get the work done at no cost also consider that over time the cost of utilities is only heading in one direction, so as time passes the equations moves to make things more beneficial from your side.

Also includes windows, insulation (interior, exterior cavity) etc...

 

[Rikki]

If you have the money to pay for any of the improvements covered by the green deal yourself, your far better off doing so. The green deal accredited installers will more than likely charge quite a bit more for the job.

As far as boilers go I don't personally think its the most economical choice, The lifespan of condensing boilers is on average going to be nowhere near the older, simpler, less efficient ones. Which may mean you don't actually end up saving all that much, however gas prices rising may counteract this.

 

[hop]

If you have the money to pay for any of the improvements covered by the green deal yourself, your far better off doing so.

Paying for something outright is generally the best option. However I think the Green Deal is an interesting scheme in that it allows home owners to have energy efficient improvements done with no upfront cost.

Of course each person will have different ideas on what constitues the most effective form of energy saving and as you point out it can be difficult to quantify if there is true saving over the lifecycle of the product.

In the above scenario, and I don't profess to have any detailed knowledge on the gas savings between a rated and g rated products the pay off would be 10 years - indeed this would depend from household to household. Of course a modern boiler is more complex and more likely to break down than a simpler product so this should also be factored into any consideration.

Double glazing for example is widely considered a waste of money when being retro fitted. Only 10% of heat is lost through the windows and a double glazed sealed unit reduces this to 5%. However the units break down after 20-30 years and you see a mist of water in them. PVCu frames are also filled with metal for strength, however the u factor of the plastic results in heat losses you would not get with a wooden frame.

In most cases you would get the biggest bang for your buck from loft insulation and cavity wall insulation. The cost of insulating solid walls is still high and if done externally can alter the physical appearance of the building. Some homeowners may be unwilling to put up some battons internally on exterior walls to insulate them due loosing a small amount of space. I believe over the course of the next few years we may well see cheap renders which can be used to insulate solid walls.

However the green deal at least on paper looks like a positive step in the right direction. In many cases the cost savings may well be marginal, however not everything can measured in terms of outright cost. If you have a cold old house undertaking improvements to make it more energy efficient may not result in outright saving you might only break even. However I would be willing to bet that there is a considerable amount of feel good factor knowing that due to the improvements your home will now heat up quickly and stay warmer for longer.

Moving is expensive e.g. if you were to buy a house worth £250,000 then you would have costs such as the below

Stamp Duty (3%) - £7,500
Estate Agent Fees - (1%) - £2,500
Legal Fees - £1,500
Removal Fees - £2,000

In this scenario the fees which constitute dead money amount to £13,000. Which could be used to pay for a fair amount of energy improvements

 

[John Marwood]

I think stamp duty on a £250,000 would be £2,500 not £7,500

If you buy a house for £250,000 you do not pay anything to the estate agent, the seller does

There!


I just saved you £6,500

less my 10% commission

That's £5,850

enough for a brand new

 

[tek-monkey]

Wouldn't that be £7,500 saved?

 

[hop]

I think stamp duty on a £250,000 would be £2,500 not £7,500

If you buy a house for £250,000 you do not pay anything to the estate agent, the seller does

No since the amount at 250k is 3% not 1%.

Perhaps you should consult the relevants bands.

http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm

The buyer does not pay the fees unless you have a very very strange agreement. I certainly never paid the estate agency fees on my current house which cost over £250k

On the next purchase I will be paying 4% stamp duty which kicks in at 500k

 

[Dabbler]

Sorry, I didn't mean to hijack the thread. Our house has solid walls and tall ceilings, it gets very cold in winter, even with the heating on. I suspect that I will be able to resist the calls to move and we will certainly be investigating green deal in due course.

Back on topic though, my other piece of advice is shop around on everything. We used Evans to move us, they were very competitively priced and very professional, bringing in extra men at no extra cost to unload the van at a reasonable hour due to a completion delay that meant we didn't get our keys til 4.30pm!

 

[John Marwood]

Wouldn't that be £7,500 saved?

*coughs* I forgot to mention my administration costs

yes

 

[John Marwood]

No since the amount at 250k is 3% not 1%.

Perhaps you should consult the relevants bands.

http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm

The buyer does not pay the fees unless you have a very very strange agreement. I certainly never paid the estate agency fees on my current house which cost over £250k

On the next purchase I will be paying 4% stamp duty which kicks in at 500k

Up to and including £250,000 houses are rated at 1% so £2,500

And I think you were the one who said in your original quote that ...


"Moving is expensive e.g. if you were to buy a house worth £250,000 then you would have costs such as the below

Stamp Duty (3%) - £7,500
Estate Agent Fees - (1%) - £2,500
Legal Fees - £1,500
Removal Fees - £2,000"

So if you were simply buying a £250,000 house you would have £2,500 in 'stamp duty' and £0 in estate agent fees

Saving you £7,500 if you were Tek Monkey or £6,500 if you were anyone else and hadnt seen my extortionate £1,000 administration fee

As I said

 

[hop]

Up to and including £250,000 houses are rated at 1% so £2,500

And I think you were the one who said in your original quote that ...

So if you were simply buying a £250,000 house you would have £2,500 in 'stamp duty' and £0 in estate agent
As I said

Ok I picked a cusp amount and stand corrected since as you rightly point out the figure is over 250 not on the nose. In this case you are choosing to be pedantic since as I'm sure you are well aware when a property reaches the cusp figures or falls within 15k the usual tactic is to agree to pay a lower amount for the sake of the Land registry and have an agreement to the effect the difference will be made up in purchasing the chattels.

Your point regard the estate agent is mute, since the poster said they were considering selling the house which he considered to be his final house to purchase a more energy efficient one.

In this case the poster clearly would be both a seller and a buyer and so would incur the cost of an estate agent to sell his own home.

I was merely giving a typical representation of costs which would likely be incurred in selling a home and not only suggesting that this money could be saved by staying put but also suggested a way the poster could stay out and carry out the works with no upfront cost. As far I can see tho is far more useful advice than being pedantic over £1 because in the real world no one would fall so close the a stamp duty band, so there is no point be pedantic over a situation which would never actually occur.

 

[John Marwood]

 

[ATJ]

I moved into my first home almost 1 year ago, and as a first time buyer, we were exempt from stamp duty- has that exemption now been rescinded? It's worth looking into because our Solicitor didn't bother asking and automatically put the 1% on our bill until we told them otherwise.

Frankly, for us, the estate agent did nothing of use at all. All the advice we needed came from our solicitor (Frisbee), all the background to the property came through Frisbee or from my own research (flood records, planning records available online) and the surveyor and valuation were recommended by our mortgage company.

I initially demanded a full structural survey, just to be on the safe side, and was told by the surveying company that it was unnecessary for our property and indeed, for almost every property under 100 years old.

Wasn't overly impressed with Frisbee's. On one hand, they researched the property and read all the caveats dating from the 1930s, but on the other they thought the brook running to the rear of our property was a public footpath and were concerned we may have to maintain it. They were good in insisting on all the building work certificates, but OTT on other issues which a simple visit to the street would have told them weren't relevant. Incidentally- my own planning search on the SBC website came up with an issue the solicitors never even noticed.

 

[db]

well, thanks for all the great advice in this thread, but it turns out we might be knocking this purchase on the head.. what with all the government schemes chucking money at new-buy schemes, it works out cheaper for us to buy a brand new house at more than twice the price of the ol' terraced on castletown..

shame, because we loved the area, but it's hard to argue with fitted kitchens and en suite bathrooms!

 

[Glam]

well, thanks for all the great advice in this thread, but it turns out we might be knocking this purchase on the head.. what with all the government schemes chucking money at new-buy schemes, it works out cheaper for us to buy a brand new house at more than twice the price of the ol' terraced on castletown..

shame, because we loved the area, but it's hard to argue with fitted kitchens and en suite bathrooms!

Awwww we would've been sort of-ish neighbours!