House buying guide
Don’t get shafted by bankers
Case I: Sam, 25, and her boyfriend Mark found the flat they loved, had their offer accepted by the sellers and the advisor at their bank had agreed the mortgage. Perfect. That was until they returned to the bank to sign the mortgage forms. ‘The person we’d originally spoken to had left,’ says Sam. And everyone else denied all knowledge of our mortgage offer. After lots of hassle, the new advisor eventually offered us less cash at a much worse rate of interest.’
How to sort it: This helps to show just how important it is to get something from the bank in writing once you’ve been offered a mortgage. Never leave the bank without an official letter. Many lenders will issue you with what’s called an “agreement in principle to lend”. This isn’t a formal mortgage offer but at least you know where you stand when you look for a property.
If after visiting a couple of banks you still can’t get anyone to give you a mortgage, try an independent mortgage broker. These firms will find you a deal, but they’ll also charge you for their advice.
Don’t get stuffed by a solicitor
Case II:Dee, 28, went for a final look around the flat she was buying, only to find the plug sockets had been ripped out and a dirty rag pinned up where the curtains had been. She says: ‘The sellers had said they were leaving the curtain rails and the fittings. And they’d agreed to pay £600 to the lease holder for work on the flat, then hadn’t paid up. I hadn’t completed the sale, so I told all this to my solicitor. He told me not to make a fuss as it would delay things! I had to foot the £600 and also pay an electrician to sort out the sockets. The final insult was the solicitor’s bill which was £150 over what he’d quoted.
How to sort it: Choose a solicitor who’ll set out in writing exactly what he or she is doing for you and how much they’ll charge. If they’re unwilling or seem a bit ropey on paperwork, get a quote from another firm.
The solicitor should tell you about any problems at an early stage and chase up the sellers for removing any fixtures they said they were leaving. The Law Society says first complain to the firm direct. Ask to speak to the partner who deals with complaints, or better still, send a letter by recorded delivery.
Don’t get any nasty surprise bills
Case III: Caroline, 31, was glad to see the local council owned her free hold. ‘I worried about private freeholders who dream up big fake bills for painting and decorating, so I thought the council would be fairer/ she says. ‘But then an £8,000 bill for painting the outside of the flat arrived. We had to add it to the mortgage.’
How to sort it: Before you buy any leasehold place, tell your solicitor to investigate whether any major work has been done recently or if any is due to be done. Then you can weigh up what might be in store.
But if you do get a whopping bill after you’ve moved in, demand to see evidence from the freeholder of competitive bids for the work. Form a committee with others in the building to fight unfair charges.
Don’t fall for porky pies
Case IV:Gayle, 32, is an American who bought a house in England, but told her financial adviser she’d probably go back to the States at some point. ‘She told me an endowment mortgage was best,’ Gayle says. ‘She said I could take it to the US with me - but that wasn’t true. She also told me she didn’t get a penny from selling the endowment. In fact, she made £4,000.1 felt really cheated.’
How to sort it: If you think you’ve been sold a bad deal, an independent mortgage broker will be able to look at your paperwork and figure out if anything’s gone wrong.
If you’ve been given negligent advice and told lies, you can claim compensation. Write to the company who employed the salesperson and if they don’t settle the complaint to your satisfaction, take your case to the Financial Services Authority . They’ll investigate.
Don’t get gazumped
Case V:Sarah, 32, forked out £800 on a flat she ended up losing. ‘I paid for a survey and arranged a mortgage through the agent’s own financial salesman, because I was told it’d speed things up. Then the agent said the seller had taken the flat off the market due to ‘personal problems’. I was really upset but found another flat nearby. A couple of weeks later I saw the original flat back on the market - with the same agent -for £15,000 more than I’d offered!’
How to sort it: Gazumping isn’t illegal and happens all the time. It boils down to the seller getting greedy and welching on your deal. Sometimes someone puts in a higher offer and steals the property from under your nose. Some estate agents offer anti-gazumping insurance, but it’s rare.
Using an agent sporting the logo of the National Association of Estate Agents can offer some protection. Members abide by our code of practice and have to tell buyers if a property is going to stay on the market after their offer’s been accepted. And don’t take a mortgage from a salesman who has a deal with the agency without getting a second quote. An agent shouldn’t discriminate against buyers who go elsewhere for their finance. There’s also a watchdog that will pay compensation if you’ve been treated badly as a buyer or seller. It’s a voluntary scheme.
