Agreeing to buy
Article reviewed: 2013/01/25 | Next review due: 2014/08/13
A step-by-step process of property purchases, with separate descriptions for yet-to-be-finished new build developments, and existing properties ready to move into.
- You can negotiate advanced releases of a specific plot you would like rather then waiting for it to be on the market – then you can reserve knowing that no one else will take it.
- In negotiating the price, see if you can get optional extras, wardrobes, flooring, parking etc included into the sale price.
- Make sure the development company are in financial good standing. Search business news headlines for the development company to see if anything positive/negative turns up.
- Following the property downturn, many vendors are still uncomfortable selling their house for less than they bought it for. However, this is often the case and people may decline offers too far below the asking price.
- DON’T FORGET that of the many thousands of people selling their houses there will always be people that HAVE to move and soon, whether that be because of a new job, relocation, and expanding family, marriages, deaths, etc etc. There is nothing stopping you putting in a very low offer and seeing what they say. In fact, if you are undecided between a few properties, put in very low offers with all of them and see if anyone wants to sell.
Stamp duty - For every residential property purchased, a tax called ‘Stamp Duty’ must be paid. You should remember to factor in stamp duty costs when budgeting to purchase a property, as this could be up to 4% of the value of the property – it can often be to your benefit to negotiate a price to just under £250,000 to save yourself an extra 2% in tax Under £175,000 = 0% until end of 2009. From 2010, this will be 1%. £175,000-£250,000 = 1% £250,000-£500,000 = 3% Over £500,000 = 4%
Conveyancing - The official term for the legal process of transferring property from one person to another.
Exchange of contracts - The swapping of contracts between a buyer and seller's conveyancers. Once contracts are exchanged both parties are legally bound to the transaction.
Completion - This process is the point when the money being used to buy a property is paid to the seller and the legal ownership of the property passes to the buyer.