I am keeping a running diary of my house purchase that is currently underway. Read how it progresses over time!
First, a little about us and our situation. We are a young couple who have very recently become parents to a beautiful baby boy. We currently live in a spacious Victorian conversion one bed flat in South East London. When I say spacious, it is getting less so as our baby grows and we feel we should move in the next six months or so into a family home.
The mortgage on our flat is low so it makes sense to hold on to the flat and let it out, which will actually make money each month. Of course selling it would allow us to buy a larger property to move to but I am happy with what we can afford without the sale and like the investment opportunity as well as the golden status of "chain-free buyer".
This is a running account of our progress from living in a one bed flat in South East London to living in a family home in a similar area. I am being tight with details of deposits, names, agents and locations for now since the purchase is still in progress:
Walking past a Santander, I decided to pop in to renew my ISA to a more productive rate - unfortunately rates are not what they used to be. When asked, "Is there anything else we can help you with like mortgages or loans?" I said, much to their surprise, "Yes! I would like to know how much I can borrow for a mortgage." They told me, based on back of a post-it note maths, I could roughly afford a £300k house. So now I roughly knew my budget.
Viewed an end of terrace three bedroom 1930's property with off street parking and a large garden with a guide price of £300k. Stupidly, I double booked ourselves that night and so had to view it alone while my partner entertained guests. So my opinion alone was that it was okay but I was very disappointed with the kitchen since it was dated and more importantly, very small. Knocking down walls and commissioning extensions is something that does not come naturally to my me so I felt like this wasn't the one for me.
Saw a mortgage advisor after work near the Old Bailey. Very nice guy who clearly knew his stuff. Unfortunately his Central London location came with a Central London price tag of £500 on completion of the mortgage. I listened to his basic advice and that was the last I spoke to him.
Had my one bed flat valued by the local estate agent. The chap gushed with enthusiasm about my property - and it is a nice property - but felt there was more than an average helping of flattery lined in his words. It was supposedly difficult to value since it is the only one bed flat in the area (the rest have been converted into two bed flats due to the spacious Victorian layout). He told me it would let for a few hundred pounds more than my mortgage costs per month and that is what I wanted to hear.
An hour later we looked at another mid terrace three bedroom property on the market for a lot lower than our budget at £265k. As we arrived we realised it had no off-street parking and the front patio we previously thought could easily become off street parking was blocked by a gigantic oak tree. Never-the-less the downstairs was nice, boasting a long but narrow kitchen, lounge diner and a long garden. As soon as we got upstairs we realised the reason behind the low price point. First and second bedrooms were very small and the box room was just ridiculous. The owners had put a cot-bed in there as I doubt a single would fit. That one was a no.
Second viewing of the 1930s end of terrace first seen a week ago by just me, now armed with my partner and baby boy we would critique it one last time. Not sure what happened the first time, but this time I saw an average kitchen that really wasn't that small, sure it needed a refit in due course but the house as a whole was actually very nice. We decided it is a great thing to be able to build on it as the years go buy. Extending rather than moving could potentially save us a lot of money one day in the future. Now to decide on an offer...
I waited until the agent called me back to make it look like I wasn't that keen on the 1930s end of terrace. I ummed and arred in my review of it and the work it needs. I put in an offer of £270k. £30k less than the asking. I based this on an arbitrary discount of 10% since I thought that would be a good start to a negotiation. I had a lot to learn but the offer was made.
Whilst on the phone the agent booked me for that Saturday to see more local properties based in the area on at £300k and £320k.
Offer rejected. I asked what the vendor realistically wanted and I was told, "Well, the asking price." I was hoping, he'd say £290k, I'd say £280k and we'd agree on £285k. I was quite wrong. I said, the offer stands and I will wait until I have seen more houses since I'm getting a feel for house prices in the area - which I was.
Saw two houses around the corner from the 1930s end of terrace. The first was an elderly lady's 3 double bedroom semi detached house with a large garden, off street parking and a downstairs WC as well as upstairs bathroom. It was rather large but needed complete modernisation, the bathrooms in particular. It was on the market for £300k.
Just for fun we looked around the other property on the same road that was on at £320k since it was the same property structure but modernised so we could get an idea of what the elderly lady's house could become with work.
Later in the day we put an offer on the old lady's house for £285k. 5% less than the £300k asking. The agent immediately suggested this wasn't a wise offer since it has had a lot of interest so I immediately increased my offer to £290k. I noted a change in his tone of voice and I was encouraged to come in to prove my financials the coming Tuesday. A second offer was made and it sounded positive.
Called Santander to discuss a mortgage. Due to my self employed status I found it very difficult proving I am a good borrower since several key points to my income were discarded by their set requirements. I would not recommend Santander for a mortgage if your finances do not fit into a simple internet calculator. I feel, any application that requires a bit of human thought is not what they are after.
Discussed my finances with a mortgage advisor. He was very friendly and understanding of my particular style of employment, he said and then later proved that getting a mortgage up to and even a bit over the amount needed to purchase a £300k house. This broker charges £250 for his services but due to the hassle I got from Santander and Halifax when I approached them alone I thought it quite reasonable.
Received a call from the estate agent representing the elderly lady's house saying my offer has been rejected and another buyer's offer has been accepted and I was asked if I'd like to up my offer. From the start I decided I would go up to £300k on this property so I put in my final offer of the full asking price, £300k. I wasn't sure why, since I felt like this property had been someone else's since I made the offer at the weekend. In hindsight I think I was being strung along in case the other buyer struggled to get a mortgage agreed.
I booked in two viewing of other properties for the coming Saturday since I felt as though it was all over with the elderly's house.
As anticipated, my offer for the full asking price on the elderly lady's beautiful 3 double bedroom semi-detached house was rejected and the property taken off the market just one week after it listed. Wow! Now I feel I am beginning to get an understanding of the market value in the local area, which is a great thing.
We have no irons in the fire. Well, we still like the 1930s end of terrace but are adamant it is not worth the asking of £300k since the one just gone was much larger with heaps of potential and went at the same price (possibly more). Maybe we will put in a more sensible offer in due course but we do not feel rushed. What I was not going to do is get into a bidding war on the elderly lady's house. Or any house for that matter. Getting overly emotional on such a big purchase has got to be a bad thing.
Viewed two houses. The first was a mid terrace 1930s property with a nice extension. Its off street parking was awkwardly tucked around the back but the road had plenty of space to park in. It was quite far from the local train station though. Personally, I really liked it but my partner was not interested. It was too dark apparently. I completely disagreed but wasn't about to argue (much).
The second property was just over what I wanted to pay but was absolutely lovely. Really nice kitchen diner and the rest of the house was well done and spacious. Again, my lovely partner was not impressed. She said the area looked run down but it definitely didn't. I am suspicious she has become a postcode snob.
We booked in a viewing of another property (in a nicer post code) for Monday.
The viewing started with disaster as the estate agent was not there to let us in and show us around the property. I called them and was told they would get back to me in 5mins. 15minutes of nothing but our screaming baby boy we decided to leave. As we did, the owner showed up and we politely asked if we could to look around his house and he was happy to show us.
The house was a four bedroom semi-detached property with off street parking, an average sized garden, a downstairs shower room as well as upstairs bathroom. This property has been on the market for five months, its pictures on Zoopla were awful and seeing as the agent was clearly disorganised I felt a deal could be done. Time to make an offer...
Called the estate agent about the previous evening and complained about the lack of organisation. As I approached the end of my complaint I turned the mood around with making an offer. Learning from other properties in the area whilst taking into account the tiny amount of interest the vendor must have had due to his agent and terrible photos I offered £10k less than the asking with an offer of £290k at 11.20am. At 1pm my offer was accepted and I'd saved us £10k! Time to get a solicitor...
I got several quotes for conveyancing solicitors on line and one from the solicitors recommended by the estate agent selling the property. I found a solicitors using the cheap conveyancing quotes website to be the best priced which were almost £800 cheaper than the most pricey solicitors, which were the ones referred by the estate agent. I made sure I read a few reviews of the solicitors and instructed them.
Called the estate agent to tell them the details of my solicitors and asked them to take the property of the market ASAP, including taking it off of Zoopla and Rightmove. They had it down by next morning when I checked.
Hour long meeting with my mortgage broker to go through an affordability check. We discussed all of my incomings and outgoings in detail as I had to prove my finances. It seems quite detailed and fussy than arranging my first mortgage. Maybe this is a sign of a restricted mortgage market or that I am now self employed.
Decided to chance the solicitors since it had been almost a week since I had instructed them and managed to secure several documents and details about the process via email.
Sent in forms to solicitors as well as make the payment of £200 for local searches. Discovered the estate agent had not sent my solicitors the memorandum of sale which they need to proceed with contacting the seller's solicitors so had to chase up the estate agent.
Popped in to the mortgage broker's to get the mortgages formally applied for. Received the hard sell of various insurances I either don't need or are grossly overpriced.
Standard valuation completed on the property just one week after applying for the mortgage. Very quick from what I'm told.
Got a call from an estate agent I haven't heard from in a while. Guess what? The elderly lady's house sell fell through and he was wondering if I was still interested. "HA HA HA HA HA HA HA HA!! I TOLD YOU TO BET ON ME! BUT YOU DIDN'T AND NOW YOU'VE COME CRAWLING BACK!!" is what I felt like saying. Instead I politely informed him that I am happy with my current purchase so thanks but no thanks. I'm not angry, I just feel a huge sense of triumph.
Yes, two week later and not a lot of progress! A few non-events have happened which illustrate how much solicitors and mortgage lenders can slow purchases down. Firstly I called my solicitor last week who couldn't find my file (a bit worrying!), he said he'd call me back when he found it. After three days I called him, he said he was waiting to hear from the vendor's solicitor so I suggested he make the first move and call the vendor's solicitor. What a novel idea.
As for mortgage news, the property passed their valuation so that's good news although they need further proof of my finances before we can proceed.
After lots of chasing up during the week I finally got a call back from the Estate Agent on Saturday. He said he had spoken to the vendor and unfortunately he no longer wants to sell his home. Something happened with his work and he no longer wants to down size so that's that. Gutting.
Trying to keep our spirits up we start looking at houses again. We saw quite a small terrace house this time which wasn't particularly inspiring. I thought it was okay but my partner disagreed - too small apparently.
Today we booked up to see 3 houses but one fell through before we got to see it. Strange times. One of the remaining two houses though was lovely. It was a 4 bedroom semi detached house with a good sized garden and withing easy walking distance of the train station. Since things move so quickly at present we decided to march over to the estate agents straight away that day and put in an offer.
I received a call whilst driving that the owner wanted £5k more, we said okay and the offer was accepted. Unfortunately the seller is in a chain so we will have to wait until she finds a new place and we have no idea how long that will take.
I called the estate agent today to chase up and apparently the lady is trying really hard to find a new home so that sounds encouraging.
A call from the estate agents to say the lady has found a house and had an offer accepted and the chain is now complete although it involves 4 parties (including ourselves).
[Got fairly downhearted and stopped making notes for around 2 months!]
Received the itinerary, local searches, mortgage deed and contract to sign to commit to a completion date of Tuesday 22nd October 2013. Is this really happening?
A call from the estate agent called to say the lady at the top has a few questions raised by her solicitor so will not make the exchange today and so we are aiming to exchange by this Friday in the hope to complete Friday 25th October.
Today is the last day we can exchange to make a completion date of 25th October and not a lot has happened so will now have to try for a new completion date on Monday.
Today, we finally exchanged and so have bought our new family home. We are agreed to be complete and therefore be able to collect the keys on Friday 1st November 2013!
Have I done anything wrong so far? Would you have done something differently? Did think go differently in you house purchase? Any tips or predictions for the rest of my journey? Do you have a guess of when I will exchange contracts?