Do your homework:
Whilst buying a property can be stressful at the best of times, buying a repossessed property can be even more harrowing with the imposition of strict deadlines and the all too familiar possibility of being gazumped!
We all love a bargain, but buyers should be careful not to fall into the myth that all repossession properties are being sold at a knock down price. Even if the price tag is “too good to be true...” buyers should always be prudent and carry out research before making an offer. Your due diligence need not be expensive or be laborious; conducting a search of the web may give you an indication of prices of similar properties for sale advertised or even allow you to compare previous property sale prices by carrying out simple online valuations. These initial investigations coupled with a viewing of the property should give you a clearer indication of whether the property is a bargain or whether you’d need to be a DIY enthusiast with deep pockets, and the willingness to take on a challenge.
Making an offer:
Once you’ve done your homework (including working out your finances) you should not delay in making an offer. You must be mindful that the Bank is under a legal obligation and has a duty to obtain the best possible price - even if your offer is the first or only offer. Once your offer has been accepted it is usual for the Bank to impose strict deadlines, commonly a buyer will be given 28 days to exchange contracts. Once your offer has been accepted it is imperative that you instruct a Solicitor to act for you in your purchase. The sooner you instruct a Solicitor, the quicker searches can be put in hand and well ahead of the deadline to exchange. If you are taking out a mortgage it would also be wise to ask the Solicitor whether they are also on the panel for your mortgage lender. If they are not, it is likely a separate firm will act for your mortgage lender which is likely to cause delays in meeting that all important deadline. Buyers must always remember that speed really is of the essence. Whilst your offer may have been accepted, the Bank will never agree to take the property off the market. It is therefore important that you are aware that you could be gazumped at any time before contracts are exchanged, even if you have paid for searches and surveys.
Condition of the Property: Buyer beware
When purchasing a property in England and Wales the basic principle of “caveat emptor” (let the buyer beware) applies, whether your purchase is a repossession or not. In short, the onus is firmly placed on you the buyer to carry out all necessary inspections and surveys before buying. The seller is under no duty whatsoever to reveal any physical defects in the property, as it is your responsibility to discover them. There should be no delay in making your investigations as on exchange, you are deemed to have accepted the property in its present state and condition. Often repossession properties are in poor condition. Therefore, your investigations are even more important as the Bank is unable to provide any answers that a regular seller may be able to provide.
A prudent buyer should always have the property surveyed by a Chartered Surveyor (as opposed to a valuation) and have the services (eg. central heating, electrical wiring, plumbing etc.) inspected and, if need be, tested by an expert prior to the exchange of contracts. You should note, if you are having a mortgage, that a lender's valuation will be carried out for the lender's purposes only and not for you. If the lender's valuer has made a mistake, you will rarely be able to pursue an action against that person. In any case the lender's valuer is employed to consider whether the property is worth more than the amount to be lent on mortgage and not whether the property is worth what you propose to pay for it.
Completion and beyond
Once you have exchanged contracts, you are legally bound by contract to complete the deal. Usually, the Bank will require completion to take place within 7 days of exchange and it is therefore important to ensure the balance of monies required from you to complete the purchase are with your Solicitor in good time. It is also essential that upon exchange your home insurance is in force as under the terms of the contract it is likely that any ‘risk’ will pass to you the buyer. On completion, your Solicitor will transfer the purchase monies to the Bank’s Solicitor. Your Solicitor will call you to confirm completion after which the selling agents will release the keys to you. Once you have the keys to your new home, you will need to deal with any disconnected utilities and make the necessary arrangements to have the accounts transferred into your name. In addition, it would be sensible to change the locks and when doing so unscrew the letter box to allow the postman to deliver your post!
At ORJ Solicitors our conveyancing team have developed a great reputation in Stafford as well as across the country. We understand that moving home is a life changing experience for you and your family and we will advise you every step of the way. Every single home sale, home purchase and remortgage is different which is why our dedicated and approachable residential conveyancing team take the time to understand what you want. For a no obligation quotation tailored to your requirements please contact our conveyancing team on 01785 223440. For more about ORJ Solicitors and the conveyancing work carried out,please follow the link: www.orj.co.uk/residential-conveyancing.php
When it comes to buying a business, what responsibilities will a solicitor have? I ask because it sure reminds me about the plans that my uncle is thinking of doing. His business is a paper company and so far, he's been accompanying some managers of his into looking for a potential company like this to sell their business off to him.
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