Buyers Guide

The First Steps

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Buyers Guide – The First Steps

Getting your funding in place

Whether you are a first time buyer, investor or looking to move up the property ladder it is important that you first get your funding arranged.

Lenders (banks and building societies) will give you a mortgage in principle based on information you provide to them about salaries and expenditure. However, the lenders will only carry out a detailed review of your status once you have offered successfully on a property.

It is usual that you have a mortgage in principle in place at the start of your property search. The mortgage in principle usually gives you an idea of the maximum amount the lender will be willing to give you as a mortgage.

The legals fees and purchase costs
In addition the price you will need to budget for the legal fees, registration dues and any LBTT (Scottish Stamp Duty).

When you ask us to give you a quote of the purchase costs, these will be given and calculated on the budget price you give to us.

However, because some of the costs (the registration dues and the LBTT) are calculated by reference to the actual purchase price, those will need to be recalculated once you have offered successfully for a property. Also, if you own another property then you would also have to pay the Additional Dwelling Supplement (ADS) which is charged at 4% of the purchase price.

The Edinburgh Property Market – how it affects your funding
It is a sellers market at the moment. Properties coming onto the market are generally selling very quickly (coming under offer within a couple of weeks) and selling at prices which are well over the home report value.

Because of this, you are almost certainly going to have to offer for a property at a Closing Date and will need to offer over the home report value to stand a reasonable chance of your offer being successful.

That has an effect on your budget!
It is important to understand that your lender will offer you a mortgage based as a percentage of the home report value of the property not the price you offer and so for every £ you offer above the home report value that is an extra £ you will need to find from your savings.

Just as an example:

If you offer £110,000 for a property with a home report value of £100,000:
The mortgage is likely to be 90% of the value = £90,000
Your contribution to the price will be £20,000

So, you will need to bear this in mind.

Tips if you are working with a tight and limited budget

Although most properties are selling quickly and at prices well above their home report values, there are still some properties which get overlooked and it is those properties, which have been on the market for sale for a couple of months that you should look out for as you stand a better chance of offering successfully at around the home report value, although this cannot of course be guaranteed.

How do you find those properties?

The best way of finding those properties is to request the home report on the ESPC website. The date of the home report is usually the date of or near to the date of the start of marketing.

Also you can look for fixed price properties although these are not common in the current market.

Getting information about properties online

The vast majority of people start their property search online and, as already mentioned above, the most well-known property website in our area is the ESPC which is also where you will get the most information about properties and in particular you will be able to get a copy of the Home Report.

The Asking Price

The asking price you will most often see is “offers over”.

For these properties, the asking price of offers over is generally set at a few thousand Pounds below the Home Report Value. This does not mean that the sellers are looking for something between the asking price and the Home Report value.

It is simply there as an indication of the asking price and invariably the sellers will be looking to achieve a sale price in excess of the Home Report value.

So, always check the Home Report value and treat that as your starting point and expect to have to add to that.

The Home Report

Always request the Home Report.

The Home Report will give you the following useful information about the property:

The approximate date for the start of marketing
The value of the property
Whether there are any damp issues with the property
If the property is factored
If there are any major repairs required
The Energy Performance Rating (EPC)
If you request the Home Report through the ESPC you are likely to get a follow up email from the selling agents. This is just them doing their job for the sellers. There is no need for you to be put off by this or feel intimidated.

Keep the email as a useful reminder of the selling agents contact details or treat it as spam and delete it.

The choice is yours.

A bit more about extras…

We are sometimes asked if all the furniture is included. This is perhaps because first time buyers are more used to the rental market where flats come furnished or partly furnished.

However, when you are buying a property, the furniture is almost never included. What you can expect to be included are things like the carpets, fitted cupboards, light fittings and integrated kitchen appliances.

Sometimes other extras are included or offered separately at a price to be agreed.

Viewing Properties

Arranging a Viewing

Websites such as the ESPC will give you details of the viewing arrangements for a property and these will vary.

So, to explain a little more about arranging a viewing:

Open Viewing

Open viewings are usually Thursday evenings and/or Sunday afternoons. Where there is an open viewing, you do not need to contact the selling agent to arrange the viewing, you can simply turn up at the property at the open viewing times and you will be met and shown around the property by either the owners or their estate agent.

In the current market, there are likely to be many people turning up to open viewings and so it might be difficult for you to get a chance to ask questions.

Viewings by appointment

This is where you call the selling agent and arrange a specific day and time for your viewing. The advantage of this is that you will probably be the only buyers with that viewing slot so you can take your time and ask questions.

Viewing etiquette

We have found that increasing numbers of viewers now wish to take their own photos and sometimes even videos using their smart phones.

Always ask the owners or estate agent for permission if you wish to do this. As you will appreciate, not everyone will want to allow you to do this.

Follow up from Selling Agent

If you view a property, you are likely to get a follow up call or email from the selling agents.

Again they are simply doing their job and looking for your feedback about the viewing and the property.

What to do when you find a property you like

Either give us a call or email us with the details of the property.

Noting Interest

We shall then have a quick look at the property brochure and home report and also contact the selling agent to note your interest in the property and to ask if other buyers have also noted interest and if a closing date has been set.

Noting interest is simply us contacting the selling agent and explaining that you, our client, wishes to note interest. That way the selling agent can keep a record of buyers who are looking perhaps to make an offer.

Noting interest does not require the selling agent or the seller to advise you of any other offers received or give you the chance to make an offer once an offer from another buyer has been received and accepted. It also does not require the selling agent or seller to set a closing date.

However if there are three or more notes of interest in a property it is likely that a closing date will be set.

Reporting back to you

We shall then report back to you, usually by email, to update you and to suggest whether or not it would be worthwhile making a verbal offer at this stage or wait until a closing date has been set.

We shall also give you some indication of our view of what the sale price for that property is likely to be in the current property market.

Buying

For all things buying property related, see our BUYING page.

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