Buying a property is something that is a commonplace occurrence and most of us will experience the process during our lives.
Despite this, there are still many commonly misunderstood elements involved in buying property in England and Wales. Here we look at some of the most common myths – and how to better understand your position when buying a property.
The property’s asking price is the price you will pay
This is rarely the case in England and Wales! A house might be advertised as ‘offers over’, ‘guide price’ or ‘OIRO’ (offers in the region of) and how much it sells for will ultimately come down to what the vendor is willing to accept.
Where a property is in particularly high demand, the vendor may set a closing date to find their best offer – known as ‘best and final’ offers. In this situation, a house will often receive multiple bids, and is likely to sell for over the asking price.
In Scotland, the process differs slightly and if a property is advertised as ‘fixed price’, it means that it will be sold to the first person to offer that price.
Even after you have agreed a price with a vendor, this may not be the final price that you pay. Until the legal processes have been completed, there is always a chance that someone will offer more for the property and you may be ‘gazumped’. Alternatively, you may have a survey undertaken on the property and find that it has multiple issues that you were unaware of. In these circumstances, you may be able to negotiate a ‘discount’ on the price with the vendor.
You don’t need a full property survey
If you are buying a property with money from a mortgage, the lender will almost always insist that a Valuation Report is undertaken. The buyer will usually have to pay for this. This Valuation Report can be mistaken for a property survey – when in fact, it is merely a way for the lender to verify they are making a sound lending decision and the property is worth the price that has been agreed.
A property survey – such as a RICS Home Survey Report or a Building Survey Report – is in fact entirely different. It involves a visit from a Chartered Surveyor to assess the condition of the property, resulting in a detailed report on any defects that may be present. Without having their own, separate survey report, buyers can be walking into a purchase without any knowledge of the issues that a property may have. The knowledge provided by a survey report can save a lot of time, stress and disappointment in the long run.
Buying a property in need of renovation is a good investment
Whilst buying a property that needs work undertaking on it can sometimes represent a good opportunity, this is not always the case. Depending on the nature of the defects or issues in a property, along with how severe these are, the cost of works involved to bring the house up to a good standard can actually outweigh any ‘discount’ that may have been applied.
In order to assess the extent of the disrepair a property holds, it is essential to seek a professional opinion. A Chartered Surveyor’s report is an excellent place to start as this will provide a breakdown of all the issues that are present in a property and a description of their severity. Some defects may warrant further investigation – such as a specific defect report – that will be able to provide further information and an idea of costs to undertake works.
When weighing up whether a property purchase is a good investment, you need to consider the purpose of the purchase – ie. is it for your home that you will need to live in, or is it a potential rental property or second home? You should also think about whether you hope for a quick turnaround and re-sale or if you plan to hold onto the property for a number of years.
For more information on buying a property or to speak to us about any of our residential valuation or survey reports, please get in touch. our team are happy to advise on the most appropriate report for your circumstances.