Buying your first property is an incredibly exciting time…. But we can get caught up in the emotion and fail to do some essential homework!
Prior to viewing a Property
- Arrange a mortgage planning appointment to ensure there will be no issues gaining a mortgage and that your lending budget matches your plans. Sometimes what you consider affordable is above what a bank or building society is prepared to lend to you! Contact The Mortgage Clinic for Mortgages Belfast
- Research the neighbourhood, take a drive around, make sure that you will be happy living in the area, or that it is a suitable area to buy an investment property.
- Gather as much information from the Estate Agent as possible! The websites will tell you some really useful information. How long the property has been listed? If the property has been listed for quite a while, then I would be thinking… Why?... Is it overpriced?… Are there any potential issues with the property?
- Check the prices of similar properties in the area to get an idea of comparables and their prices.
- Have a look at the Energy Performance rating, this will give you an indication of typical energy costs for the property. For more information click here.
- Check with the local Council to see what the annual rateable value is so you have an idea of what the annual rates will cost
- Run a home insurance quote this will be a requirement for your mortgage to have the property adequately insured
Questions to ask before making a formal offer
- How long has the property been listed?
- Are there any bids on the property? How many interested parties?
- Have there ever been any bids?
- Has it ever been ‘sale agreed’ and fallen through? What were the issues?
- Does the seller have a price in mind that they would be happy with?
Once you are armed with the answers to the above questions then you are ready to make an offer.
Making an offer… Bidding… Now the fun starts!
I am frequently asked.. what price should I start the bidding?… Is the property worth the advertised value?… How can I buy this property below market value? The honest answer is that a property is worth exactly what a purchaser is prepared to pay for it! If you enter a bidding war then its likely the property is in high demand and you may need to pay more to end up as the highest bidder.
If there are no bids and you are considering making an offer then I refer you back to the questions you have asked and the research you have done previously. This should tell you where to start to make an offer! If the property has been on the market for a while, with no offers or interest then there may be a case to offer below the asking price, but before making the offer ask for guidance from the Estate agent.
Possible second negotiation?
As part of the buying process a survey & valuation will be done if you are a mortgage purchaser as part of your mortgage application. This can be a safety net if you are thinking you may be paying too much! An independent surveyor will provide a valuation of the property based upon market conditions, and sales completed in the area in the recent months.
It is possible for this valuation to come back lower than your agreed purchase price, meaning you have a decision to make.. go ahead at the agreed value.. or try to renegotiate the purchase price based on the valuation provided by the surveyor.