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The other part of
the answer is more serious. Are you absolutely sure that the agent played
no role in the sale and might be entitled to claim a fee? Look at your written
or verbal contract with the agent. Most agents stipulate in their contracts
that "in the event of the company being responsible for introducing a buyer
who proceeds to completion either directly or indirectly." Could your private
buyer have seen it in the paper or seen a for sale board or be registered
with the estate agent and actually received sale particulars and perhaps
not been completely frank with you? Are you being fair to the agent? Again
this is up to your conscience! Be careful and don’t spend the agent’s
fee on a Caribbean holiday until you are completely sure that there will
not be a claim. Perhaps you may negotiate a split fee with the agent. Good
luck.
Q. If you get a solicitor or a licensed conveyancer to handle this for you, can they be held legally responsible if they fail to process your business properly. A. I have read what you say about it being OK to do it yourself and I wonder how easy it would be for a reasonably intelligent person with plenty of time to spare.
It is a sad fact
that house owners doing their own conveyancing are rare. This is a pity because
in theory you are quite right that it isn’t rocket science, however
it is beyond the wit and patience of most house sellers and buyers. If I
was buying a house I would want to use a solicitor simply because I would
worry that if I made a mistake through inexperience or lack of diligence
then I would have to bear a huge potential financial loss. Solicitors can
be held responsible and must have professional Indemnity insurance in case
of negligence claims. This should offer you protection enough. If you are
selling a house there is perhaps less risk in doing it your self, however
I would consider the work involved and therefore the financial savings to
be far less.
Q. I viewed a house in Somerset last week, which the agent told me I would like. When I arrived, it was 50 yards from a busy main road, which was not clear from the photograph on the sales blurb and three of the four bedrooms were tiny. I feel very angry that I travelled 150 miles just to see a property that was so unsuitable. I feel that it’s the agent’s fault. Can I get some compensation from them for my time and expense? A. Isn’t Somerset wonderful! I hope you enjoyed the drive down. I went to school in Taunton. I am digressing. You have just learned a valuable lesson. The lesson is that you should check the information, before going so far, more carefully. Personally I would have got together at least another three properties to see as well and then perhaps that one would not have been so preoccupying. Estate Agents are paid by the owners of property to sell them and not by buyers to buy them. That said they do have a duty to describe the property accurately and not to mislead buyers. There is a lovely piece of criminal legislation, which has brought turmoil to Estate Agency offices across the land since 1991 called The Property Misdescription Act. Subsequently many Estate Agents have found them selves in Court charged with taking photos of the wrong flats, putting garages into sales details where none existed and saying houses were double glazed when there was perhaps one small window in the whole house which wasn’t. Indeed some buyers even tried to blackmail estate agents into paying substantial out of court compensation where they had found errors in details in return for not pursuing a criminal case.
In your case omitting
the fact that the road was there would not in itself be wrong. If the agents
said that the garden was a quiet peaceful haven and all that you could hear
was the birds tweeting in the bushes then that would be a misdescription
under the Act. On the subject of room sizes it could well be that the rooms
were incorrectly measured by the agent and in my current experience this
is far more of a problem which agents should know enough to avoid. There
are two main areas where agents go wrong; one is measuring rooms with sloped
ceilings at floor level and another is measuring rooms into recesses where
there are massive fireplaces which take up more than two thirds of the wall
length. At the end of the day though "Caveat Emptor" ( Buyer beware) applies!
Sorry!
Q. Why can’t I save agents fees and sell my house myself? I know my house will sell quickly and resent parting with £8,107.50 including VAT for a job I know I could do myself. Why don’t more people think like me? A. Why do bank robbers rob banks? Because that’s where the money is! So your estate agent is charging you 2% plus VAT on a house sale at £345,000. Well that seems like a lot. It is a lot. Estate Agents are the property market place! (at the moment) Buyers go to estate agents to buy houses. The alternative is to put it in your local free ad or something or get the home made "for sale board" out on the front lawn or have a bumper car boot sale!
My stock response
to house sellers who were going to sell their property themselves was usually
" Well if you know your house will sell quickly then why don’t you ask
more money so it doesn’t." Otherwise I agree with you, there is no point
in instructing an agent to sell it. The only way that you could know that
the selling fee would be exactly that amount is because you or an estate
agent has pre-programmed a selling price into your head. My suggestion is
add another £15,000 to the price alternatively you could try one of
the discount brokers on the web.
Q. I am looking for a house and feel like a third class citizen when I visit an estate agent? The comments I get are "Well if you had just been here earlier" and "Property is really moving very quickly here in North Finchley and we only put you on the mailing list if you have sold your own property" and other confidence building comment. A. Estate Agents are acting for and paid by the seller. This means that they can seem dismissive of buyers who are not always very understanding when faced with "brusqueness". When after all you are a customer who wants to pay a lot of money for something they are selling it can seem a bit strange and un-welcoming. A good agent will always make a buyer welcome, as a good agent understands that a buyer is usually also a seller. As a specialist home search agent buying property for private clients all the time it still seems naïve to me that some agents get on their high horse when dealing with buyers (not me as I will not stand for it). It is not in their interests to deter buyers from embarking on the process by taking extraordinary steps to elaborate on how difficult the market is. Do not stand for it, the market is not that bad- otherwise COMPLAIN!.
Q. What exactly is Stamp Duty and who gets it? A. Stamp duty is payable by the buyer through solicitors upon completion as a way of raising money for the government based on the purchase price of the property, which you may be buying and charged at the following rates: - Current Stamp Duty rates Property valued at up to £60,000 NO STAMP DUTY (lots of voters here!) Property valued at £60,000-£250,000 1% (Gently, Gently) Property valued at £250,000-£500,000 3% (up a full one percent since 1998!)
Property valued at
£500,000+ 4% (Serves you right for buying such a big house , you probably
won’t vote Labour
anyway!)
Q. I have just had my surveyor’s report on a house that I am buying and it has been valued it at a lot less than I am paying. Does the owner have to reduce the price to sell the house to me? Should I pull out of the purchase? A. This depends on several factors, not the least being the surveyors reason for the down valuation. If the surveyor is saying that the property is simply overpriced when compared to comparable properties in the area, then he will have obtained evidence from local sources to support his assertion which you should be able to see. If however he feels that there are structural or decorative reasons for the valuation or a combination of both then your position is more complex. In both cases the first step would be to look at his report and speak to him or her. In the case of the under-valuation: you could try and get your own evidence by talking to local agents and obtaining from them paper proof that the property is or isn’t worth what you are paying. You could then try to persuade the surveyor to change his or her mind. In the case of a physical problem with the property you should engage contractors to inspect the property on your behalf to establish the cost of remedial work. You should also take the advice of the surveyor, which may be to walk away.
It is always advisable
to have a survey carried out by a surveyor appointed and paid for by you.
This way you have a right to claim against the surveyor or their insurers
if they are negligent. You should always be aware that a survey that is paid
for by you but carried out for the lending institution from which you are
borrowing has no real legal responsibility to you. A straightforward building
society or bank valuation is normally not enough!
Q. I am lucky to have some money from my fathers will and am considering the buy to let property investment market. In your opinion, is this a sound investment?
A. The buy
to let market has become overheated in areas with the consequence that there
were too many properties on the market to rent and not enough demand from
tenants. For example this was very true of Notting Hill and Holland Park
towards the end of 1999. Advice cannot be given in the context of this Q
and A session, but generally, buy cheap because if it does not rent quickly
you may need to sell it quickly. Secondly, do not think that it is sufficient
for the rent to cover the mortgage payments, as the equity in the property
is as important. Lastly buy a cheap property, as rental yields tend to be
better in general percentage terms.
Q. What will be the effect of the current decline in Technology shares on the housing market?
A. Tech shares
are up and down at present. At the end of the day the most important influence
on the property market has been and will probably continue to be Inflation
and interest rates. People so easily forget those dark days of the early
1990’s when interest rates went up and the market collapsed. However
remember that the property market is cyclical and for those of us in it for
the long term it produces some good gains.
Q. Do solicitors drag out the conveyancing process to get more money?
A. This seems
like a comment from somebody who has had a difficult sale or purchase! A
lot of solicitors are proactive and chase their clients sales very hard,
however with the best will in the world and a long chain with several buyers
and sellers, getting the timing right is often difficult. Remember to use
your estate agent to chase the sale along and talk to those involved up and
down the chain. This way you can help your solicitor get to the parts that
could not otherwise be reached!
Q. I am moving to the UK for a six-month (or more) sicondment for a Japanese Bank based in London. I may be staying for longer than six months. Should I buy a house or rent one?
A. If you
feel you know the market well enough, then do not be afraid and go for it.
Try and buy something modern and freehold and not a old property in need
of work or a flat with a complicated or dodgy or short lease. Property rental
is safe as you can walk away at the end and it is hassle free.
Q. I am probably going to sell my house in the Summer. I have been reading about these sellers information packs which we now have to prepare before you sell a house. What do they cost and how do they work? The "pack" consists of:- Title documents, answers to standard pre-contract enquiries, replies to search enquiries, planning and building regulation consents, warranties and guarantees, draft sale agreement, a surveyors report on the condition of the home containing an energy efficiency estimate, This will be graded from 1 to 4 ; 1 being no problem / 4 meaning deal with urgently! Each aspect of the property will be graded by this criteria. In the case of a leasehold property; the details of the lease length service charges etc Insurance and management charges The first sale happened a while ago and went through in three weeks as opposed to the average eight at present. The main bone of contention seems to be who pays, and the onus is now placed on the seller which is where the house move process is initiated and perhaps this may have a negative effect on numbers of marketeers.
The short answer
in my humble opinion is that it doesn’t work very well. The problem
is that the seller has to pay up front quite a substantial cost, and this
will I think deter not just time wasters from marketing their property, but
ordinary sellers as well. Luckily it is at present just a small trial in
the Bristol area of GB and a long way from approval. My advice is do not
trouble yourself with it at present, there are a lot of people in the Industry
who are currently having their say against it.
Q. My fiance and I have decided, in light of the increasing rises in property prices, to buy something that is quite run down/derelict and renovate at our own pace. Unfortunately, there is no easy way of finding houses that are currently empty except for driving around and if we find something, contacting the Land Registry. Even this doesn't work all the time as not all properties are listed. I just wondered if you could give any advice on how to go about buying a property like this, or if it is possible for you to get properties of this nature listed on your web pages? A. Fundamentally you are probably generally adopting the right approach. There is no actual list of run down properties, that I am aware of except perhaps auction catalogues and probably walking around the area is the best way of tackling the search problem. You can make this into quite a fun thing to do, particularly with a bit of planning in advance.
Some
advice:- Step two: Cross off the map roads which are unsuitable; perhaps because you know they do not have old houses on them or because they are too far from shops etc.. Step Three: Plan a route which takes you as economically as possible through the shortlisted roads and drive to the first road. Step Four: Park the car. (You will see ten times more by walking!) Step Five: WALK the suitable roads taking note of properties which may be suitable. Step Six: If you see an empty property, knock on the neighbours door and ask about it. Step Seven: Stop in to the local pub for a refreshing drink and a chat to the landlord and regulars about the area and property for sale. Step Eight: Go to the local council planning office and ask to see the planning applications for the properties that you are interested in. You are entitled to look at these, but make an appointment first. You can ask to see the planning history of any property. If it is an old property there will almost certainly be records of extensions or other changes. This will tell you a great deal about individual properties, and can reveal useful information such as corespondence from the owner or the owners agents or architects to the planning authorities which may assist you in tracking down an absent owner.
Step Nine: Try calling
on the local solicitors in the area who may be dealing with the estate of
the owner of a subject property, or who will be able to advise you of the
estate agent who will be (is) handling the sale. It may be less useful to
go to the land registry in the first instance, so try the other options
first.
Q:We have been trying to move house since September, the chains keep falling apart on us. We are desperately hoping to be successful this time. We had an offer accepted on a house in April, we were due to exchange last week when the person at the bottom of the chain (our buyers' buyers) pulled out. Now we are trying to find new buyers in a hurry rather than wait for our current ones to find a new buyer. Our vendor is getting impatient and is thinking about putting the house back on the market. We really don't want him to do this but short of taking out a bridging loan to secure the property (which we have been warned against) is there any other way we can keep him sweet. We were wondering if we could pay him a sum of money each week he waits for us and then take this off the final amount paid for the house. Is this possible? Do you have any other suggestions for us? Please help us to make this move. A: The tone of your e mail is extremely desperate and therefore the ideal situation would be for you to remove the pressure from your self and understand and accept that actually houses are like buses, there will always be another one along in a minute. Difficult to do in practice, but try. I feel very sympathetic to you and would suggest as follows:- FORGET BRIDGING. FORGET PAYING MONEY EVERY WEEK to the vendor The good news at present seems to be that the property is presently off the market. You should therefore concentrate on selling your property and are absolutely right to be fully re-marketing it. Talk to your estate agent and ask them how you can help them help you to get a buyer quickly. Consider reducing the price if you can. Consider instructing another agent, taking care to check the terms of contract with the existing agent. Is there an agent involved or are you dealing direct with the seller? Make an appointment to see the seller and tell him face to face what you are doing to get things moving. Let your estate agent tell him as well.
Q: I read one of your responses that includes details about the Property Mis-description Act and I wondered if that Act applies to my situation. Basically I was sent details of a flat I liked and went to view it. I loved it so put in an offer - at no time up to this time did the property details mention the length of the lease and I had to ask the agent after putting in the offer how long the lease was - it turned out to be 73 years - which is short and a potential investment risk to myself unless I pay to get it extended. I felt at the time that they had deliberately concealed the length of the lease from me - by not showing it on the full property details and by not volunteering the information (I had to ask). I feel they tried to take advantage of the fact I was a first time buyer and it was not until a solicitor (whom I had phoned to get a quote for conveyancing) said that the lease was short and I needed to extend it did I realise there was a problem. At this stage I went back to agent who brushed my concerns aside and said it was a matter for the solicitors and I could sort it out later. I was concerned they had not taken the length of leases in consideration when valuing the property - these concerns were again brushed aside and the agent tried to tell me they only value bricks and mortar. He also had the gall to tell me that a short lease was just like buying a house with a tumbledown garage - how god knows as at least I would have seen the tumbledown garage instead of it being concealed from me like the lease it. What do you think? Am I expecting too much from an agent or is this a case or mis-description and trying to take advantage of a novice first time buyer? A: Fundamentally from my non legal view point I do not think that the agents have committed an offence. The Act says that the agent has to mis-describe (in words spoken or in writing) the property and just withholding information does not on its own constitute a misleading statement. The agent presumably did not say the lease was 75 years long or that it as freehold (either of which could be a breach of the act). All they have done is not declare the actual length which I agree is shorter than some. HOWEVER, I agree with you that in the level of the market that they are in they could have done more to establish the lease length not just to avoid your disappointment but to actually help them promote the property properly. After all, even with the short lease it could still be a cheap property if the freehold was available and cheap enough.
Q: I am currently in the process of buying a flat. It is situated close to a railway line. I instructed my solicitor to go ahead with the land searches and asked him to specifically check to see if any plans were being made to widen the railway line etc. My solicitor informed me that he was unable to do this as it was out of his remit. I was under the impression that this is what I am paying him for? He advised me to contact British Rail and ask them directly. Can you advise what I can expect from my solicitor when buying a house. I am a first time buyer. A: land search only applies to the particular area of land being purchased and therefore it could be your solicitor is referring to that. It should include, however, any railways within 250 metres of your flat, and will give you a contact number in Railtrack if the search brings up any plans to widen the track. I am somewhat surprised at your solicitors attitude to your legitimate request and would suggest you re-approach him or another partner in the firm. I would have thought he would be capable and willing to do it for you as it is in my non legal view, a perfectly relevant matter to your purchase. Q:I am buying a flat with my girlfriend which has 87 years left on the lease is this ok or should there be more, and how easy is it to buy the freehold? A: Every property is different and an 87 year long lease is normally ok. However this does much depend upon the particular flat in question and you should seek the specific advice of your solicitor. More and more properties are sold with a "share of the freehold" which effectively means that the owners of the flats in the block have bought the freehold of the building and have a share in it (usually split equally amongst the tenants and held in a company registered for the purpose of managing the block) The process by which a freehold is acquired or not depends on the particular case and other factors such as how many tenants are willing to purchase and certainly I would seek legal advice about the likely cost of doing so before proceeding with the purchase at all. Q:I am swapping my home with somebody. My home is worth around £300,000 and the home I am moving to is worth around £280,000, so I will receive a £20,000 payment to reflect the difference in price of the two properties. What Stamp Duty will I, and the person I am exchanging homes with, have to pay? A: The following comments are based on that we have been give by the Inland Revenue Stamp Office, however, it should not be interpreted as advice. If you would like advice on this matter please contact either your solicitor, or the Stamp Office on 0845 603 0135. The official Inland Revenue line is that if two people are exchanging houses, and there is a 'meaningful' difference in price between the two properties, then the transaction is considered as one sale which is paid for part in cash and part in kind. A meaningful difference is typically, but not always, 10%. This means that the buyer of the more expensive house pays stamp duty at the normal rate, but the buyer of the lower price home pays only a 'conveyance not on sale' charge, which is currently £5. If the price difference is small, the transaction is considered to be two sales and both parties have to pay stamp duty at the normal rate on the market value of the property they are acquiring. In your case it is debatable whether the difference in the value of the two properties is meaningful. Your local Stamp Duty office (there are details of where these are located at http://www.inlandrevenue.gov.uk/so/so1.htm) will have decide. We have been told that different Stamp Duty Office may different definitions of what is 'meaningful'. One client of ours, who was told by his local office that his swap did not qualify to be a 'conveyance not on sale', spoke to another Stamp Office who told him that it would qualify, so he paid only £5. A more general example: Mr Moving-Down is moving from Pricier House to Cheaper House. Mr Moving-Up is moving from Cheaper House to Pricier House. Pricier House 'meaningfully' more valuable that Cheaper House Pricier house not 'meaningfully' more valuable than Cheaper House Mr Moving-Down pays £5 'conveyance not on sale' Stamp Duty based on market value of Cheaper House Mr Moving-Up pays Stamp Duty on market value of Pricier House Stamp Duty on market value of Pricier House This ruling on payment of Stamp Duty on an exchange was made following a couple of Court Cases (Simpson v Connolly [1953] 2 All ER 474 p477 & Connell Estate Agents v Begej [1993] 2 EGLR 35). Details can be found at http://www.inlandrevenue.gov.uk/bulletins/tb18.htm#stamp duty. Stamp Duty rates are currently: Market Value of property: Not more than £60,000 Nil More than £60,000, but not more than £250,000 1% More than £250,000, but not more than £500,000 3% More than £500,000 4% Your solicitor should be able to help with this sort of thing, but if you need further advice you can call the Stamp Duty help line on 0845 603 0135.
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If you have lots of furniture it's probably
best to go with a removal company rather than move yourself. When choosing
a removal company:
Q.
I have seen a house that I want to buy with an estate agent. I need to
sell my house before I buy and the seller’s agent is putting some pressure
on me to put my house with them for sale and take it off the market with
the agent I am already with. I do not want to lose the house they are selling
and feel that changing agents may clinch the deal, however I am very happy
with the service I am getting from my existing agent. What should I
do?
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