When you find your potential “dream property” it is very tempting to rush in and close a deal as quickly as possible. Some buyers have regretted rushing in so quickly with issues such as mortgage applications, credit scores, the neighbourhood, a lack of understanding of the area and potentially leaving themselves open to being gazumped. Buying a property can be challenging but do your homework and make it as easy as possible.
Buying a property – Mortgage in principle
While few if any lenders will offer you a mortgage without a suitable property in mind, you will be able to apply for a mortgage in principle (MIP). This is very important because it shows how much a company is willing to lend you to buy a property within an agreed timescale. In some ways this is as good as a cash purchase because the money is effectively there in principle waiting for the correct property. Sometimes the ability to act quickly when closing a deal can be attractive to the seller.
Check your credit score
Let’s be honest, how many of us have checked our credit score over the last year? How many of us have actually checked our credit score at any time? If you’re looking to apply for finance it is imperative that you check your credit score to see that everything is in order. Mistakes can be made on your credit file which can have a significant impact upon on not only your ability to borrow money but also the interest rate. If you are seen as a higher risk customer, because of an error on your credit file, this will be reflected in an increased interest rate. If possible you should boost your credit score prior to applying for a mortgage to give you the greatest flexibility.
Research the neighbourhood
Asking somebody about a neighbourhood is not the same as seeing things with your own eyes. This is why many people will spend a few hours simply parked outside the property of their choice to see what happens on a regular basis in the neighbourhood. They may also drive around the local shops, check out the local facilities and try to get an angle on the type of people who live in the area. When looking at buying a property (or selling) the neighbourhood can have a significant impact upon the eventual price.
Local transport links
While many people who buy their dream home plan to live there for the rest of their life, things don’t always go to plan. It is therefore useful to have an idea of the local transport links in case you were to move away from the area and perhaps look to sell/rent. Knowing your immediate catchment area can be a useful selling point especially if you are within commuting distance of significant employment hotspots. Just because you have a car does not necessarily mean all potential buyers will have their own transport so, do yourself a favour and check out the local transport links.
While gazumping is not an issue in Scotland under Scottish property regulations, it can be an issue across the rest of the UK. Many potential buyers will ask the seller to withdraw a property from the market if they make an offer. If you are adamant that withdrawal from the market is a condition of your offer then any serious seller would be amenable to this. If such an offer was turned down by the seller then this could give the impression they would be happy to have you gazumped, using your offer to extract a higher offer from elsewhere. In this instance you have to decide whether you are wasting your time and withdraw or risk the chances of being gazumped and any expenses you may have incurred putting your offer together.
Why make the challenges faced when buying a property any harder than they need to be!