MORE than a million households are expected to move home this year but without the right advice and preparation you could wind up making costly errors.
Samantha Partington spoke to experts, and those who’ve been through the process, to find out the expensive mistakes buyers and sellers make . . . and how to avoid them.
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‘Turned down for mortgage over an unpaid bill for £2’
IN a rush to move after the pandemic, Andi and Shaun Forsythe reserved a two-bed flat in a new-build development in Watford.
It was only when the couple spoke to their mortgage broker that they discovered a problem.
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Andi, a 34-year-old content marketing manager for ReallyMoving.com, said: “We were surprised when we found out my husband had a poor credit rating – we hadn’t checked beforehand.”
A £2 end-of-contract mobile bill from Vodafone that Shaun, a bike shop manager, says he never received had caused his credit rating to plummet and their mortgage to be declined.
Shaun, 37, repaid the debt and Vodafone added an explanation to his credit report which took a month to appear – but it was too late to buy the flat.
They have since bought another flat in nearby Bushey, Herts, where they now live with their one-year-old son Theo.
‘After highest bid fell through, we sold for £10k less’
JON and Jo Hart put their three-bedroom terrace in Worcester up for sale last October and it quickly attracted offers.
Jon, 37 and Jo, 28, accepted the highest bid which was £5,000 more than they had expected to achieve.
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They turned down an offer of £3,000 under the asking price from a cash buyer.
But project manager Jon says: “In November, the buyers weren’t replying to the estate agent, the valuation wasn’t booked in and they hadn’t paid an advance to the solicitor.”
When the buyers pulled out in January they had to put their home on the market again and accepted an offer of £10,000 less.
Jon says: “In hindsight, going with the highest offer was a mistake. We should have trusted our instincts and pulled out earlier because I don’t think they could afford it.”
Luckily, as they were buying their new home from family, their purchase didn’t fall through and their Nationwide mortgage got cheaper because rates fell.
BUYER BLUNDERS
LEAVING MORTGAGE TOO LATE
Failing to get an initial mortgage offer well ahead of your property search can often lead to disappointment, warns Nicholas Mendes, technical manager at broker John Charcol.
He says: “Speaking to a broker six months in advance gives you time to change bad habits, such as exceeding your overdraft limit or letting payments bounce.”
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A broker will apply to a lender for what’s called an Agreement in Principle.
Without this you won’t know which properties are in your budget and any offer you make won’t be taken seriously.
You can sign up to MoneySavingExpert.com’s Credit Club to check your credit score for free with Experian and get tips on how to improve it — for example, by getting your details on to the electoral roll.
GOING FOR THE CHEAPEST SURVEY
Relying on the valuation carried out by your lender instead of getting your own report is often a false economy.
Andrew Montlake, of broker Coreco, says: “Lender valuations aren’t done for the buyer’s benefit. They might not even send someone to visit the property.
“We recommend at least a homebuyer’s report, which may cost a few hundred pounds, but a surveyor will visit the property and check things like windows, fireplaces and quality of mains services.
“For some older properties a full structural report may be more appropriate.”
LACK OF LOCAL RESEARCH
Many buyers don’t do enough research before making an offer, says North London estate agent Jeremy Leaf.
It means they could pay too much or only find out about any serious downsides of a neighbourhood when it’s too late.
Search for sold prices online via Zoopla or Rightmove to make sure the asking price seems fair.
You can also check for the nearest train station and good schools in the area.
Find out about flood risk at gov.uk/check-long-term-flood-risk and search police.uk to look up crime rates by postcode.
The local authority website will tell you if any major work is planned for the area.
SELLER SLIP-UPS
PICKING THE WRONG AGENT
Sellers can be swayed by the estate agent who tells them their home is worth the highest amount. But it can be a tactic just to sign you up.
Paula Higgins, chief executive of HomeOwners Alliance says: “Ask to see details of other properties similar to yours that they’ve sold recently for a comparable price.
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“If they don’t have experience in your local area and don’t have past sales to back up the valuation, look at other options.”
The Find Estate Agent tool at hoa.org.uk/services/best-estate-agent looks for local agents with the highest success rate of achieving the asking price.
If your property has been on the market for several weeks with few viewings and no offers, consider switching.
BEING BLINDED BY THE HIGHEST BID
If there are several buyers interested in your home, it’s tempting to go for the highest bidder, but this can be an error.
You need to make sure they can genuinely afford it and consider their circumstances.
Mr Leaf said: “Ask to meet buyers in person to find out if they have a genuine desire to buy the property.
“If that isn’t possible, make sure your agent has checked full details of the mortgage offer, proof of deposit, whether they’re in a chain and their broker and solicitor’s details.”
If they are in a chain, that means they are relying on the sale of their home to buy yours and so there might be hold ups.
A buyer with a very small mortgage deposit might find their lender is more picky about the valuation of your property, so there’s also more risk of a deal falling through.
LEAVING PAPERWORK TO LAST MINUTE
Sales can fall through because of delays in the seller providing paperwork on the property or if the buyer’s solicitor spots an issue at the last minute.
Ms Higgins says: “Choose your solicitor as soon as you decide to list your home, and start pulling paperwork together.
“Flag up any potential issues now, rather than letting the buyer discover them further down the line.”
Buyers finding out problems at the eleventh hour are more likely to get spooked.
