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Oh the problems of old age - I thought that I had asked this previously.
I've been watching UK "Location etc. etc." and they make an offer, it is accepted, everyone is happy. Then we hear that the purchasers have found that there is more work needed than they thought so they are trying to negotiate the price down.
Here, the purchaser finds out any pitfalls before making an offer, and if the offer is accepted and signed for (PDQ with lawyers involved), then that is it - pay up or lose your 10% deposit.
Query - do your property contracts really have lots of escape clauses? Does the agent have to refund the commission? Are Mickey and Minnie still looking for the perfect hole?
This is all foreign to me. Seriously. Having been involved in the Real Estate business for a short while, I would like some clarification.
B
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It's usually slightly different.
The below is what happens in England and Wales. Scotland has a slightly different system.
The purchaser and vendor normally negotiate a price, the purchaser then possibly putting down a small refundable deposit to have the property taken off the market.
Solicitors, surveyors and mortgage providers do their thing. If anything untoward shows up, the purchaser could try to negotiate a reduce price or alternatively back out completely.
Once the legal formalities and money is in place, the purchaser submits a non-refundable 10% deposit which is held by the vendors solicitors and they 'Exchange' contracts.
As a Contract has been signed, it's highly unlikely that a price can be renegotiated at this stage as any problems would have been uncovered before this point.
At the Exchange, both parties agree a date when they will 'Complete' on which the balance is paid to the vendor and title passes to the purchaser.
The completion date could be anything from the same day (unusual) or 2-4 weeks later.
All legal and Estate agent bills are settled after {edit on the day) the purchase has been Completed. The Estate agents fees are based on the selling price, not the asking price.
Typically the whole proceedure takes 10-12 weeks although it can be quicker.
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hmmmmmmm
here one puts in an offer through the realtor to buy a house for a certain price, with contingency clauses, such as .........
contingent on passing inspection by a qualified housing inspector
contingent on buyer obtaining funding ---- getting a mortgage will include an appraisal of the property and often a survey of the property boundaries
contingent on seller removing xxxxx, yyyy, ccc etc
............ and anything else that crosses your mind.
There will be a date for the seller to accept this offer ............... often within 24 hours.
If accepted, a date is set by which the contingency clauses must be addressed one by one.
If any contingency clause fails, the offer can be (and usually is) legally withdrawn ...........
....... eg, the housing inspector finds mould, asbestos, new roof needed, or anything that has not been disclosed by the seller and their realtor
The housing inspector really pokes around ................. going into every area of the house, from basement up to the attic.
If every contingency passes, lawyers are involved in drawing up the final contract, with dates set for closure and hand over of keys, etc ...............
occupancy by the new owner is usually within 2-4 weeks of the final offer being submitted.
The buyer has to obtain insurance to cover the value of the mortgage, and pay for the transfer of the title of the property to him/her, as well as several other costs over ad above the price of the house.
I've probably missed out something that Bernie will spot!!
The market in the city where I live is definitely a seller's market .................... houses are getting many offers, and regularly selling for $200,000 or more over the asking price. A house across the street from me sold 3 weeks ago, after less than 2 weeks on the market ...................... for about $250,000 over asking. That's about £100,000
There are strong rumours that a house in a wealthier area sold for $2 million over the asking price ............... ie, for about $4 million.
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Thanks for that people.
Looks like we colonials didn't follow in 'mother's' footsteps.
B
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:-D
we certainly don't get the chains that used to occur in the UK ...................
don't know whether they still do??
I know that one friend of ours wanted to buy a house about 20 years ago.
He put in the offer, then put his house on the market, and on and on went the chain, until it was about 20 buyers long.
Buyer number 16 or 17 didn't get the mortgage he'd applied for, and the whole chain collapsed!
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If someone is borrowing the money from a finanancial institution, they will send in a surveyor to check that its worth the money they are lending. They won't go over it with a fine tooth comb - the purchase can choose to hire an independent survey if they so wish, but it's not compulsory. As I understand it, the vendor has to provide truthful answers to any questions, but if those questions aren't asked, they don't have to volunteer unfavourable information.
They will also be formally asked what fixtures and fittings they intend to leave. That is the built into the contract.
The purchasers solicitors undertake searches with the local authority - things like if planning permission had been applied/granted for any alterations made, are there plans for a new road or housing development close by.
One of ours is purchasing her first property. She handed the initial paper work to her solicitors a week ago. They only logged that they had received it 3 days ago. She's champing at the bit but unless pushed, they move in their own good time.
All this is done before the contract to purchase is signed and exchanged.
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Yes, there are still chains! Because of this, if 2 people put in similar offers, the vendor might prefer to accept a cash or first time buyer.
Daughter's vendors have already exchanged for their new home. The wife is due to give birth in the next few weeks and is anxious to move before she goes into labour! If they haven't been able to borrow from family, they've probably got a bridging (short term) loan.
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Thirty or so years ago it was commonplace for contracts to be exchanged four weeks before completion.
That practice appears to have changed and today it seems to be the norm for contracts to be exchanged the day before completion. This is a reall nuisance as most arrangments associated with a move require much more than 24 hours notice.
Worse still either party can pull out or delay matters without penalty to themselves - all very worrying.
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