Owning your own home

Question for the Scots, are the estate agents legally bound by the sealed bids system ie. the highest bidder gets it for that price? In London it's used to create a frenzy and then extort a bit more from competing bidders. I got chatting to a developer the other day who 'won' a house for £1.2m but by the end of the day spent £1.7m to secure it. Daft bastard.

My understanding;

Nope, its the seller's choice to accept any offer (or none) anf it doesn't have to be the highest one. Once accepted that's that unless the offer is conditional on something e.g. further survey.

But can the seller ask for more once all bids have been made?

I'd like to see a system where 'Best and final' offers actually means something other than the start of a bidding war.

its the seller's choice to accept any offer (or none) anf it doesn't have to be the highest one. Once accepted that's that unless the offer is conditional on something e.g. further

In my experience (of buyin 1 house in scotland), once the bids are in, that is it! No comeback, and no chance of getting gazumped! Once a bid is accepted it is usually a dead cert that you won't be outbid at that point! As you say, Best and Final actually does mean Best and Final!

My sister sold her flat to a couple who offered less than someone who she was fairly sure was a BTL landlord.

I think had there been more than £250 in it, she might have been swayed to take the better offer.

I'm not suggesting she deserves a sainthood but the vendor can choose who they sell to.

BTL Landlord's are cheeky fuckers though - most of them will be they'll say they can pay in cash and then when it comes down to it, they generally have to finance things.

I'm upfront about things: I explain carefully to the agent that I'm financed and my solicitors are ready to go. It pays to have a decent with your solicitor (I use one that my family have used for years and my accountant costs me a boozy lunch twice a year), so I can make a call pretty much anytime to start the ball rolling.

Currently looking at neglected studios and tiny 1 beds in Marylebone/Fitzrovia.

Exchanging Wednesday, completing Friday...assuming everything goes to plan. The four months since having our offer accepted has felt like a year!

Oooh! Solar panels on the gable end generate c.£800 a year income to offset against elec bill. And the energy efficiency rating is a B. I'm liking this new build shiz.

@tonylast good luck mate.

We've put in a load of offers around asking price but keep getting outbid.

Yesterday some old friends who are looking in the same area got in touch having had an offer accepted. They had a third person who was going to go in on the house but has pulled out. They've asked if we want to take her place.

The house is awesome. Much nicer than we could afford on our own but what are the pitfalls of being tenants in common? If we want to get our own place in a few years and we want to re-mortgage and buy as the four of us, using the equity of the first house, is this possible?

Will this leave us in a weak position if we leave with only the value of half a house?

Three weeks to D-Day on my building project, which hinges on making a new doorway between my flat and my garage, and the freeholders have decided to decline the licence to alter.
It is apparently beyond the wit of mankind to stick a door between the two properties because the flat is leasehold and the garage is a freehold owned by me.
I even offered to give them the garage in return for a new leasehold covering the whole thing.
Looks like I'm going to have to sue them for refusing to allow reasonable development, but it means that I'm probably going to lose my window with the builders, unless I just start work and hope nobody notices...

Looking at lovely flats in manchester, 5-10 mins from the city centre, all of which I can afford now, not in 5 years time is killing me

Where abouts are you looking?

Its grim up north...honest!

As a pure mancunian, I am ok with this.

@Prole. basically all over the city centre 'area' to salford/beginning of oldham rd

Ms Hammer has been quoted £475 labour to screed and tile 2.6m of floor. It's an awkward shape (a wonky C) but I feel the guy might be taking the piss, seeing as he threw in a 'so what do you want to do about materials' after estimating the quote, which I would have thought would at least include adhesive, grout and spacers. Any thoughts?

Get another quote?

Pitfalls are as follows:

More limited range of lenders to lend against 4 applicants on a mortgage (but if they lend to 3, they should lend to 4, so this may already be sorted)

If you want to move and the others do not, then that's a bit complicated. You would need to sell your share to the others, or sell to a new person to go on the property and mortgage via a transfer of equity with everyone (including the mortgage lender's blessing)

Should you want to move later with all 4 of you, and rent out the existing then you can potentially remortgage the current property, raise equity (you would need to leave approx 25% equity, for a BTL lender's requirements) and purchase another.
It's possible you can raise more against the property as a second home if you are not renting the property out, in which case your income needs to be able to support both mortgages.

You would be subject to the new 3% second home additional stamp duty if you bought a new home and stayed owner of another, whether rented or not.

Having said all that, leaving with half a house is better than no house, and if the arrangement works for you, and you know the other owners well, it can allow you to live somewhere that you could otherwise not afford. Also if it is in an area of strong growth, and prices have increased substantially, then you would benefit from a proportion of this.

As the original idea was 3 people, are they wanting you to have a 1/3 share or 1/2 share? Often this is determined by the amounts of deposit that everyone puts down.

Good advice.also worth remembering that property prices can go down as well as up. So you may end up in a situation where you have negative equity and will, probably, want to sit tight for a few years.

I bought a house with a friend back in 2001. It was convenient for both of us and always going to be a 2-3 year deal, but it worked out well. With the benefit of hindsight I should've bought her share, but we decided to sell up as she moved out of London.

Also make sure that you have a common / agreed position on home improvements / DIY / buying expensive fridges etc.

Depending on your mortgage requirements you may find the lender effectively ignores the one or two lowest incomes, so in effect as a group you can't borrow more. This happened to some friends recently.

I would 100% recommend drawing up a contract to cover what the exit plan is and as many eventualities as possible.

One of the key advantages to doing this is you all discuss, understand and agree what outcome you are happy with collectively. And more to the point it's agreed now while you like each other.

Things to think about:

• minimum collective holding time (probably with a default position to sell at that point unless extended)
  
• maximum collective holding time (be realistic - use the difference between this and the minimum to set sales hurdles)
  
• equity splits in the property based on deposit and mortgage payments.
  
• valuation method.
  
• decision making (could be there be a deadlock? How will this be broken? Is there a deciding vote? - you could always use something totally impartial like a random number generator and a rule).
  
• event of a default.
  

We've got an approved mortgage, but things are taking a while. I'm also trying to save quite hard anyway.

The only "savings" accounts I have are now old and shit. I want to open a higher interest bank account but I'm nervous about opening accounts before purchase.

Am I being paranoid or could this have an effect?

Money is money, doesn't matter where it is saved, no?

I have a santander 123 account. Can get 3% interest up to 20k

@skinny Mossack Fonseca have some cracking deals

expect @hugo7 was referring to the credit checks that a bank will do when you open a new account. Too many checks can look bad when you're applying for a mortgage.

I'd think that if you're close to arranging a mortgage then unless the interest is significant then it might be worth just sticking with what you have until the house purchase is sorted.

going from 1.5% to 3% on 20k for example would be £300 a year difference. Nice, but at £25 a month it might not be worth the bother if you're mid purchase. Especially when you then get questions from the bank asking why you've transferred money recently, and can they have the paper trail for the last x years etc.

Yeah, they'll only use 2 incomes with the mortgages we're applying for. But we're not borrowing to the highest levels we can and, between the four of us, the repayments are so low that we'll be able to save a lot towards the next place.

Agreed on all the bullet points. We need to sit down with a solicitor.

All the info is with the mortgage broker. Looks like we're going ahead. There's a double garage and, as three of us are musicians, it's going to get converted into a studio (rehearsal rather than recording) and bike workshop. I may have to start a current project thread. Getting ahead of myself now. Squeaky bums all round.