How to purchase your perfect home

I am told that the moment you cross the threshold you will know there and then property you are viewing is the one for you.   That sixth sense!

Allowing your heart to rule you head can however present a danger. 

As your solicitors we will be able to check and advise on the legal issues but will find it far more difficult to advise on the suitability of the property as a home. Nor will we be able to advise on issues relating to the state and condition of the property or on matters relating to the local environment and amenities.  It is therefore very important to do your homework and to make sure your solicitor is fully appraised of all relevant matters when if comes to providing instructions.  Remember that in most cases your solicitor will not have visited the property.

So here are some tips:

To begin with always visit the property at least once during the day and once in the evening.   The seller will normally wish to give you a ‘guided tour’. Resist this and ask if you can spend some time looking on your own.  Move the furniture around if you can, as it would not be the first time a seller has moved a sofa to hide a damp patch! Be extra cautious if the house has been recently painted as it could be masking serious problems.

Visit the house on a rainy day to check for leaky roofs, walls or ceilings.

When viewing a property, determine how busy the road is, and whether there is any disturbance from flight paths.

Take a look at the crime rate for the postcode by visiting www.crimerates.co.uk/

If the standard of local schools is of importance you can find the latest Ofsted inspection report rating here: www.locrating.com/

Ask why the seller is selling especially if the seller has only owned the property for a short time. Ask them about the neighbours. Look out for knowing glances, avoiding eye contact or mumbling when they answer. And remember that if vendors have made a formal complaint of any kind about a neighbour, it is illegal for them not to tell you

Take a look around the surrounding area and check out the local amenities.  Walk rather than drive, as you will see more. Look at whether the streets are clean and litter-free, whether there is graffiti sprayed around, and whether gangs are hanging about; also establish if there's noise or light pollution from nearby businesses or immediate area.

If public transport is important check the location of the local bus/train station and timings of buses/trains by visiting: www.transportdirect.info

If the seller is a smoker, the smell may end up lingering in the home. You may also have to pay a hefty sum to cover the cost of cleaning and repairing the smoke damage.

Similarly, you may want to think twice before signing up to a property if the people selling it are pet owners, as it may be extremely difficult to remove all traces of the smell of dogs, cats or other animals.

Ask the seller who is responsible for maintaining the boundaries and if there has been any disputes, talk to the neighbours and see what they say, look out for any unusual characteristics and make sure you let your solicitor know if there are any.

Check with the local planning department to see if there are planning applications in place that could if granted affect the value of the property and or your enjoyment of the property as a home.

Check your mobile phone reception and broadband speeds within the home. The following website shows some of slowest areas in the country: http://on-msn.com/VwkVWd

If you are buying a flat speak to the other tenants and if there is a Residents Association establish contact and inquire about the Managing Agents and Landlord to see if they can be relied upon and whether there have been any problems.

Ask the seller whether there has been any flooding, whether the seller has had to make any insurance claims, whether there has been any underpinning or problems with dry rot, rising damp and or beetle or other insect infestation.

Take a look at the heating/central heating, hot water heater, drainage and other major systems. These installations can be costly if they are left in disrepair for too long.

Turn the taps on in the kitchen, bathroom and laundry to check the water pressure, performance and drainage. Check for dirty water.

Are there major cracks in the walls or do the doors stick? This can be a sign of subsidence. This can be an extremely expensive problem to fix and is usually not covered by house insurance.

Measure spaces in kitchens and utility rooms to make sure your appliances such as refrigerators, washing machines, dishwashers and microwaves fit. Failure to fit could add to the cost  of buying in terms of replacements.

I always advise that despite how short of money you may be do not look to make a saving by dismissing the idea of a survey. However well you look and inspect you will not be able to see everything and by investing in a survey you will find out so much more about the property and those who commission a survey are able to negotiate a reduction in the purchase price of around £2000.

Compare home prices in your area to make sure you are paying no more than market value.

Negotiate on the price. If it is a buyers' market, you will be in a position to drive a hard bargain.

So as can be seen while you may think you've found your dream home, the key is to make sure you do your research to explore if there are any issues that might deter you from proceeding further. This means asking the right questions during your viewings, and looking for the all-important details.

Good luck!

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Read this before moving home

Moving house is ranked as one of the Top Ten most stressful experiences in life. 

Charlotte Ribbons, Trainee Solicitor with MJP Conveyancing  examines the ups and downs of moving home 

Moving house is ranked as one of the Top Ten most stressful experiences in life. Having moved house myself last weekend I can strongly agree that uprooting a life’s worth of possessions, daily debates with my partner over whether it is really necessary to take my childhood memoirs and having spent a week wading through boxes to find basic items I can vouch that a divorce may have been slightly less traumatic.

I believe the highlight of my day was loading my cherished super-king sized bed into the van, driving it all the way to our new home, spending a good hour manoeuvring it up and down the stairs in a vague attempt to make it fit, standing outside debating whether going through the window might work and then eventually with tears in my eyes admitting defeat, loading it back in the van and saying goodbye to it at the tip. I can safely say a little pre-planning may not have gone a miss.

So before picking up the key from the estate agent with the Cheshire Cat smile (which will remain on their face all the way to the bank!) you may want to digest the following.

Before moving day take the opportunity to have a spring clean. I can assure you, that beloved box of treasures which you cannot live without suddenly becomes less appealing when in your new home you realise there is simply no way one more box will fit in the cupboard.

At least one week before moving contact your gas, electricity, water, internet and telephone suppliers and make the necessary arrangements for your final account. Use this as your chance to shop around make the most of those cash-back deals your friends keep raving about.

Run down the freezer….yes this does mean it is totally acceptable to eat a whole tub of Ben & Jerry’s for breakfast, after all the Trade Associations advise against moving freezers in full or frozen state. Little tip, if you overlooked this getting a hair dryer on it will speed up the defrost time. Prop open the doors to avoid having to clean mould out later on, you do not want to add another cleaning job to the list.

Decide whether you need a professional moving firm or not. If you’re thinking of moving yourself, look into the costs involved. Several journeys over long distances can quickly add up, it may well be worth hiring the professionals. Not to mention saving your blood pressure hitting dangerous levels when your mirror slips out of your brother-in-law’s hands and smashes on the floor! Check with your home and contents insurer to see if you are covered during the move.

Your best-friend on this day will be the baby/dog sitter… tripping over the dog, hearing your child ask where the lego is for the tenth time and standing on Biro will have you crying blue murder.  If this is a luxury you cannot stretch to then make sure you keep some essential favourite toys at hand to set up a make shift playroom at the other end.

Hindsight has now taught me on my next move I shall pack a ‘survival kit’ consisting of tea bags, coffee, snacks, lightbulbs, screwdrivers, tape, hammer, cash, phone charger, toilet roll, chocolate and wine (believe me the last two are essential!).

Boxes - small ones for the heavy items, big ones for the lighter items. For pictures and mirrors select a box large enough to cover it, then instead of making the box up, keep it flat, seal one end with tape and slide the picture/mirror in and then seal the top. (Advice my brother-in-law did not follow!)

Before you rush off to your new home check your old property for any items left behind, and don’t forget outdoor plant pots. Take gas, water and electricity meter readings. This should be the first thing you do at your new house too. If your old property will not be re-inhabited turn off gas, electricity and water supplies as the mains. Check windows and doors are fastened securely.  

On arrival at your new home make sure all items, fixtures and fittings that were included in the sale are present and correct. If anything is missing contact your solicitor as soon as possible.

Get your mail redirected to your new address. Knocking on your on the door of your previous residence to ask for your NEXT catalogue is a little awkward. Also cancel deliveries of newspapers milk etc.

Before you snuggle down in front of the TV make sure you have notified TV Licensing of your new address as your TV license does not automatically transfer to your home. Risking prosecution and a fine of up to £1,000 is not the ideal moving in present.  (www.tvlicensing.co.uk)

It is a legal requirement to notify the DVLA of your new address. You will need to renew your driving licence and vehicle registration. Don’t forgot to update insurance providers, credit card, pensions, investments and loyalty cards. You will need to let your children’s schools know that you are moving. Do be aware that your children might have to change schools if you are moving out of the catchment area. 

This one maybe for the slightly over cautious but change the locks on your new home… you never know who might have a key!

Finally…take a deep breath, relax, and crack open the champagne. Believe me you will have earnt it!

Estate Agents commission monopoly under attack

In my last blog I discussed the increasing gulf between the fee of the solicitor and the commission charged by the estate agent, and posed the question whether at a time when the property market remains in turmoil this could be justified.  

At about the same time news broke of an announcement by the Department for Business, Innovations and Skills (BIS) of proposed amendments to the Estate Agents Act relating to web-based 'intermediaries'.  The changes if implemented will mean  the intermediary will no longer be  treated in the same way as an agent and will  make it easier for  sellers to advertise their home online direct to buyers.

The intermediaries, such as Tepilo, run by TV property guru Sarah Beeny,Sellmyhome.co.uk and HouseSimple allow property sellers to advertise their homes online for a fixed fee far below the commission charged by estate agents. The providers of these services do not perform any other role during the sales process yet the Estate Agents Act treats them as agents and requires them to perform the same checks on properties as agents. This has made it difficult for them to compete with the likes of Rightmove through which the majority of estate agents advertise property.

If the restrictions on these businesses are relaxed it is clear that the consumer will be presented with a wider choice and fees charged by agents may begin to tumble as competition increases.  The typical fee charged by an intermediary is around £450 ( Tepilo is free).  Compare this to the commission charged by agents where commission can run to many thousands of pounds. A recent Which? report found estate agent fees range from 0.75 per cent to 2.5 per cent, with 1.8 per cent the average fee. Selling a £300,000 property on this basis would cost £5,400.

It is fair to say Estate agents clearly provide a more comprehensive service than intermediaries, including offering complaint processes and redress if needed. However any change that will help to put pressure on agents to charge a fee  that is more proportionate to their input will be welcomed.

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Can the fee of an estate agent be justified?

It often makes me choke when I learn how much the estate agent is to be paid in commission on the sale of a property.   Often fifteen times more than my fee and for much less effort.   On top of this the agent may also be receiving a referral fee of around £200 to £300 from the solicitor he or she has recommended. Yes, you could accuse me of jealously, and yes, perhaps I should seriously think of a career change. 

It is also I suppose a sad indictment of my profession when one looks at how the Law Society has allowed such a situation to arise.   Solicitors were at one time paid according to a national fee scale, so depending how much a property was worth their fee would be calculated accordingly.   Unfortunately an inept professional body combined with outside competition has led to many solicitors undertaking property transactions for less that the cost of a family ticket to gain entry to Alton Towers.

So how can an estate agent justify such a large fee?  It is true that the cost of advertising and employing staff is high.  It is equally fair to concede that difficult to sell property can often create a long running financial burden for the agent.  However there can be no justification for an agent calculating a fee based on a percentage of the value of the property.  This is outdated and has no relationship with effort or ‘value for money’ considerations.

I would perhaps be less harsh in my view if I could be convinced that most agents deliver a high and efficient service for the home seller and buyer.   My experience suggests the opposite.    There are a large number of agents who consider their role is nothing other than to advertise property, to introduce a potential buyer to a seller, and to then look to the solicitor acting for the seller to collect their fee at the end of the transaction for immediate banking.    These agents are not keen to assist during the sale transaction and spend most of their time playing one solicitor off against another.

I am sorry but I expect an agent to be more pro-active and to do everything possible to assist the seller and the selling solicitor in making sure the seller’s experience in selling their home is pleasant and stress free.

There are a number of administrative tasks during a transaction that an agent could undertake. They could help with the delivery and signing of documents such as the contract and transfer.  They could play a larger role in collecting replies to inquiries and also helping to coordinate exchange and completion dates.   On the whole there are plenty of ways the agent could in collaboration with your solicitor help to speed up the process and to put it bluntly do more to justify the high fee charged.

At present our experience is that many agents actually contribute to delay through constantly calling the office for pointless updates as well as giving home sellers unrealistic expectations about how long the process will take to complete.

I did have an attempt to stand up to local agents.   About six months ago I said I would only collect the agent’s fee from the client and meet the extra work and cost of passing this money onto the agent if the agent paid me £50.     I did add that if the agent referred a couple of clients to me each month I would waive the fee.  What reaction did I receive?   Well it was if World War 3 had broken out.  ‘What right do you have to demand payment?’  ‘You are not allowed to do that!’ ‘We will report you”.    It was as if I had committed a crime.    The agents just did not get it.  For a fee of around 1% of their fee (or some referrals) I was offering to continue to collect their fee from the client (even no there is no obligation on me to do so) to preserve their cash flow and to minimize their bad debt.    They could not see that given how my fee structure had been squeezed the extra cost to me of collecting and accounting to them was beginning to impact on my bottom line.

All but one agent refused to pay and I now tell clients that they must pay the agent direct.  It’s a shame more solicitors do not recognize that this custom of collecting and paying the agent’s fee is no longer financially sustainable.  In a climate where the likes of Ryan Air  are looking to cover the cost of any extra administrative task however small  surely its time to break away from outdated and unnecessary conventions?

At the end of each transaction we send out a client feedback questionnaire and on this we ask the client to give a rating on their agent.   We always send the completed form to the agent and invite comment.  Not one agent has come back to us.  It seems the majority of agents just do not care.

Will anything change?  This is unlikely to happen as long as homeowners continue to pay scale related commission.    As long as the agent continues to receive such high fees why would the agent wish to change anything?  

Buy to Let tips

There are several reasons for looking at property to purchase for the purpose of letting.   

Property prices are still falling and providers of mortgage products for buy to let are offering competitive rates.   Added to this we are experiencing a rise in rents due to a shortage of good rental property.  The shortage of mortgages with a high LTV (loan to value) has led to an increase in interest in rented property.  In line with our friends on the Continent the focus is now beginning to move away from home ownership towards rental.

So what do you need to look out for if you are looking to enter this market?  To begin with the property is likely to be in the lower price bracket and will therefore need to be chosen carefully.  

Start with speaking to the selling agent and find out what rental income it is likely to generate, whether there are comparable properties that can considered and more importantly whether there is a high demand for rentals in that area.   Check that the selling agent has experience in the rental market.  This is an important exercise because your mortgage company will be looking at the rental value when it comes to valuing the property for security purposes. 

Make sure you always invest in a full survey.   This is likely to cost around £400 and will be worth every penny.  You need to make sure there are no hidden surprises such as the need for a new roof or other  major works that could upset your financial calculations and turn a profitable investment into a drain on your resources.  Don't do what a large number of purchasers do and rely on the mortgage valuation.   This is dangerous because the lender's surveyor is only only interested in making sure the property offers adequate security for the loan. 

A survey may also help you secure a reduction in the selling price.   I act for a number of investors in property and in my experience you can normally with a full survey look to save around £2000 on the agreed price.

Many of the investment properties on the market are flats or leasehold properties.  Approach these properties with extra care.  They are often cheap because the unexpired term of the lease has fallen under 80 years.   The reason for this is that once a lease falls below this threshold the cost of extending the term can prove prohibitive.  

Leasehold property can also come with hidden cost which again if not checked can turn a potential investment into a loss.   Most properties require the owner to pay a service charge and ground rent.   Typically this will be around £1200 per annum and needs to be factored in when looking at the expected return.

You should always ensure extra funds are set aside to cover any major work that might have to be undertaken to the property.   Redecoration to the common areas of the building and replacement of lifts can often cause the service charge to increase significantly.  A new lift can cost around £100,000!

There may be a reserve fund set aside for major works of this type.   If there is not I personally would not purchase unless I knew what work was likely to take place within the next 10 years. 

Being a landlord is not just about collecting the rent.  There are a raft of legal obligations to meet relating to  deposit holding gas electricity just to mention a few.  Make sure the surveyor is told you intend to let so that he can check out the gas and electricity installations.  I recently  had  a client complain because on completing the purchase of a buy to let property she found the gas fire in the lounge was not working.  I politely reminder her that she was advised to arrange a full survey before committing to the transaction.   Cutting corners to save money can often prove to be  a costly mistake. 

The last and most important piece of advise is to always choose the right solicitor to act for you.  Choose someone like me who has experience in this field and who knows what to look for particularly when it comes to purchasing a leasehold property.  This is a specialist area and requires expertise.

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Is October 2012 the right time to introduce new building regulations?

Though there is little written on the subject it seems that by October of this year we will all be paying more for home extensions and improvements.   

It is expected that those undertaking home extensions, loft conversions or integral garage conversions will be required, and not given any choice, to undertake ‘consequential’ energy efficiency improvements in other parts of their property.

Upon implementation this may mean having to find the money to implement measures such as fitting a new boiler or solid wall insulation, up to a limit of, or even beyond, a value of 10% of the cost of the extension or conversion works.

If you are thinking of only replacing a boiler or (some or all) windows this likely to trigger  a mandatory  requirement to install one, some or all of loft insulation, cavity wall insulation, hot water cylinder insulation and draught proofing.

The impact of these requirements could be significant when you consider with information supplied by the DCGL that every year there are around 200,000 domestic extensions, loft conversions and integral garage conversions, one million homes have windows replaced and 1.4 million boilers are replaced.

If you are thinking of making changes now is to the time or you could find making and paying for changes beyond the scope of their planned building works.

The aim is admirable - implementing cost effective changes will help reduce carbon emissions and save on energy bills.  However at a time when the economy is running on empty is the timing of this right?   Are we ready for more red tape, extra costs and will not in fact put off people from carrying out home extensions and how will this impact on the building and other related industries.  Time will only tell.

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

What is the Green Deal?

What is the Green Deal?

This is scheduled for introduction in autumn of this year, and will enable accredited retailers such as Tesco and B&Q to supply, without no upfront cost, quality assured services to homeowners and businesses looking to improve the energy efficiency of their property.

The full cost of the measures will be recovered through instalments on the energy bill over several years, and because the Green Deal is not a personal loan or an advance payment scheme, there is no obligation to continue paying the instalments when the owner moves home.

Qualification for the scheme depends on a simple calculation, known as the “golden rule”– whereby the predicted savings from the energy efficiency improvements to the property must equal or exceed the cost of installation.

How will it work?

Those wishing to participate in the Green Deal will require a full property assessment carried out by an independent and fully accredited advisor.  This initial consultation will provide householders and business owners with an opportunity to learn about the current energy performance of their properties and the specific measures which they would have access to under the Green Deal to improve this performance.

If it assessed that the homeowner or business owner qualifies (see above) then a comprehensive quote, clearly breaking down the total cost of energy efficiency installations for your property, the size of repayment instalments attached to utility bills, and the estimated length of the repayment period will be issued. 

This will be supervised by the accredited advisor who carried out the survey and the work will only be financed if it is carried out by approved Green Deal installers.

How will it be financed?

The finance will be through an instalment plan attached to the utility bill and which will be attached to the property rather than the individual.

Although a Green Deal finance plan requested by a homeowner or small business is not a personal loan, it is likely to be considered a fixed term credit arrangement and customers will therefore be protected under the Consumer Credit Act.

How will installation work?

Once a Green Deal finance plan has been approved, installation will be arranged and carried out by certified Green Deal providers. 

Will the Green Deal help to save money in the long term?

Only time and a track record will tell!

The current language used by the Government suggests they are also not sure of the probable outcome of the measures.   Upon being pushed by a commentator on this subject the Department of Energy and Climate Change stated: "[People] should still save money compared to what it would have cost to heat their home in that way without a Green Deal."

How will the Homeowner and Business Owner be able to monitor and track progress once the initial application of interest is registered?

We are currently working on a tracking system which can be used by the home owner and business owner to record and track key stages within the process and to create at the end of the procedure a property log book for transferring the records and information to the next owner.

For further information on the Green Deal feel free to email me

David Pett

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk