Organising Your Mortgage

If you need a mortgage, get an agreement in principle from your lender before you do anything else. Also known as a ‘Decision in Principle’ (DIP), ‘Mortgage Promise’ or an ‘Agreement in Principle’ (AIP), a mortgage in principle is a certificate or statement from a lender to say that ‘in principle’ they would lend a certain amount to a prospective borrower or borrowers based on some basic information. Sellers will take your offer more seriously if you have this in place, so it puts you in the best position from the outset.

You can organise a mortgage in principle either directly through your bank, or via a mortgage broker. Mortgage brokers will assess your affordability and liaise with the lender on your behalf. If you need a broker recommendation, we can suggest one.

Instructing a Solicitor

You should appoint a solicitor to act on your behalf before your offer is accepted in order to avoid delays later on. We have dealt with many, many solicitors over the past decade and can say they vary greatly in quality. It’s crucially important to get a good solicitor (efficient, responsive, and insightful) as they will protect your investment and are there to represent your best interests. The Modern House isn’t affiliated with any solicitors, but we work regularly with some great ones who can provide you with free quotes, if required.

Your viewing will take place with either the owner, a member of The Modern House staff or one of our viewing hosts. We will confirm the name of the person who will be showing you around and send you a viewing booking confirmation by email. We will also send you a reminder about your viewing 24 hours before it takes place. If you have to cancel a viewing, or are running late, please call our office on 020 3795 5920 and let us know as soon as possible so we can give the person showing you around plenty of notice.

Feel free to ask as many questions about the property as you’d like at the viewing, although please be aware that owners and freelance viewings hosts will direct you back to the office if you would like to discuss the asking price or offers.

Feedback

After a viewing, we’ll be in touch with you to ask for your feedback, and we invite you to be as honest as possible. Loved the kitchen but wanted more outdoor space? Thought that the neighbourhood was charming but parking would be an issue? Tell us. It really helps us to inform our seller what ‘the market’ thinks and may even allow us to suggest alternative homes for you to view.

Offers

If you wish to make an offer, please call or email us. We will need to ask you a number of questions relating to your position (are you in a chain, for example) and how you are intending to fund the purchase. We will send you an offer letter to complete to simplify the process and to ensure we can put your offer forward in the best possible light. Once we have this from you in writing (by email), we will inform our client and you will receive a copy of the offer receipt.

If and when your offer is accepted by the seller, you will need to go through some identity checks and also provide your mortgage agreement in principle and/or proof of cash funds. We have teamed up with Thirdfort, a specialist provider, meaning the identity checks can be completed quickly and remotely using a secure app, saving you the need to certify documents at our offices or the Post Office.

If you are purchasing with a mortgage, we will need either an agreement in principle and proof of your 10% cash deposit, or we will need a headed letter from your broker confirming your affordability and proof of your deposit.

Proof of cash can be copies of bank statements with your name and the amount held, or a headed letter from your financial advisor or a solicitor. If you are being gifted any funds, we will also need direct communication with this party to confirm they made the gift willingly. We will not be able to formally or legally agree the sale without full proofs of funds so please don’t be offended by us requesting this information! It will not be shared with any other party and is an essential part of the due diligence process we are required to carry out.

Finally, please be aware that all estate agents are legally obliged to put forward any offers they receive to the owners, even after a property is listed as ‘Under Offer’. Whilst we actively try to discourage gazumping at any point and won’t disclose details of your offer with other interested parties, it is still an unwelcome practice that can happen.

Once we have verified your ID, proof of funds and you have instructed a solicitor, we can then issue a Memorandum of Sale. Once the memorandum is issued, we will usually list the property as ‘Under Offer’ on our website and cease viewings, unless specifically requested by the seller to do otherwise (this is rare).

The memorandum is emailed to all parties (buyer, seller and their legal representatives) outlining the proposed terms of the transaction and is the solicitors’ cue to begin the conveyancing process. It’s on!

What Happens Next

Your solicitor will guide you, but you will need to transfer them the funds to order the conveyancing searches and the title deed for the property you want to purchase. These are enquiries made on your behalf to various authorities that hold information about the property, the land it sits on and any factors which may directly (or indirectly) effect it and inform your decision to proceed with the sale. They will then request a pack of information about the property (including the draft contract and fixtures and fittings form) from the sellers’ solicitor. These will all be reviewed, with questions going back and forth (known legally as ‘enquiries’), until your solicitor is satisfied with the information that they have. They will then report their findings to you and ask you to sign the contract.

The assigned representative at The Modern House looking after the home you are buying will keep a regular check on the progress of this process, trying to unblock any hold ups that may occur and ensuring you feel informed about what is happening. They are on hand to answer any questions you may have and will work on your behalf as well as the owner of the property to ensure all parties’ needs are met.

What Else Do You Need To Do?

If you are getting a mortgage, your lender will require a Mortgage Valuation Report. You need to let them know you have had an offer accepted and instruct them to organise the mortgage valuation with your point of contact at The Modern House. This usually costs £200 – £500 for the valuation and you can pay an additional amount to get the surveyor to carry out either a Home Buyers report or Buildings Survey.

Surveys

The Modern House always tries to discover and inform you of any significant issues with a property before you get to the point of survey (common issues include asbestos, Japanese Knotweed or subsidence) but no property is perfect, unfortunately, so do expect minor issues to arise at this point. If you decide to invest in a full Buildings Survey, carried out separately to your mortgage valuation, please try to book this in as soon as possible. The Royal Institute of Surveyors is a good place to start your search and obtain some quotes: www.ricsfirms.com

Exchanging Contracts

Once all parties are satisfied with the contracts, finances are lined up and a completion date is agreed. You will be asked to sign the TR1 form (the legal form which transfers ownership from one owner to another) and the contract (which binds the sale). At this point you will be required to put down a non-refundable deposit (typically 10% of the purchase price) which you transfer to your solicitor and they hold in escrow until contracts are exchanged. At this point, the contract is legally binding and both parties can start packing!

Completion is the agreed upon day when the property ownership is transferred and your solicitor transfers the remaining balance of money to the sellers. We will arrange for keys to be handed over to you once we have confirmation from the seller’s solicitor that completion has taken place and the house is legally yours.

Your new home is now yours to make your own! Check out our Directory and Journal for tips, ideas and inspiration.