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A golden rule for the vendor.

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Sunday 13 September 2009 11.41am
Some useful advice has been offered on this site to first time buyers, but just a word of warning to vendors. During my years in estate agency I saw too many FTB's put the cart before the horse and arrange to view property after property without first seeking financial advice. I experienced the situation dozens of times where an offer was accepted and the vendors, who most of the time had their next property already in mind, went off and offered on that property and paid out for a survey while the FTB's were still waiting for their mortgage offer to come through. There were far too many cases where the FTB's failed in one way or another to satisfy the lender's criteria, e.g. too much of their income was reliant on overtime, too many other outstanding debts, low credit rating, a CCJ that had been forgotten about etc. etc. They then either couldn't get a mortgage, or not as much as they needed to buy the house they had offered on. The vendors of that property, (and so on up the chain,) then had to withdraw their offer/s as they had in effect lost their buyer/s. Survey fees (and we are talking hundreds of pounds) then went down the drain. I banged on for ages for legislation to be brought in to prevent FTB's even viewing,(to save wasting peoples time,)never mind offering on properties until they could produce a certificate from a lender stating that they satisfied the financial criteria and could get a mortgage up to a certain amount. This is not a 'down' on FTB's, but if your'e selling to a FTB explain to the vendor of your prospective purchase that you intend to wait for your buyer's mortgage offer to come through before proceeding to survey. It's usually about two weeks at the most, while prrof of earnings, credit ratings etc., are gathered in. If it's taking longer than that, then smell a rat! And do not part with any money that you cannot get back.
Sunday 13 September 2009 9.54pm
Thanks, valid point!
Monday 14 September 2009 1.22pm
We were asked by some (but not all) agents if we had an agreement in principle in place when we bought our current place, as first time buyers. Most presented it as a plus point for us (that we had one) because it shows that you can move quickly, although I would expect that the agents were also checking that our offer was legit/backed-up so they could advise the vendor effectively.

Perhaps this is another point to consider when instructing the estate agent - i.e. let them know that you want all offers to come with an agreement in principle to back it up. In this day and age I suspect that this should apply to all buyers, not just first timers - it is to be expected that some of those with a property to sell might have mortgage issues as well.
Monday 14 September 2009 5.51pm
Some good points, ADT. I have known second and third time buyers with little skeletons in the cupboard that wern't there when they bought thier existing property, but the vast majority were sound. Having said that, if every prospective purchaser, not only FTB's, could provide proof of a mortgage offer in principle, then it can only be a good thing for everybody. I hated seeing disappointed FTB's as much as I hated being screamed at by distraught vendors who had lost their buyer and their survey fee and search fees had gone down the Swanee. 'Buyers are liars,' was a naughty expression when I was in the business. Unfortunately I did come accross some who fitted the bill! I could write a book, but to give just one example: A guy registered with me as a 'cash buyer.' I asked him if it was cash at bank, or against securites or such that he would have to convert. He hadn't expected to be asked that question and he shuffled a little uneasilly in his seat. He then admitted that he WOULD be a cassh buyer WHEN he had sold his house, which at that stage wasn't even on the market. "But it will sell very quickly," he hastilly added.

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