Catch up on Graeme's journey into becoming a home-owner. This week he faces the sneaky tactics of his estate agents, appoints a solicitor and has to decide whether to own the house as joint tenants or tenants in common.
While my brother and I had been thinking about our mortgage options, it did not escape our attention that we had heard nothing but silence from the vendor regarding our offer. Presently, we received an enquiry from the estate agent: the vendor wanted to know what loan to value we needed for the mortgage.
Being quite a sensitive question, we were reluctant to respond, but we feared that the vendor might be trying to guess our chances of securing a mortgage, and answered truthfully. After a couple more days, we had finished picking a rate and sent our AIP to the estate agent, at which point two things happened at once:
- They stopped trying to convince us to switch broker (finally)
- We received an email notification that our offer had been submitted to the vendor
Hang on. Back up a minute. Why wasn’t the offer passed on earlier? More importantly, how could the vendor have asked about our LTV if they were only now receiving our offer?
In hindsight, we don’t think the vendor did ask about our LTV. While this might just be a late memo, we now think that it was the estate agents who wanted to know our LTV, as the first stage in their aggressive bid to transact our mortgage.
The following day, we received a reply: the vendor deemed our offer acceptable, and the house would be taken off the market (this was one of the terms of our offer). As well as being excellent news, this was our cue to appoint a solicitor.
We chose a small, local firm of property lawyers to represent us and had them send us an “initial instructions” form. Our reasoning was simple: if there were any issues common to the area, a local firm would be most likely to know about them already. The form we received is a short document, designed for clients to outline the details of exactly what kind of transaction they wish to perform.
Nestled in the midst of this was an as-yet undecided question: would we be joint tenants, or tenants in common?
To help make the decision, our solicitors had included a short document defining the two terms and describing the legal implications of each. Additionally, it seems my brother had been reading up about this already, and he insisted that I digest the relevant pages from a book he’d picked up, by Phil Spencer.
In broad terms, the difference is this: joint tenants both own the whole house (with various implications for heritability and so forth), while tenants in common each own a fixed percentage, the amount being defined during the purchase.
Having familiarised ourselves with these terms (which are, in fairness, a little more nuanced than implied above), we quickly agreed that we should be tenants in common “in equal shares”, which means that we will both own half of the house once our purchase completes. This keeps things clearly defined – on disposal of the property, we will each be entitled to half of the proceeds.
Having completed and returned the form, it was (sadly) time to get back in touch with the estate agents. Time to get everyone’s solicitors talking to each other...
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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