Chapter 16: Who to Trust When Buying Property
This is an extract from the ebook How to Really Buy a Property.
What's covered in this chapter
- Why many buyers place their trust, understandably, in the wrong people because the theory of house buying works so completely differently from the reality;
- Why the advice of family and friends causes some people to pull out of a purchase and regret it later;
- Why the solicitor you are paying may not be acting in your best interests;
- Why the surveyor who values or inspects the property may not be acting in your best interests;
- What is motivating the estate agent and their actions;
- How to work out who is telling you what and why.
Why Buyers Trust the Wrong People
To put it another way:
- The buyer does not trust the agent because they believe the agent is only trying to get the sale through in order to earn some commission (see Working With Estate Agents)
- The buyer does trust their solicitor even though, in most cases, the solicitor has a vested interest in the sale not going through (see Choosing a Solicitor or Conveyancer)
- The buyer does trust their surveyor even though the surveyor has a vested interest in the sale not going through. (see What A Property Survey Really Means)
- The buyer does trust a friend or relative even though that person may
- have wildly different tastes and lifestyle
- not want to be responsible for recommending a property that, later, their friend may be unhappy in.
The Advice of Family and Friends
When a potential buyer has had an offer agreed and then asks to bring their mother or friend round to have a look many agents refer to this as "The Kiss of Death"! And it is with good reason as they rarely share the same tastes but despite this the advice they hear from someone they respect usually causes them worry and stress.
Let's take a look at a perfect, and common, example of a mother and daughter seeking advice from each other:
|Requirements: Quiet country house in a small village with a close community||Requirements: City apartment close to transport, bars, shops and other aminities|
|Both parties find what they are looking for and then ask the other to come and have a look...|
|Daughter: "It's a lovely house but you are so cut off here, you need to take the car everywhere and the neighbours are probably really nosey."||Mother: "It's very small for so much money and what about drunk people coming from those pubs, do you think you would really be safe here."|
|Post visit both parties call their agents||Mother: "I'm not sure any more, I've been thinking that it is a bit in the middle of nowhere and the other houses really are quite close to my garden."||Daughter: "I've been having second thoughts that the street might not be that safe and it could be really noisy at night."|
Before you know it both parties are actually looking for something they don't actually want simply because they respect the opinion of the other. When taking the advice of family and friends consider carefully if you would like to live in their home, and could you afford it? If not, take what they say with a pinch of salt.
The Advice of the Solicitor
It would be fair to assume the solicitor you are paying will be protecting your interests when it comes to buying a property. They should be checking the paperwork and making you aware of any unusual discrepancies that they believe will be material to your decision making. And this is exactly what the most professional solicitors do.
But there is a flip side which depends on the type of solicitor you have instructed. You will either be paying a solicitor a flat fee for their services or you will have hired one that offers a 'no purchase, no fee' promise.
Flat fee solicitors - in this situation the solicitor knows he will get paid no matter what the outcome is. However he knows that if you exchange and complete on the property, and then later find he did not make you aware of some points which you feel were important, he can be sued. It is thus in his vested interest for you to pull out of the purchase - fee paid, no risk. For this reason very small firms of solicitors often appear extremely over protective and often present you with reasons why you should not proceed further on a particular purchase. Reasons a larger and more financially resourced, firm would not suggest.
'No purchase, no fee' solicitors - these firms usually calculate into their business model that a certain percentage of purchases will fall through. Those clients that do buy cover these costs which means they are generally more expensive. This aside a 'no purchase, no fee' solicitor has a vested interest in your offer going through to exchange and so may gloss over points that they really should bring to your attention. The likelihood of this will rise if the percentage of fall-throughs they are experiencing is rising above that of their business model.
For more details on solicitors see chapter 12: Choosing a Conveyancer or Solicitor.
and all the others, when you
purchase the ebook How to Really Buy a Property