If you must buy, you should try to do your house-hunting early - meaning some weeks or months ahead of the big buying season that gets under way in April-May of each year. Michael Schell of London's Metropolitan Relocation Associates notes that "real estate brokers will give a 'pre-season' buyer much closer attention." The broker has the time and needs the commissions. More important is the price jump: Between, say March 15 and June 15, an upper-bracket house may well jump 5% in cost to a buyer. Since you're buying a standing house, you aren't faced with the disadvantage of a parallel boost in construction labour costs.
Also, there's a better chance for negotiation in the off-season months when fewer buyers are trooping through houses. A seller who needs to make a move may loosen up on such items as fixtures, carpets, drapes, garden and game room equipment. He may even leave a piano behind - and if you get a real break, he will slice off a bit of the house price because you have a jump on the selling season. And note: Sometimes you will do a little better with lenders for your mortgage loan - with fewer home buyers crowding the waiting rooms of banks, building and loan companies, and such.
In any case, if you will be buying in a strange city, always allow a good two or three weeks to pick your suburban community, then two to four weeks more to find a house if you want something really worth your pounds - and figure a month more before the closing.
In some states, usury laws hold mortgage rates down to 7% or TA. But the trouble is that "points" are often charged. The points, each worth 1% of the mortgage, are deducted by the lender from the proceeds of the negotiated loan that are paid to the seller. So the seller pays the points, but usually he passes them right along to the buyer. Today, deals are being made with as many as 5 to 10 points. In states where there's no maximum on mortgages, the interest rates go sky-high. In Connecticut, for instance, the range is currently 91/2% to as high as 10%.
What can a buyer do? A big down payment may not swing a lower rate, as many people believe. The lender may still need its maximum yield, no matter the amount. Making the rounds of lenders may not be productive shopping may shave
a quarter-point from a mortgage rate, but there's no guarantee. Even an executive's company contacts may not help much: He may land the mortgage, but at the top rate.
One chance for at least modest savings is to assume an owner's mortgage that has a lower rate of interest. The drawback is that the buyer may need extra cash. If the mortgage loan is down to, say, 50% of the value of the property, you - as buyer must come up with the other 50%, cash on the line.
But note: If you get advantage of the difference between, say, an 1/2% loan and 6%, you save a shade over £2 per month per £1,000. So, on a £30,000 loan, you save £720 a year.
Another way to save on a house deal is to make certain that there's top value in the house itself. It's smart to hire an expert for cellar-to-attic inspection. A builder or engineer will charge £50 to £200, depending on the house size and location. Nationwide Property Inspectors Service, Ltd, with offices in major cities, is one of several growing companies in the business.
Housing abroad: Besides screening suburban bedroom communities in the UK., such operations as Homerica, Ltd, and Previews' Executive Homesearch (a division of Previews, Ltd) are expanding home-location services in Europe.
Swinging Property Deals
Grim scene on the buyer front
If you're a novice at the usual tug-of-war over even the simplest real estate deal, you may find some small solace in knowing that a residential property transaction breeds more ulcers than almost any kind of pound transfer. The middle men alone annoy or frighten most people, and for good reason. To help ease this situation, here are some bits of knowledge on buying, leasing, selling, improving - pick your own spot.
Today (circa 2005), the market a buyer faces is grim - especially if he's an executive or professional who wants to move into an upper-class bedroom town. Prices in most big cities are still far higher... see: The Land You Live On