With the property market as overheated as ever, there is a continuing risk of potential buyers being outbid before they can exchange contracts on a purchase. Known as gazumping, the incidence of offering more money for a property where a sale has already been agreed in principle tends to increase where there is a shortage of property for sale.

The recently released Isle of Man Housing Market Review 2020 has revealed that the average house price increased by more than 7% last year. Estate agents on the island have reported exceptional demand, coupled with a lack of stock.

There is unfortunately nothing illegal about gazumping, as a sale is not legally binding until the point at which contracts are exchanged. Estate agents are legally bound to pass on all offers made on a property. When gazumping happens, it can leave the original buyer out of pocket in respect of costs such as search fees, the cost of a survey, legal expenses and mortgage arrangement fees. In a hot market, it is not unheard of for buyers to be gazumped on more than one occasion.

There are a number of ways to reduce the risk of being gazumped, as follows:

Be Ready To Go

Try and be as prepared as possible in readiness for having an offer accepted. If you will be tying in a sale, make sure that this is as advanced as possible and work with your advocate to provide all the information needed without any delays.

Being organised right from the start will not only allow you to exchange contracts as quickly as possible, it will also demonstrate to the sellers and their estate agent that you are a serious buyer and a good prospect for a successful transaction.

Obtain A Mortgage In Principle

It is possible to arrange a mortgage before you have an offer accepted. This is known as a mortgage in principle. Doing this will mean that a substantial amount of the mortgage lender’s work has been done upfront, so that once you have found a property to buy it will not take them very long to issue a mortgage offer. This can be particularly important in a busy market when lenders have large workloads.

Instruct An Advocate

Instructing an advocate in advance will also give you a head start. They will be able to open a file and do the necessary preliminary work, such as verifying your identity and getting the money ready to pay for searches. Being able to give the estate agent your advocate’s details as soon as you have an offer accepted will also show that you are a serious buyer and ready to proceed straight away.

Ask for the property to be taken off of the market

You can ask the buyer and their estate agent to take the property off of the market. They may be willing to do this and it means that other potential buyers should not see it actively advertised for sale.

Ask For An Exclusivity Agreement

In some instances, a seller may be prepared to agree to an exclusivity or lock-in agreement, although this is less likely in a vigorous seller’s market. An exclusivity agreement is a legally binding contract where both sides agree to go ahead with the transaction unless something unforeseen comes to light, such as a major issue with the survey or where the searches reveal an issue.

When signing the agreement, both parties would pay a sum of money. If one party defaults on the agreement, then this sum would be payable to the other party. For more information on exclusivity agreements, see our article on avoiding gazumping.

Foster A Good Relationship

Simply being a good buyer can go a long way to making the seller feel positively towards you. If they know that you genuinely love their property and they can see that you are being open, easy-going and helpful, it could make a difference in whether they decide to go with a higher offer or not. If they can see that you are doing everything you can to exchange contracts quickly and that your advocate is keeping their advocate and the estate agent updated throughout, you may still be the more attractive option to the sellers.

In Summary

At Quinn Legal our experienced property advocates understand the importance of dealing quickly with your transaction. We will work proactively on your behalf to reach exchange of contracts without unnecessary delays and do all we can to ensure your purchase is successful.

Contact Us

If you are buying or selling a property and would like to instruct an advocate to act on your behalf or you have questions about the process, please feel free to speak to one of our expert property team on 01624 665522 or email us: hello@quinnlegal.im or fill in our online enquiry form.

With a large number of millennials intending to become landlords, we take a look at the implications of owning a buy-to-let property.

Research carried out by insurance company Aviva has found that one in ten adults in the UK aged between 35 and 45 are planning to buy a property for investment purposes within the next few months.

With the rental market currently strong, putting money into a buy-to-let property is proving an attractive prospect for many.

Costs of buying and owning investment property

As well as substantial property purchase prices in the current market, potential landlords also need to be aware of the expenses involved in taking on a rental property.

The range of buy-to-let mortgages available is increasing, but most still require a minimum deposit of 25-40%. There is no option to offset the mortgage interest against the rental income, on which tax will be payable.

It is important to calculate realistically what you might make on the property before entering the market. Expenses will include the following:

• Mortgage payments
• Buildings and landlord’s insurance
• Letting agency fees
• Annual safety checks
• Property maintenance
• Repairs
• Rent insurance

You should also bear in mind that you cannot be sure of having tenants in the property all of time and make sure that you will be able to manage the expenses even if the property is empty for some months of the year.

Finding a Buy-To-Let Property To Purchase

Research is essential to ensure that you buy the right type of property in the right area to attract tenants. If the property is in a student area, you may be able to let it with basic furnishings and kitchen appliances, but if you want to rent to professionals you will need to ensure a higher-end finish.

You should also check what the property market is like in the area in which you are thinking of buying and where possible choose somewhere that has the best chance of increasing property prices in the future as well as somewhere that will be appealing to potential tenants.

Regulations

Landlords have to abide by strict regulations in respect of issues such as fire safety, gas and electrical checks, property maintenance and safeguarding the tenant’s deposit. You should ensure that you know what will be required of you from the outset so that you do not fall foul of the rules.

You should also take into account that you may need legal assistance at times, for example, if you encounter difficult tenants who are disruptive or fail to pay the rent.

Buying A Property On The Isle of Man

At Quinn Legal, we can help you with the legal requirements involved in purchasing a buy-to-let property.

We have one of the largest and most experienced property teams on the Isle of Man. We are friendly and approachable and we will work proactively on your behalf to complete your sale or purchase. We will ensure you are kept updated throughout your transaction and we are always available to discuss your case and answer any questions you may have.

Contact Us

If you are thinking of buying or selling a property on the Island and you would like to speak to one of our expert property lawyers, please ring us on 01624 665522 or email us: hello@quinnlegal.im.

Alternatively, you can fill in our online enquiry form and one of our team will be in touch within 24 hours.

 

 

 

 

 

 

 

 

While it is bound to be disappointing to discover that the property you want to buy has some flaws, you may still be able to go ahead with the purchase if the seller is willing to negotiate.

It is always advisable to have a survey carried out before you buy a property, particularly if it is an older building or if you plan to carry out work. Some disrepair may be impossible to view as a buyer, but a surveyor will be able to access areas such as the roof space to fully assess the condition.

Common areas that may need work

Some of the most frequent issues raised in property surveys are as follows:

Roof

Surveys frequently discover that roof repairs are needed because of the difficulty of regularly viewing a roof and the exposure it receives. Problems include missing or damaged tiles, water ingress, chimney disrepair, inadequate insulation and ventilation and blocked or damaged guttering.

Subsidence or structural movement

Properties settle over time which can result in minor cracking. Your surveyor will be able to advise whether any issues are due to this or to something more serious such as subsidence or structural movement.

Damp

A surveyor will also be able to advise you of the cause of any damp at the property. This could be from water coming in from outside or from condensation arising from inadequate ventilation or inappropriate cavity wall insulation. Rooms below ground level, such as basements, can be particularly problematic.

Windows

Modern double-glazed windows quite often develop gaps and cracks allowing water to come inside and also to accumulate between the double glazing. There is a chance this could be covered by a guarantee, but in any event, you should address the issue before exchanging contracts.

Asbestos

Asbestos is still found regularly in people’s homes, for example, in garage roofing, lagging, floor and ceiling tiles, around boilers and in loose fill insulation. It must be properly removed and disposed of by accredited experts which can be expensive and disruptive, so if asbestos is at the property you should explore the costs and work involved.

What to do if your survey highlights problems

If your survey reveals problems but you still want to proceed with the purchase, you should arrange for experts to look at the issue and provide you with estimates for the work needed to rectify the situation. The estate agent should be able to arrange access as necessary.

Once you have expert reports detailing the work that will be required and the likely costs, you can ask the seller to reduce the price to take this into account. It is usually in their interests to do this, as it is likely that another buyer would find the exact same problems.

If you ask us to act for you in respect of your property purchase, we can liaise with the sellers’ advocate to ensure that the contract includes any allowance that is made in your favour.

It is also possible to request that work be done between exchange and completion if it is a minor repair. In this case, the contract would also include provision for the works to be examined and found to be satisfactory before completion.

Buying a property on the Isle of Man

At Quinn Legal, we believe that the Isle of Man is one of the best places to live and our lawyers would be delighted to help you secure a home on the Island. We understand the anxiety that can be involved when buying or selling a property and we will do everything we can to make the process as stress-free as possible.

We have one of the largest and most experienced property teams on the Isle of Man. We are friendly and approachable and we will work proactively on your behalf to complete your sale or purchase. We make sure you are kept updated throughout your transaction and we are always available to discuss your case and answer any questions you may have.

Contact Us

If you are thinking of buying or selling a property on the Island and you would like to speak to one of our expert property lawyers, please ring us on 01624 665522 or email us: hello@quinnlegal.im.

Alternatively, you can fill in our online enquiry form and one of our team will be in touch within 24 hours.

 

If you are buying or selling a home, you will no doubt have many questions about the process. We have answered five of the most common questions we are asked to help you understand how conveyancing works.

What happens in the conveyancing process?

Once you have found a property to buy, the estate agent will pass your advocate’s details to the seller’s advocate so that they can make contact.

If you are buying and you instruct us to act for you, contract papers will be sent to us and we will go through them and ask the seller relevant questions about the property. We will also apply for searches, to include a local authority search which will reveal issues such as planned development in the area, a drainage search and environmental enquiries.

You would generally also obtain a survey to ensure that you are happy with the condition of the property. Once we have satisfactory replies to all points, we will be ready to exchange contracts. At this stage, we would pay a deposit to the seller on your behalf, usually ten per cent of the purchase price. If you are also selling a home, then the deposit from your sale can usually be used for your purchase.

A date for completion is agreed when contracts are exchanged. On the day of completion, we will arrange for the balance of the purchase price to be sent to the seller’s advocate, who will contact the estate agent on receipt to confirm that the keys to your new home can be released to you.

If you are selling, you will need to fill in property information forms at the start of the transaction and reply to the questions raised by the buyer’s advocate. On the day of completion, you should leave the keys to the property with your estate agent once you have vacated.

What do I need to do if I am buying or selling a house?

If you are buying a property, you will need to instruct an advocate to act on your behalf and provide details of your identification to them, as they are required by law to check this.

You should also arrange a mortgage if you need one. This can be done ahead of time to ensure that delays are minimised.

If you are selling, then there are property information forms to fill out and some accompanying documentation that you should provide, to include an energy performance certificate and any guarantees that you have, for example for windows or solar panels.

If the property is leasehold, you will also need to provide information about the management of the property, to include management company accounts and ground rent receipts. If you ask us to act for you, we can guide you through the information that is needed to ensure that everything is provided to the buyer’s advocate in good time.

When should I instruct a conveyancing advocate?

It is a good idea to have an advocate in place early on. You can ask us to act for you before you have found a buyer or a property to purchase. We can then let you know exactly what we need from you and start putting the documentation in place. This will help avoid delays later on.

How long will my conveyancing take on the Isle of Man?

The length of time taken to buy or sell a property varies, but on average it usually takes between six and twelve weeks. If there is a chain of transactions, then the process can be slowed down if one person has a problem. At Quinn Legal, we always make sure we stay in close contact with estate agents to try and keep the process moving as quickly as possible.

We also always make a point of dealing with contract papers and enquiries straight away so that there is no delay on our part.

How much will my conveyancing cost?

There are a number of costs involved in conveyancing on top of the legal fees, particularly if you are buying a property. For example, you will need to pay for searches and the Land Registry fee to register your ownership.
For a guide to the costs involved, use our Conveyancing Calculator which will set out the expenses you can expect.

Buying a property on the Isle of Man

At Quinn Legal, we believe that the Isle of Man is one of the best places to live and our lawyers would be delighted to help you secure a home on the Island. We understand the anxiety that can be involved when buying or selling a property and we will do everything we can to make the process as stress-free as possible.

We have one of the largest and most experienced property teams on the Isle of Man. We are friendly and approachable and we will work proactively on your behalf to complete your sale or purchase. We make sure you are kept updated throughout your transaction and we are always available to discuss your case and answer any questions you may have.

Contact Us

If you are thinking of buying or selling a property on the Island and you would like to speak to one of our expert property lawyers, please ring us on 01624 665522 or email us: hello@quinnlegal.im.

Alternatively, you can fill in our online enquiry form and one of our team will be in touch within 24 hours.