CH5

Question 1

What is the starting point for a purchaser?

Answer 1

Budget

Question 2

What two principal matters does the lender focus on?

Answer 2

• borrower’s ability to service the proposed borrowings, based on income, outgoings and track record; and
• suitability of the property as security for a mortgage advance.

Question 3

IS SDLT payable on fixtures or fittings?

Answer 3

Will inc fixture
Not fittings

Question 4

What is gazumping?

Answer 4

The seller, despite accepting the offer (but before contracts are exchanged), accepts a higher offer from another buyer

Question 5

What is gazundering?

Answer 5

buyer waits until contracts are just about to be exchanged and then lowers their offer.

Question 6

What is gazanging?

Answer 6

arises when a vendor decides to pull out of a property transaction having intimated that an offer has been accepted. As acceptance is invariably conditional, the seller can usually do this at any time up to the exchange of contract

Question 7

What are the two methods of bringing a property to the market?

Answer 7

• private treaty (or private bargain in Scotland); and
• public auction.

Question 8

If public auction, at what point is offer legally accepted?

Answer 8

At auction/bid

Question 9

What is a conditional auction?

Answer 9

On acceptance of an offer the purchaser pays a reservation fee to secure the right to buy the property. Once this is paid, the purchaser has 28 days to exchange contracts, then a further 28 days to complete the purchase.

Question 10

When is there a binding contract in place and estate agent’s role complete?

Answer 10

• contracts are exchanged (in England, Wales and Northern Ireland); or
• missives are concluded (in Scotland).

Question 11

What will a lender insist on if self build?

Answer 11

• Builder member of NHBC (or similar)
• Or, supervised by qualified architect

Question 12

Before a property can be sold, the solicitor must confirm what?

Answer 12

1. Seller entitled to sell
2. Property offered is exactly what purchaser believes

Question 13

Investigation of title is carried out by searching what?

Answer 13

• Land Registry/Land Register of Scotland in the case of registered land; or
• Land Charges Registry/General Register of Sasines in the case of unregistered land.

Question 14

How does a solicitor establish root of title on unregistered land?

Answer 14

searching back over the history of the property for the last 15 years.

Question 15

What is dry rot? What is treatment?

Answer 15

• Condition affecting timber. It arrives in airborne fungal spores which attach themselves to wet timber.
• Treatment: involves the removal of all infected timber up to a metre beyond the contaminated area and the chemical treatment of all remaining timber. This work can be both extensive and expensive.

Question 16

What is wet rot? What is treatment?

Answer 16

• Decaying of timber because of water damage, but without the presence of dry rot spores.
• Treatment: remedying the root cause (e.g. missing slates, leaking window frames), removing badly damaged wood and replacing with sound timber.

Question 17

What is subsidence and heave?

Answer 17

• Subsidence = land drops
• Heave = ground rises

Question 18

What are symptoms of subsidence?

Answer 18

usually new or expanding cracks in plaster/brickwork or doors or windows jamming.

Question 19

What are three main causes of damp?

Answer 19

• Rising damp - ground water rising through the brickwork through capillary action. Treatment consists of injecting a chemical damp-proof course at a suitable level.
• Condensation - caused by a lack of ventilation, which allows warm air to condense on colder surfaces. Treatment usually consists of improving the flow of air in the affected area.
• Leaks can be from loose or missing roof tiles, leaking window or door frames, washing machines or other domestic appliances.

Question 20

What are the two types of conditional acceptance?

Answer 20

1. Undertaking from the client to make repairs. Requires some remedial work to bring it up to an acceptable standard. The lender may inspect the property to ensure the work has been carried out - many lenders rely on the integrity of the borrower.
2. Retention is where the repairs are so vital that the lender holds back some of the monies, which will only be released once the repairs have been carried out to a standard acceptable to the lender