While the most tried and tested process for buying properties is to use an estate agent, buying a house privately in the UK is a straightforward process.
It’s also one that is growing in popularity with sites dedicated to helping sellers find buyers privately – though sadly not the popular portals such as Zoopla.
There are advantages for the seller, in that they will not have to pay estate agents fees which can amount to a tidy sum of several thousands of pounds.
For the buyer, the process is similar to using an estate agent though all your negotiating will be with the seller and conveyancing solicitor and not with the agent.
This could make the house buying process easier and smoother, rather than having to wait for agents and conveyancers solicitors to return with an answer to a question.
Can you buy a house directly from the owner?
There’s nothing to prevent anyone buying a house directly from the owner and there are some particular circumstances in which this maker, including:
- A parent wanting to sell their home to a child;
- You have seen a house being advertised with a simple notice in the window;
- You rent a property you love and ask the landlord whether they want to sell.
Whether you have the money available to be a cash buyer or not is immaterial since mortgage providers will be more interested in the value and condition of the property than whether you are dealing with estate agents.
Indeed, regardless of who you are buying the house directly from, it’s always advisable to have a proper survey carried out to bring peace of mind and highlight whether there are any areas for renegotiating the price to account for any potentially expensive repairs. For example, this may include having to install a new boiler or replace the roof.
Of the surveys available, there are:
- The homebuyer’s report: This is the cheaper survey to be carried out will cost between £300 and £400. It may be more suitable for a conventional property that is less than 50 years old.
- A full structural survey: everything is covered in a detailed report and these can cost you up to £1,000 to carry out. However, they will be worth the expense, particularly if the surveyor highlights any potential problems that encourage you to pull out of the sale or help renegotiate the price.
Your checklist when viewing a house being sold privately
Even if the person selling the house is a family member or a close friend, you still need to be vigilant that you are spending money on a sound investment. This will be your home and you still need to take the same careful steps when viewing the property as a potential buyer, and not as a visitor.
Among the issues you should take into account are:
- Damp: Watch out for peeling wallpaper and mould as well as condensation on windows. Also, don’t be shy about opening cupboards to see if they smell ‘musty’;
- Ceilings: Check for cracks and potential problem leaks, particularly if it appears as if a ceiling has been recently repaired;
- Windows and doors: Open and close windows and doors as you are being shown around the property to ensure everything works, including drawers and cupboards;
- Switches: Turn lights on and off, particularly if there are older switches. Switch on the cooker and ask how old the wiring is since updating the electrical wiring can be very expensive;
- Power points: Count how many power points are in the property and in each room and test sockets wherever possible;
- Plumbing: Always turn taps on and flush toilets to ensure everything is working as it should. Check underneath the sink and cupboards to ensure they are dry and ensure the water pressure is correct and that the hot water does get hot;
- Heat: The reason for checking the water temperature is to ensure the boiler works as it should so always ask for the central heating to be switched on. Check radiators for leaks or signs of rust and check that they get hot across the entire surface. If the boiler is not working, that’s an expensive replacement;
- Wallpaper: If the property has textured wallpaper or woodchip then that could mean lots of excavating through several layers of paper and the risk of pulling lots of plaster off too. It’s an annoying and time-consuming issue to resolve;
- Roof: Ask to access the attic and also check the roof from outside for damaged or missing tiles. Also, check the gutters for potential problems and whether they may leak.
How to buy a house privately
If you want to know how to buy a house privately, then you need to find a property with a willing seller.
If you don’t have a family member, friend or landlord who is willing to sell, then you could:
- Find somewhere you want to live and simply put flyers through letterboxes in the hope someone responds;
- Ask around friends and family to see if they know of anybody looking to sell up quickly;
- Some people may simply advertise their home for sale either in local media or online.
Once you’ve found the property, then you’ll need to follow the usual steps which are:
- Ensure that the price for the property is reasonable, so you and the seller could arrange for two or three estate agents to offer value and agree on a figure;
- You could also visit one of the property portals such as Rightmove to see what similar properties have sold for in that area recently;
- By law, the seller must have in place a Home Information Pack – even if it is a family member selling to you. This pack should include the energy performance certificate;
- You will also need to take on a conveyancing solicitor to ensure that all of the legal aspects are taken care of including whether there are any leasehold agreements or if it’s a flat, what the service charges might be;
- Ensure that when you make an offer to buy, then have the seller’s acceptance of that bid in writing.
Remember, you have not bought the property until contracts have been exchanged and if you need to source a mortgage, then you should do this as soon as possible.
Can I buy a house without an estate agent?
While the traditional way to buy a home in the UK is to use an estate agent, there is no legal reason as to why you should buy a house with one.
The seller will be saving on agency fees and as a buyer, you need to appreciate that the estate agent is always working in the best interests of their client, the seller. This means there may be less haggling over the selling price because the agent may be wanting to bump up their commission.
How do I make an offer on a house without an agent?
If you want to make an offer on a house without an agent, then you simply make that offer in writing or verbally but you must have the seller accept it in writing.
This then is the basis of a selling contract as the price has been agreed and your conveyancing solicitor can then begin their process to ensure everything is legally sound and the buying process will be completed.
It’s perhaps a good idea to have a solicitor ready for making an offer and ensuring the acceptance of your offer is legally-sound.
Buying a house privately from family
When it comes to buying a house privately from family or indeed from friends, there’s nothing to stop the seller from offering their property at a price they want.
This may mean that the buyer gets a bargain, though the situation is complicated if there’s an outstanding mortgage because this will need to be paid.
The main issue to appreciate is that the property is an asset of the owner and it is worth whatever they consider it to be worth. However, it’s also worth having specialist legal advice because there may be implications on tax planning and potential care funding issues.
The latter is particularly important because local authorities have the power to go back in time to ensure that the property was sold for the right price if it is suspected that the property was sold cheaply to avoid having to pay care home fees.
If so, this is called ‘deliberate deprivation’ of your assets and the sale could be disregarded so that the property is still considered to be the owner’s asset so they will be liable for any care fees.
The local authority can also have the sale overturned and there is no time limit for action in these matters.
There may also be an issue with inheritance tax if the house has been ‘gifted’ to you with a price being a lot less than its market value.
Buying a house privately in Scotland
The process to purchase a home in Scotland differs from that in England and Wales, and this is what you will need to know when buying a house privately in Scotland.
Firstly, the seller will still need a home report on their property, unless it’s a new build or the property is being converted into residential use.
This home report should consist of a single survey, along with an energy report and a property questionnaire.
The survey will offer an evaluation of the property’s condition included the plumbing, external walls and the roof and the buyer can still consider having a more detailed building survey done if required.
The property questionnaire answers any questions you may have – including whether the property has been treated for wood rot previously or has suffered from flooding. It will also reveal what the council tax band is and whether there are any parking arrangements.
The other big difference when buying Scottish property is that they are usually marketed and sold by solicitors and not by estate agents.
The properties will be advertised at a fixed priced or will use the words ‘offers over’ or ‘offers around’ a certain price. In this case, there will also be a closing date that prospective buyers have to submit a sealed bid.
As a buyer, you’ll still need to instruct a solicitor to undertake the conveyancing aspect and help explain the home report to you.
You also need to check if there are any alterations to the property and whether they comply with building control approval or even have planning permission.
The seller will then look at the offers available and they don’t have to accept the highest – they may simply choose a quick sale with a chain-free buyer.
Once accepted, then a solicitor will confirm your mortgage with a lender, deal with legal enquiries and agree on an ‘entry date’ or for the exchange of contracts.
Fees to consider when buying a home privately
While the seller will be saving money on estate agency fees, as a buyer there are still fees for you to take into account when buying from someone privately. They include:
- Stamp duty: In England and Northern Ireland, if the property is costing more than £125,000, or if you’re a first-time buyer, £300,000, then you need to pay stamp duty. In Scotland, it’s known as the Land and Buildings Transaction Tax, and in Wales it is the Land Transaction Tax;
- Mortgage lender fees: If you need a mortgage, then you’ll have administration fees that could cost you up to £2000;
- Legal fees: Remember your conveyancing solicitor will need paying for providing a range of legal services and ensuring that all the legal requirements are met.
Finally, when it comes to buying a house privately, you may be getting your dream home but it is still worth taking time to ensure that you won’t be saddled with an expensive liability and you’ll still need to comply with laws to ensure that when you exchange contracts you really are the owner of the property – even if you are buying it from a family member. It’s always better to be safe than sorry and using experienced surveyors and conveyancing solicitors will be of great help.