I am buying a property that was repossessed by a building society. Is there anything I need to watch out for?

Purchasing a repossessed property is no different to buying any other house, although a building society will often set a deadline of, say, 28 days in which they expect exchange of contracts to take place. Building societies are obliged under the Building Societies Act 1986 to obtain the best price for the property, so may wish to keep the property on the market until you have exchanged contracts in case higher offers are made.
   The building society will have very little or no knowledge of the property or its condition and may not be able to answer the usual pre-contract enquiries. They will not know if there have been any neighbour disputes in the past, whether improvements have been carried out in the house or who has maintained the boundaries. You will therefore, have to rely on your survey and your solicitor’s inspection of the deeds.
   Clearly, if there are any time limitations imposed by the building society, you will need to proceed with your mortgage application, searches and survey as quickly as possible. Lenders that have repossessed properties can be quite ruthless when setting time limits because of their duty to obtain the best price. If exchange is delayed, or the property’s value alters, the building society can be held liable by the original borrower if the value of the house has risen and it has been sold for a lesser amount.

The property I am buying is empty. Is it possible for me to borrow a key after exchange of contracts but before completion to carry out some repair work?

Your solicitor will negotiate this with the vendor’s solicitor on your behalf. Many vendors will allow a key to be released once contracts are exchanged and a completion date has been set, as this is a binding commitment between both parties.
   The vendor will normally require a deposit of 10% of the purchase price to be paid on exchange of contracts as security. You will also have to agree to only use the key for certain purposes, i.e. cleaning, decorating or carrying out any repair work and that you will not physically move into the property until the completion date. This undertaking should state that you will be responsible for payment of any services you use during the time you have the key, such as gas or electricity. You will also need to make sure the property is adequately insured, as it will be your responsibility from exchange of contracts.

I am buying the carpets in my new house. Should I pay the vendor directly or go through my solicitor?

To avoid any confusion, your solicitor is likely to recommend a record be made of the sale of the carpets in the contract for the house purchase. If this is agreed then, on completion, the money for the carpets should be paid to your solicitor who will in turn pay the seller’s solicitor. The record in the contract will ensure there are no misunderstandings between you and the seller about the agreed price or which carpets are being purchased.