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Complex legal issues are involved. It is important to understand the process and to know your rights to ensure you get the best possible value for your money.

If you’re a first time buyer - or seller - you may find property transactions costly, confusing and long-winded.

Complex legal issues are involved. It is important to understand the process and to know your rights to ensure you get the best possible value for your money or price for your property.

This guide outlines the main issues. But it can only act as an introduction. More information can be obtained from a chartered surveyor.

The Roller Coaster

The state of the market plays a major part in a decision whether or not to buy or sell. Many people have to move because of job relocation or a growing family. But for those under no pressure to move, the state of the market may influence a decision to buy or sell at a particular time.

There are huge regional variations in house prices and in the number of buyers and sellers who are active in the market at any one time - and every home has its good and bad points.

In the early 1990s, the housing market was burdened with high interest rates. Job insecurity and a depressed economy stopped many people from moving. Many decided to rent rather than buy. Across the UK house prices fell, leaving many homeowners with mortgages higher than the value of their property (negative equity).

Some, unable to meet mortgage payments, had their homes re-possessed.

By the mid-1990s, inflation was falling and so, too, were interest rates. The ratio of house prices to earnings was at its most favourable level for 30 years and improvements in the economy created the climate to bring buyers back to the market.

But sellers were slow to gain confidence and a shortage of supply started to increase prices. As a result of the renewed interest in the housing market, and subsequent price increases, there has been talk of a return to the property 'boom' of the late 1980s. But the dramatic price rises seen in 1996-7 have not yet been matched.

But the unique nature of every home will always mean that buyers and sellers will need to proceed with caution - and professional advice.

Choosing the right property for you

The first step in choosing the right house or flat is to decide what you can afford. Next, decide where you want to live. Many property experts consider this the most important factor, hence the expression ‘Location, location, location’.

There are many issues to consider: transport and travel costs, local schools, shops and the character of the area.

It is also important to decide upon the age and size of the house you would like. Older houses are likely to cost more to maintain and may need some renovation, but may hold more appeal due to their character and design.

New houses require less maintenance and will (usually) come with a set-term housebuilders' warranty. It is also important to consider how easy the property will be to resell.

Financing Your Purchase

Most homes are bought using a mortgage. Banks and lenders are in competition for your business and there is a vast selection on offer. Most lenders will agree a mortgage offer in principle before you find a suitable property and many potential buyers prefer to have such an offer in place before they start to look at properties.

Viewing a property

When viewing a property there are several important issues to consider - position of the property, its aspect, the immediate area and amenities:

Is the property attractive to you?

Does it look well maintained?

Are the gardens the size you are looking for?

What is the condition of nearby properties?

Are the rooms the size you require?

Once you have viewed a number of properties, go back for a second look at the ones that interest you before making a decision.

Visit at different times of the day and night and on different days to find out if there are off-putting factors. For example: is the property near a busy road or under a flight path?

Before making an offer, check what the price includes. Usually - unless specifically excluded - all items such as buildings, fixtures and fittings listed in estate agents’ details will be included.

Furniture and effects are usually excluded unless they are specifically listed.

The process from offer to completion

To avoid arguments and cover potential future legal changes, any offer to buy should be made ‘Subject to contract’. This means that a sale has been agreed provisionally but is not yet a legal contract; either buyer or seller may back-out of negotiations without giving a reason or facing financial penalties.

Once an offer has been accepted the following steps must be taken before completion:

Inform your solicitor, or licensed conveyancer, so local authority searches and pre-contract enquiries can proceed

Arrange a mortgage or ensure you have funds available from another source

Instruct a chartered surveyor to inspect the property

Once your solicitor is satisfied with the title (the seller's ownership and right to sell), you are satisfied with the condition of the property and finance is agreed, contracts can be exchanged

This should be timed to coincide with the sale of your current property (if applicable) otherwise you may need a bridging loan from your bank: very expensive

Gazumping & Gazundering

If you put in an offer to buy a property that is accepted, but the seller continues to allow others to view and then accepts a higher offer, you have been ‘gazumped’. This happens in a rising market where too many buyers are chasing too few properties.

Current legislation does not protect buyers against this practice. It is therefore ‘legal’ but many find it morally reprehensible.

Gazundering occurs in a falling market when, before exchanging contracts, a buyer offers a lower price than his or her original offer in the hope the seller will accept rather than lose the sale. Again, although unethical, the practice is not illegal.

Valuations & Surveys

Lenders are required to undertake a valuation before making a mortgage offer on a property A valuation is not a survey, it is an inspection undertaken for the purpose of deciding on the amount and terms of any loan. Buyers can expect to pay for a valuation and are usually given a copy.

The extent of the inspection is limited when compared to a survey and buyers should not rely on the information provided by a valuation when deciding on a property.

Surveys

A survey by a chartered surveyor gives the buyer a professional opinion about the property. It should be done before entering into a contractual commitment. Where defects are found, the purchase price can often be renegotiated to reflect necessary repair work.

A building survey gives a full picture of construction and condition. It is likely to be needed if the property is, for example, of unusual construction, run down or extensively altered - or where a major conversion or renovation is planned.

It is usually tailored to the client's needs. A building survey includes extensive technical information on construction and materials as well as details of any defects, major or minor.

Advantages to buying new:

New properties require less maintenance

The regulations that apply to new homes require a high standard of insulation

Almost all new homes have a National House Building Council certificate that acts as a 10-year guarantee against structural defects

Many new homes are sold with fitted kitchens, bathrooms and floor coverings included in the asking price

Ask your solicitor to:

Check with the local authority that the house has planning consent and has been constructed to planning permission guidelines.

Check if the property has been built on contaminated or filled land. If this is the case, ensure it has been properly dealt with.

With the housebuilder:

Check for National House Building Council certificate.

Check test certificates for electrical or gas appliances.

Check final certificate of the local authority building inspector.

Like new cars, new houses often sell at a premium. Remember, their value may drop a little before moving into line with the local property market.

More information available in Moving Home, Your Home