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The MortgageLab

Getting a Decision in Principle

You know your budget and have found a property that suits you and your needs, so what are the next steps? You now need to get a decision in principle from the lender (showing that you have the funds to buy a property) and make an offer. The process is slightly different depending on where you live, so we’ve detailed all approaches in this section.

Once you’ve talked to your First Mortgage advisor and gone through your budget and aims for a mortgage, you’ll leave with a mortgage in principle, also known as a decision in principle. This is a confirmation from the lender of whether and how much they will lend to you. It’s a guide for you as to what you can afford and reassurance to a seller that you have the funds available to purchase their property. You will also need proof of how much you can spend before you can put in an offer on any property in Scotland.

Making an offer on a property

England, Wales and Northern Ireland – make an offer through an estate agent
Once you have found a property you like and that works for you, you will need to make the seller an offer through their estate agent. Make the offer over the phone or in person, and follow up with the offer in writing. You can make your offer subject to survey (STS) which means that it might change following a survey that identifies problems requiring work. You can also make your offer subject to contract (STC), which means that the final sale will only take place when lawyers have exchanged legally binding contracts.

If your offer is accepted, ask for this to be confirmed in writing and for the property to be taken off the market straight away. This prevents it being viewed by another possible buyer who may then make a higher offer (known in the business as gazumping).

Scotland – make an offer through a solicitor
If you see a property you like in Scotland, your solicitor will register a notice of interest on your behalf. This means that you will be kept up-to-date on anything relevant to the sale of the property, such as when a closing date is set. Properties in Scotland are usually marketed as fixed price or offers over (the minimum the seller will accept) and the process is usually for interested parties to register their interest and then, should they still wish, submit a sealed bid on the closing date of the property.

When you have found a property you would like to purchase your solicitor will make an offer in writing. It will be one that you decide on based on its condition, the property market and what you can afford, on or before the closing date of the property. The seller will usually review all the bids on the same day as the closing date and decide which bidder they will sell to.

If your offer is accepted, the seller’s solicitor issues a qualified acceptance, which means that the property will be yours if contract details can be worked out. The solicitor will also hand over information about the property such as the title deeds and planning papers. Go through everything you receive with your solicitor as they may raise queries about the paperwork. Neither you nor the seller is committed yet but as all the bids have been considered on the same day, gazumping is far less likely.