First things first—see a solicitor

Press, 22 September 1977, Page 7

First things first—see a solicitor

First see a solicitor — that is the advice of a man who knows as much as anyone about the real estate market to young couples considering buying a home. Gilbert Kissell. the president of the CanterburyWestland branch of the Real Estate Institute, has seen innumerable would-be buyers disappointed because their hopes were set unrealistically high. Had they seen a solicitor in the first place, he says, they would have saved themselves a lot of trouble. A solicitor, once he is acquainted with your financial and other circumstances, can quickly assess what kind of house or flat you can afford, and which kind of mortgage application is likely to succeed for you.

Mortgage money, at the moment, is scarce. If you do not qualify for a loan from any of the recognised lending institutions, such as the Housing Corporation, the savings banks, or building societies, you may find that you will have to arrange one privately through a solicitor, in which case it will probably be at an interest rate of 12 per cent and renewable after three years. The shortage of mortgage money has meant that the real estate market has slowed down in the last few years. In the boom period of 1973-74 an estate agent was usually able to assure vendors that a house could be disposed of in a month or two; now it can take

much longer, especially in the lower price range. Some house owners who bought property in the less popular areas when finance was readily available have had to accept less than their purchase price when it has become necessary for one reason or another to sell. There is still a steady demand for houses in the medium ($30,000 to $40,000) range.

What has brought about the shortage of mortgage finance? Largely, Mr Kissell thinks, the lifting by the Government of the limit on the interest that finance houses may pay on invested funds. Understandably, with 20 per cent interest available from such investments few are willing to put their money into house mortgages for a return of, say’, 10 per cent. Mr Kissell has two further pieces of advice for young buyers: if you are a two-income family commit yourselves to spending only the husband’s income: and, unless you have the funds to pay for repairs and renovations, make sure Hhat the house you buy will not in the near future require any maintenance that you cannot do yourselves.

Many a couple has thought itself well able to take care of a mortgage, then, with the arrival of a child for some other reason has had its two incomes reduced to one and has run into trouble. Almost every instance of a mortgagee foreclosing on a loan has arisen from such a situation, Mr Kissell has found.

It is easy enough for potential buyers to tell whether e house or flat will need costly repairs. The signs of a lack of maintenance will be obvious: do the floor boards creak and move when you walk on them? Are there any signs of borer in the

woodwork? Do the windows open freely? Are there any warped doors? Are the floor coverings adequate? How are the ceilings? A real estate agent will gladly inspect a house with you and give his expert Opinion.