Buying a house is the single most significant investment most people will ever make, so ensuring that it goes smoothly means putting trust in the professionals.
Mortgage advisers play a key role in helping their clients with the critical task of finding the right mortgage.
But securing a mortgage is only part of the process. Homebuyers – especially those who are new to the market – should also be made more aware of the potential risks involved in buying a house.
Fraud, for example, is on the rise. In a recent report by the National Fraud Authority, fraud in the UK reached £73 billion annually, of which £1 billion is attributed to mortgage fraud.
Homebuyers can’t always rely on sellers to tell the truth. This can be a significant problem for both lenders and homeowners, with potentially expensive and stressful consequences.
Similarly, issues such as boundary disputes and lack of planning permissions and building regulation consents, can cause equal distress and cost for homebuyers.
The real problem with these risks is that they are difficult (and sometimes impossible) to uncover, regardless of how careful and diligent estate agents, mortgage brokers and solicitors are.
Nobody would ever go on a ski trip without travel insurance or buy a vehicle without a warranty. Nor should they enter into a house purchase without considering what might go wrong and how they might protect themselves against the risks.
Homebuyers would do well to consider the pitfalls involved in conveyancing. Likewise, professional advisers, such as solicitors and mortgage brokers, should ensure they offer their clients best advice on how to protect themselves.
There are, for example, good value insurance options that offer greater protection than the standard Professional Indemnity Insurance cover.
Providing your clients with the right advice could make all the difference between them enjoying a positive house buying experience and suffering an unhappy one.
Phillip Oldcorn is senior vice-president at FAF International, a trading style for First Title Insurance in Europe and Turkey.
