Selling a property often involves difficult and complex decisions. Get them right and you can save yourself some money… getting them wrong can prove costly.
To sell or not to sell?
- There are lots of potential reasons for moving. You may need to move to get closer to work or perhaps for schools. Often family circumstances change – most often marriage, babies, separation, children moving out or bereavement.
- Sometimes this will create the need for more space. Moving is certainly an option. However, you may also wish to consider an extension or loft conversion. This may be a more cost effective option.
- A good estate agent can give you advice on moving costs to include stamp duty, legal fees, surveys, selling fees and other associated costs. They should also be able to advise on the extension potential of your existing home and explain the probable costs involved.
- Property prices are subject to change. You will need to take advice on the local market conditions and, if you are relocating you will also need to research the market in the area you are moving to.
- Affordability is always a key factor in any move. You will need to take advice on your ability to finance a purchase. There will be many questions to answer: do you have spare funds, will you need to release the equity in your existing property, how much can you comfortably afford to borrow, what is the best mortgage deal for you and more besides.
- Many homeowners now find that it is preferable to rent out their property rather than selling it. Your estate agent should be able to advise you on your options so that you are able to make an informed choice.
- If you intend to sell your property and have an outstanding mortgage you will need to let your lender know.
- The outstanding mortgage loan will need to be repaid and there may be charges to redeem the mortgage.
- Best advice is to consult an Independent Financial Advisor to check your arrangements at an early stage.
- You should also arrange some market valuations of your property – usually from three different estate agents
- These appraisals will give you an idea of the possible sale price and you can use this to calculate how much equity you will have left after you have repaid your mortgage.
- Your estate agent and/or financial adviser can provide you with a guide on moving costs, such as selling fees, stamp duty, surveys, legal and removal costs. If you will bebuying another property, these costs would normally be deducted from the equity figure mentionedabove, leaving a balance that can be put towards the purchase.
- If you are intending another purchase, you will need to decide whether you will need a mortgage and, if so, it is highly advisable that you should speak to an Independent Financial Advisor to establish the amount you can readily afford to borrow.
- We recommend these steps to be taken at an early stage. The estimates provided will help you to establish an approximate value for your property, you will gain an overview of the associated costs and roughly how much they are likely to be, giving you a good idea of the amount of your own money you will have available and also the amount you are able and willing to borrow.
- These steps all take time – the earlier you start planning, the better prepared you will be.
- For example, lending criteria are very strict and the process involved is complex and usually time consuming. Getting formal approval will usually take several weeks at least.
It’s a ‘chain thing’
- Most sellers prefer to coincide their purchase with their sale – this is commonly called “a chain transaction”.
- In such a transaction, if your buyer decides not to proceed, you may well not be able to continue with your onward purchase.
- Similarly, if your seller opts to withdraw, this may in turn have consequences for your sale.
- Be assured, most chain transactions do proceed, even if their are multiple sales involved.
- Nevertheless, you may wish to consider “breaking the chain” by moving into temporary/rented accommodation.
- Whilst this can add to the cost of moving, it can also remove uncertainty.
- Time pressures may also be reduced as a consequence, and your buyer will also appreciate the added certainty and commitment.
- When a seller is linking the sale to a purchase it is not uncommon for the seller to agree a lower figure for their home in order to secure a preferred onward purchase.
- By opting to move to rented accommodation, a seller has “time on their side” with no pressure to take a low price.
- Similarly there will be no need to rush into a quick decision to buy a property that does not measure up to expectations.
- Once in rented accommodation, with your house safely sold, you will be in a very good position to buy, sellers will be keen to sell to you and you may even be able to secure a property at a reduced figure.
Selling? How to get the job done
- Most sellers use a local estate agent. You can also choose an online agent or even opt to sell yourself – a private sale.
- In any event, you should conduct some research.
- Some typically crucial questions will be which estate agents sell your type of property, how quickly do they sell them and who gets the best prices compared to the original asking price?
- If you sell with an estate agent, consider the benefits of instructing a sole agent as opposed to appointing two or more estate agents on a multiple agency. There is a clear and decisive distinction here. Please make sure you have the full picture before entering into any kind of multiple agency agreement.
- Ask estate agents to confirm their fees and compare the services being offered. Not all estate agents are the same. Whilst the most expensive may not be the best and the cheapest may not be the worst, like most things in life, the price you pay reflects the service you receive.
- You could consider an an online agent. They are becoming more popular yet still sell less than one in twenty of all properties sold – probably because traditional agents are effectively online agents anyway and offer a more local service with an “on the spot” presence, local knowledge to match and,crucially, a proven track record.
- However, if a cut price for a trimmed down service approach appeals to you an online agent could be worth considering. Rather like the private sale option, you will need to be more “hands on”.
- And if online does appeal to you then what about “going all the way” – a “DIY” private sale means no fees at all, but… you will need to “roll your sleeves up” have bags of spare time and plenty of tenacity. If you do take up the challenge, more than likely you will discover that having the “patience of a saint” is also a virtue.
- So now you have your options here is some advice to consider to help you make a decision that best suits your objectives – based on an assumption that you will want to maximize the amount of money you achieve from your sale, whilst reducing the time spent doing so.
- Online agency or a private sale both mean reduced fees, but they may not mean reduced costs, either monetarily or in time spent.
- Your local estate agent will take over the responsibilities for you. Choosing a full service, experienced local agent with a proven track record, is the choice most likely to produce a positive end result, and will save you considerable time in the long run.
- Crucially, they are experienced negotiators, who know the local values. If you choose a long established local agent that can prove they have sold lots of properties like yours they will have the power in their conversation to reassure prospective buyers that they should pay the proper market value for your home.
- Online agents cannot do this for you as they are still very new to the market and are therefore untried and untested. In effect they are an experiment. Little wonder they account for less than 5% of the market – most homeowners are not yet ready to be “guinea pigs”.
- By the same token, should you opt for a private sale, you will be venturing into the unknown, and whilst you will be avoiding fees, you will also be taking a chance, risking a sale at a lower price that may ultimately represent a far greater loss compared to an estate agents fees.
The price is right
- Along with choosing the right agent, getting the price right is the most important factor in a successful home move
- You could try to establish your own approximation by carrying out some research online to see if any similar properties have recently sold.
- Crucially you need to get expert advice from agents who you know regularly sell properties like yours.
- These agents know the prices being paid and, because they sell properties like yours they will know the buyers who are looking for similar properties and what they are likely to pay
- Some agents do not provide valuation advice, preferring to either ‘bid’ foryour business by quoting a high figure, or simply agreeing to market the house at whatever figure you choose.
- Our advice is to listen carefully to how the agent presents their case and to make sure they are able to provide examples of the properties they have actually sold themselves. This is important since agents will often show you examples of what has been sold locally without explaining that the sales were actually achieved by other local agents!
- Estate agents who know the local prices and have in depth knowledge of the sale of comparable properties are able to reassure buyers who are cautious about the amount they offer, makings sure that sellers do not have to needlessly reduce their price, often saving clients many thousands of pounds.
Presentation is everything
- Buyers consistently pay more for a well presented home – the modern jargon is “home staging”
- Ask your estate agent to advise you on what you need to do to create the very best impression. In most instances, a really good tidy up, declutter and clean is all it takes. Perhaps some redecoration here and there, maybe fixing a damaged window and crucially, replacing any missing or defective light bulbs.
- When potential buyers are viewing, if you have any dogs, best to either take them for a walk or pop them somewhere out of the way.
- Clean your bathroom, your kitchen work surfaces and cooker. Plump up your cushions, dress your beds, tidy away the washing up, children’s toys and any laundry.
- Turn on the lights and lamps, Other tips like lighting the fire, baking bread or making coffee are subject to preference. The idea is to make your home as welcoming and inviting as possible – you only get one chance to impress, so make the most of it.
Making sure the sale runs smoothly
- Appoint a good solicitor or conveyancer at an early stage. You will probably want to get several quotes, and once you appoint a firm they will need to carry out time consuming due diligence checks before they can act for you – better to get this done before you find a buyer and/or secure a property.
- Believe it or not, it is not uncommon when a sale is agreed, for this process to take a couple of weeks, creating a frustrating delay when everyone is keen to “get on with it”.
- Instructing a good solicitor or conveyancer early, will not cost you any more – they will not do any work until a sale and/or purchase has been arranged, but it will save you time.
- Be wary of instructing solicitors or conveyancers who pay the estate agent areferral fee for recommending them. A good estate agent should only make recommendations on the basis of the quality of service that will be provided.
Paperwork is important
- Your solicitor/conveyancer will need you to complete a number of forms providing information that will be required by the buyer, their solicitor and any lenders
- Ask for these early in the process and get them completed as best you can as soon as possible. Again, it may surprise you to learn that these forms are often not dealt with until very late in the transaction process, causing unnecessary delays and unwanted stress.
It’s time to agree the sale
- All offers made for your home must be submitted to you in writing by the agent. It is a legal requirement, even if the offer is very low.
- Once an offer has been negotiated that you are willing to accept you should instruct the estate agent to take the property off the market. You will expect your buyer to stop looking at other properties and likewise they will want to know that you are not showing over any more buyers.
- Remember – nothing is legally binding until you have exchanged contracts, you, your buyer and anyone else involved if there is a chain transaction can change their mind.
- If you have taken steps to pre-instruct a good solicitor or conveyancer and completed forms in advance of offer acceptance your sale can get off to a prompt start, a key ingredient of a successful transaction.
- An important part of the process is likely to involve your onward purchase, unless you are only considering a sale transaction.
- If you are planning to buy, you should by now have researched any additional finances required, such as a mortgage, identified a potential purchase or at least investigated possibilities and instructed your solicitor as to your preferred timescales for moving.
- If you are intending to buy, you will also need to instruct a surveyor to inspect the property on your behalf.
- Similarly, your purchaser will need to submit a mortgage application, if appropriate, arrange a survey and appoint a solicitor.
- If a mortgage is required by your purchaser, the lender will arrange a valuation survey, paid for by your buyer. This is usually carried out within a month of the sale being agreed.
- Different lenders process their applications at very different speeds. Patience is definitely a virtue.
The terms of the agreement
- In the meantime a draft contract will be prepared by the selling solicitor. This will detail numerous key matters
- It will confirm any fixtures and fittings that are to be included in the sale and whether a separate price has been agreed.
- It will specify the time gap between exchange of contracts and completion (the moving day).
- This is usually between 7 and 21 days. It is occasionally less than 7 days and sometimes can be up to 28 days.
- It is even possible to agree a simultaneous exchange of contracts and completion in appropriate circumstances.
- At the other end of the scale, very occasionally deferred/delayed completions are agreed to suit specific requirements of one or both parties.
Making it legal
- When all parties are agreed on all legal matters, buyers have paid the required deposits (up to 10% of the purchase price) and a completion/moving date has been agreed, the solicitors/conveyancers will exchange contracts on behalf of their clients.
- This commits everyone to proceed with the transaction – it is now legally binding.
- Any party withdrawing will forfeit their deposit and is liable to be sued for breach of contract
- This is an exceptionally rare event – in our experience occurring “as often as pigs flying past a blue moon”.
It’s moving day!
- Make sure you have your removals prepared well in advance. Get some quotes, check the firm you choose has good availablity and don’t commit to any costs until you have exchanged contracts.
- You must move out of your property no later than the day of completion – usually into your next purchase, or perhaps temporary/rented accommodation.
- You will need to ensure that any items included in the sale contract remain in situ at the property.
- All other belongings must be removed and it is expected that the house will be left in a clean and tidy condition.
Moving the money
- Moving day is also completion day – completion is the legal term for the actual ownership change – this happens when the money is received from the purchaser by the seller via their respective solicitors
- The keys must not be handed over until the sellers solicitor confirms that the money has been received in full
- This usually occurs around the middle part of the day.
- The appropriate legal documents including the title deeds are then passed from the sellers solicitor to the purchaser’s solicitor
- The sellers solicitor must now apply to the Land Registry to arrange the transfer of ownership, recording your purchasers as the new owners
More Money Matters
- If you have a mortgage in respect of your property upon completion of the sale any outstanding balance must be paid back to the lender – this is known as redeeming your mortgage
- Prior to exchange of contracts your solicitor will have asked for details of your lender, including your mortgage account number.
- They will contact the lender to request a redemption figure – the amount required to pay off your mortgage
- The lender will supply this figure to you and your solicitor so that you can “do your sums”.
- The seller’s solicitor will prepare a statement of account, making sure you will have sufficient funds to meet any other obligations including any onward purchase and stamp duty together with the payments for legal and estate agents fees as appropriate.
- Upon receipt of monies on completion from the buyer the seller’s solicitor will redeem any outstanding mortgage and settle other payments as required.
- If this includes an onward purchase the seller’s solicitor will forward the purchase monies onto complete the purchase including, where necessary, any new mortgage funds that may have been arranged.
- Any remaining balance will be forwarded to the seller together with a statement confirming all disbursements.