Selling your home often heralds a change in your personal circumstances - upsizing to accommodate a growing family or downsizing when children leave home or a relationship breaks down. Selling your home can be both exciting and stressful, but proper preparation and using the assistance of experienced professionals can help the process go much more smoothly
Using an estate agent
You don’t have to use an estate agent to market your home, but doing so will usually attract more potential buyers and make selling your home less time-consuming, and easier. Local estate agents will value your home for you in any event. Ideally, get at least three valuations.
Consider which agent to instruct. This is a judgement call, but there are practical questions you can ask. For example, if potential buyers could come from outside the area, is the agent national, and/or will they be able to market your home effectively on the internet? How many properties like yours have they marketed in the last twelve months, and how long did each sale take? What was the original asking price in each case, and what did it eventually sell for?
Estate agents will charge you a percentage commission. Check their terms of business carefully. If you use more than one, each may claim their commission when your home is sold, even if only one is responsible for introducing the buyer to you.
Getting ready to market your home
Make sure you are showing off your home to best advantage, for the best price. These include:
- Getting rid of clutter and excess furniture, so potential buyers can imagine their own furniture in the house, and themselves living there.
- Tidying up scruffy interior decoration, fixtures and fittings - especially, paint the front door, and scruffy walls and ceilings and replace broken tiles and windows.
- Ensuring the kitchen and bathroom are clean and clutter-free.
- Tidying up messy and cluttered gardens.
- Pulling curtains to provide plenty of light during the day, and turning lights on at night - often table and standard lamps so the house appears cosy and welcoming.
Provide your estate agent with spare keys so they can show buyers around, and allow buyers’ surveyors access.
You will also need to obtain an Energy Performance Certificate (EPC). You will have to provide a copy of your EPC to prospective buyers. Your estate agent may be able to arrange this for you as part of their service. Alternatively, you can find an accredited energy assessor on the EPC register website.
Investigate the availability and costs of removal firms, but do not book them until the completion date is known - usually on exchange of contracts.
Using a solicitor
You can do the legal work yourself when you sell your home, but this can be dangerous unless you know exactly what you are doing. Most sellers instruct a solicitor to act for them. Make sure that your solicitor specialises in residential conveyancing.
Most solicitors will send you a quote, containing a breakdown of their charges, search fees, etc, on request. When you instruct them, your solicitor is also obliged to send you a letter explaining the service you will get, including exactly how their charges are calculated.
Your solicitor is obliged to ask for proof of your identity before they can carry out any work for you - eg a passport and recent utility bill. You will have to go to their office personally. You may also have to pay a sum on account, especially if you are also using your solicitor to purchase another property at the same time. This money is used by your solicitor to pay for such things as initial search fees on your behalf.
The legal process
Your solicitor will ask at the outset for your mortgage account number and details of your lender, so they can:
- apply to the building society for the deeds to your home
- query approximately how much is outstanding on your mortgage, that is, what will have to be repaid on completion
If you do not have a mortgage, you must deliver the deeds to your solicitor yourself - either personally or by some other secure method.
Your solicitor will also ask you to complete a Seller's Property Information Form and a Fixtures and Fittings List showing what you will leave behind, and what you will take, when you leave. They will also need copies of documents that relate to use of the property, eg damp, timber wiring and other guarantees, documents relating to rights of way, etc. and a copy of the EPC for the property.
This will enable them to prepare and send to the buyer’s solicitor:
- a draft contract
- replies to standard questions about the property, eg who is responsible for services, rights of way, access, whether there have been any disputes with neighbours, etc
- If the property is leasehold:
- copies of the lease
- three years’ management accounts showing, eg how much tenants have had to pay for services, etc
- a copy of the buildings insurance policy
Potential buyers may make an initial offer, which may be lower than your asking price. They may be taking into account any repairs or other work they think they will need to carry out or they may simply be offering less as a negotiating tactic. They may also reduce their offer later, when they have seen their lender’s valuation of the property and/or their survey. Buyers and sellers usually end up agreeing a price between the asking price and the offer.
Make sure that you accept any offer ‘subject to contract’, so that you are not immediately bound to sell your home at the price agreed.
Your estate agent will offer you advice on price - although bear in mind that agents become entitled to their commission when you exchange contracts. Some agents may therefore recommend that you exchange at a lower price now rather than hold out for a higher one in the future.
Getting ready to exchange contracts
Exchange of contracts is when your solicitor and the seller’s solicitor exchange two identical contracts, one signed by you and one by the seller. On exchange you become legally bound to buy the property (subject to any special terms in the contact that allow you to withdraw) so it is vital that you understand what you are committing to.
Once you have a potential buyer, your solicitor will negotiate the contract with your buyer's solicitor and reply to any legal enquiries raised. They may need to refer additional enquiries to you if the answers are not evident from the paperwork. Buyers usually pay a sum on account of the full purchase price - sometimes up to 10% - when you exchange contracts. If the buyer pulls out for a reason that is not permitted under the contract, you can keep the deposit, and may also be entitled to compensation from the buyer. Take advice if the buyer tries to negotiate a reduced deposit on exchange or to dispense with it altogether.
You will need to agree a date and time for completion, when you must have emptied the property and moved out. This is usually between midday and 2pm on a Friday so that your removal firm can have emptied the house and the new owners have the weekend to sort themselves out. This date and time will go into the contract as binding commitments. Failure to complete then will be a breach of contact and you may have to pay damages. It’s possible to exchange contracts and complete on the same day, but there is usually a gap of several weeks to give you and the seller time to make arrangements for the move.
If you are also buying a new home, your solicitor will make sure that the two transactions are tied in - this usually means the same completion date for each transaction. Once the contract is agreed, your solicitor will ask you to sign it in draft, ready for exchange.
You will need to insure the property from exchange. Arrange insurance.
Often the buyer’s solicitor will also have drafted a transfer document at this stage. If it is ready, you can sign that in draft too.
Your solicitor will:
- receive any buyer's deposit on your behalf
- ask your lender for a redemption figure – the amount required to clear your mortgage - calculated to the date of completion
- ask your estate agents for their invoice for settlement at completion
- organise a final account for you, showing the balance of the purchase price left after deduction of your mortgage repayment, and all costs and expenses
If more money will be needed from you at completion, your solicitor will ask for this in advance, at least one working day before completion is due.
If any money is due to you, they will ask for your bank account details so they can transfer it to you on completion. They will also need any new address.
Between exchange and completion
Your solicitor will:
- arrange for you to sign the transfer document, if you haven’t already
You will need to:
- book removals
- make arrangements to hand over all keys on completion
- sign the transfer document, if you haven’t already
Your solicitor will:
- receive the purchase price
- tell you when you have completed - do not hand over any keys until your solicitor does this
- pay the sum outstanding on your mortgage
- pay your estate agent
- deduct the firm’s legal costs and expenses from the purchase price
- credit any net sale proceeds to your bank account
- send the signed transfer and any other deeds to the buyer’s solicitors
- reassign life assurance policies, if appropriate
You will need to:
- Empty the property, save for those things you have agreed to leave behind. Do not leave any personal belongings or rubbish.
- Take meter readings and notify your local authority, gas, electricity, water, sewage, telephone, milk, papers and other suppliers on the date you leave the property, when your liability ceases. It is usually better to ask them for a closing statement than agree with the buyer that you will pay an apportioned part of the next bill.
- Notify any bank, building society, credit card company, insurers, AA/RAC, doctor, dentist, advisers, etc that you have moved. You can ask the Post Office to redirect post automatically for a period.
Getting stuck in a chain
Often you need to have sold your existing home before you can afford to buy your new home. Your buyer and/or your seller may be in the same position. So might their buyers and sellers. They are all in a ‘chain’ so that, if one sale or purchase is aborted, every other buyer and seller is affected.
Chains can be very stressful and time-consuming as your purchase may have to be aborted because of actions further up or down the chain, over which you have no control.