Selling a Home21.06.2016
Key considerations when buying or selling your home, a 10 step guide
It is often considered to be one of the most stressful periods of your life, when you are buying or selling your home. If you haven’t done it before, or for a number of years, it can be a complex and daunting task.
It is therefore important to understand the timescales, procedures and stages which will be involved.
1. Choose the right team
Whilst it can be stressful, many people forget that moving house can also be a very exciting time, a new chapter opening up on your life. Getting the right team on your side from the beginning can help to make the whole process run much more smoothly. The right choice of solicitors, financial advisor and estate agents can have a big impact on the whole process. Don’t feel obliged to use the recommendations of the estate agent when it comes to finding a solicitor or mortgage lender, as many of them have a business relationship with the agent, you can choose your own independent advisors.
There will be a number of costs involved with moving. You should always seek independent financial advice with regards to buying or selling. Finances are probably the most important factor and lenders are much more tough in their decision making. Don’t forget to take into account a number of other costs which may include:
- Solicitors fees. Contact a solicitor to find out what their legal fees are in respect of the sale and purchase. Price can dictate the service you get, the length of time it will take and also the quality of advice you receive, especially if your home may be more unusual in its age, characteristics or due to the locality and types of survey which are required.
- If you are selling a property, get an outstanding figure on your existing mortgage if there is one and check if you have any early repayment charges to pay.
- Also if you are selling a property, always try and obtain three different valuations from estate agents and choose one that really knows your property type and area, so you can get a more accurate average sale price that may be achieved.
- If you are buying a new home, discuss with your financial advisor affordability and mortgages available to you that fit your circumstances, and the property you may wish to buy. If you are a first time buyer, there may be government help that you can quality for.
- You will also need to consider the costs of insurance such as, buildings and contents insurance cover and also life insurance cover. You should also factor in the cost of either updating or making a Will.
3. Chain or not
Depending on where your property is located, some properties tends to sell very quickly. People are far more flexible about moving into rented accommodation if they haven’t found a property to move into or to avoid being in a long property chain with more risk of one of more of the links in the chain collapsing. Decide if you will be tying in a related purchase transaction immediately, or whether you would like to rent accommodation for a short period.
The benefit of renting is that you break out of the ‘chain’ and you will remain in a good position for sellers when you find a home you want to buy. However, many people see renting as ‘throwing money away’, unsettling for family members and if you have pets, it may make it more difficult to find a suitable property to rent. It will of course increase the overall cost of the moving process. Renting however, isn’t suitable for everyone and many clients tie in an onward purchase, whether up or downsizing.
4. Estate agent or sell it yourself?
You don’t have to use an agent, there are many options available to you.
- Do it yourself: You can avoid all agents’ costs which are usually a percentage of the sale price by putting the house on the market yourself. This means you will have to organise viewings, bids, and deal with the paperwork. You can save yourself a considerable amount of money and if your house is in a very saleable area such as a good school catchment area, you may find this is a very straightforward option.
- Single estate agent: Do your homework and choose the best estate agent for your property type, in your area. Don’t just choose an agent who puts the highest value on your property, as it may languish on the market with no interest and you could be tied into them for several months which will completely slow the process down.
- Multiple estate agents: This can help increase the number of possible potential buyers and may be useful if you need to sell your property quickly. If you choose two agents, they typically split the commission but you may end up paying a higher commission.
- Online estate agents: An online estate agent may be an option and they are certainly cheaper, however you will do much of the work as a lot of online agents expect you to conduct your own viewings. They can also be very difficult to get hold of and they won’t have the detailed local knowledge of a high street firm. You may also want more help and guidance in the negotiations and the process of the sale.
5. The price is right
Look at the local housing market and get an idea of how much your property, and the property you may wish to purchase, may be worth. There are online tools which allow you to see how much properties have been sold for such as mouseprice.com This will help you to decide what figure you are likely to accept for your property and what figure you are likely to offer on a property you would like to buy.
Look at the whole package of costs you will have to pay - solicitors fees, estate agents fees, removal costs and storage and Stamp Duty Land Tax, the charges for which have changed for second homes. This could affect your budget and potentially, how much you will be able to offer on a new property. Agree a price that you would be happy to accept on your sale or a price you would be willing to pay on your new property and stick to it. This will help with budgeting and your affordability as if moving to a new property your monthly utility bills may be higher each month.
6. Accept an offer
In order to sell your home, you will need to accept an offer. You may receive several offers and prospective buyers may be cheeky and offer well under the asking price. Don’t panic but stick to your guns if you have a price in mind that you simply cannot afford to go under, but also make sure this is realistic. When you receive an offer that you are happy with, formally accept it and that will begin the moving process. A formal acceptance of an offer is not legally binding, and you could still be open to accepting other offers, however many buyers will insist that the property is ‘taken off the market’. If you receive multiple offers your estate agent may ask buyers to submit their highest bid or best and final offers. It is important to look at the position of the prospective buyer and how quickly they can move, not just how much they are offering.
8. Negotiations and exchange of contract
Firstly, negotiate exactly what will be included in the sale price. Some sales can collapse because a buyer or seller really wants to hang onto something, but ask yourself is it really worth the deal falling apart for a pair of curtains? This will also be the time when you should conduct an official building survey if you are buying a property. If anything is revealed on this in terms of required works or repairs, you should consider negotiations with the buyer or seller. Again this can often cause a deal to fall apart so if you are buying an older property for example, you should factor in that it may need considerable or expensive repairs. Depending on the type of survey which has been carried out, will determine the level of detail you receive. A full structural survey should guarantee you get a ‘warts and all’ report on the property.
When exchange of contracts has taken place, you are legally committed to the sale or purchase. Your conveyancer will check with you prior to exchanging contracts that you are happy to proceed and whether you have any final queries in respect of the sale or purchase. After exchange should you decide to pull out of the sale or purchase, there will be significant financial implications. Your solicitor should also advise you as to which insurances should be in place.
9. Money matters
Monies required from you by your solicitors should be made available at the very latest, one day before legal completion. They will need to be cleared funds. Your solicitor will deal with ordering mortgage funds in time for completion and repaying any existing mortgage/s. Your solicitor will provide you with details of all the costs associated with regards to the sale or purchase in a completion statement, shortly before exchange of contracts.
10. Completion day
Legal completion of a sale or purchase occurs when purchase or sale funds are received by the sellers’ and buyers’ solicitors and the keys are made available for collection by the new owner, typically from the estate agents. The legal deeds for the property are also transferred between the two parties’ solicitors, and your solicitor will register your purchase at the Land Registry accordingly.
You may be surrounded by boxes but you can sit back and relax, a new chapter of your life awaits you!
Alan Williams can be reached at [email protected]