Selling your existing home, perhaps to move to a better one, is one of the major decisions people make in life. Although most of the work is carried out by the buyer's solicitor or conveyancer, there are many things that the seller must do to make completion happen as soon as possible (which we will get to later).
A lot of matters are at play when selling your home. For example, the timing should be right, you should be aware of how much money your home will go for and what it will cost to sell, and which estate agent you should select to help you sell it.
Conveyancing is a demanding process.
To make this process easier for you, we have compiled the following step by step guide to the conveyancing process if you are the seller. If you are the buyer then the conveyancing process is similar but involves more work.
However, before you decide to sell your home to buy a new one, there are some important questions you need to ask yourself.
Should you be selling at all?
There can be ample reasons for your decision to move to a new home. For instance, your family may be growing and you may need something bigger to accommodate your family, or you might be relocating due to a job.
Extensions to existing home
Whatever the reason, you may first want to compare the cost of selling your home and buying a new one with the cost of adding an extension (keeping in mind that there may be restrictive covenants attached to the property dealing with the extensions or alterations).
You may be able to convert your basement into extra living space. Such renovations may even add value to your home.
Renting a new home instead of buying
Renting after putting up your home on the market can be a viable option for many sellers.
Since you will not be under any pressure to complete the sale, you will be in a stronger position to sell your house and not have to compromise on the sale price.
It will make you a more attractive seller since there will be no property chains that could hold up the conveyancing process.
However, there are some drawbacks to it, as leaseholds can be tricky. Further, the property market can be volatile and if there is a downfall, you risk your home dropping in value.
When is the right time to put your home on the market?
If you are convinced that you want to sell your home, the next big question is, “when is the right time to sell?”
The answer to this question might be dictated by matters such as whether you are planning on having a child or your job situation and financial abilities.
Aside from personal life events, you should also consider the market conditions.
Springtime is when the market is generally favourable to sellers. Further, mid-August to the end of October is also the optimal time for sellers (if there are no other market impacting events).
The steps of selling a property quickly
An amazing 30% of property transactions fall through due to delays in conveyancing. Therefore, speeding up the process where possible is vital.
1.Getting a valuation and finding an estate agent
You will want to get a rough idea of how much your home is worth. You need to be able to cover the cost of selling and paying off any mortgage on the property. The figures given to you will only be an estimate so keep that in mind.
Though you can sell your home privately, the majority use an estate agent. They are professionals who can better guide you to your options. It is always best to use a local estate agent. Conversely, you can use an online estate agent.
Whichever way you go, it would help to compare multiple estate agents based on their reviews, fees, and proactiveness.
Once you single down an estate agent, they will require you to sign a contract. You should read that estate agent's contract carefully and ensure you understand the terms.
There are some other things you need to know before sign a contract with the estate agent.
2.Figuring out your finances
If you have a mortgage on your home, you should get your mortgage paperwork out and speak to your mortgage company to check if you are required to pay any early repayment charges for switching to another mortgage lender or whether it will be possible to port your mortgage to a new property.
You may also want to find out whether you can transfer your mortgage to the new owner. You will need a novation agreement to do this.
If you are buying your new home simultaneously as selling the existing one you will be exposed to certain risks. Further, you need to arrange for the deposit and the sale price and other costs associated with buying a property.
You can use the money you receive from the sale of your existing home, but that will introduce a property chain in the transaction. The risk of one sale falling through will jeopardise the other.
Further, any person who is not a first time purchaser has to pay Stanp Duty Land Tax on any additional property they buy. However, if you sell your previous home within 3 years of purchasing the new one, you can get an exemption on Stamp Duty Land Tax.
3.Choosing a conveyancer
A seller’s solicitor or conveyancer (as the case may be) must be proactive as his job will be to handle queries from the buyer and make sure that the legal documents relating to the sale are sound and completed correctly.
A proactive conveyancer may also predict the additional queries that the buyer may have and pursue the buyer’s conveyancer frequently to make sure that the searches, surveys, and other work are advancing.
A solicitor or a licensed conveyancer
You will have to choose whether to use the conveyancing services of a licensed conveyancing firm or to hire services of a firm of solicitors. Both options have their advantages and drawbacks.
The relevant licensing and regulation for conveyancers is provided by the Council of Licensed Conveyancer.
Whereas, a conveyancing solicitor is regulated by the Solicitors Regulation Authority.
Whether you go with a licensed conveyancer or a solicitor generally depends on the breath of legal services you need. For example, the property may have a flying freehold that causes disputes with the neighbours. As licensed conveyancer do not involve in litigation, they will not be of much help to you in those quarters.
Further, you can also find licensed conveyancer that offer no sale no fee conveyancing option. Whereas, solicitors normally do not offer such option.To find out what it exactly means, read our guide, no sale no fee conveyancing.
4.Document to have handy
To do your part in making the conveyancing process smoother and faster, you need to know which documents you’ll need. A key to selling quickly is to have the documentation ready.
The conveyancing process involves a lot of paperwork and there is a list of documents you need to have handy before moving to sell your home.
For example, the law requires every home being sold to include an Energy Performance Certificate (EPC). This document provides potential buyers with information on the property’s energy use and cost.
It also makes recommendations about how alterations can be made to make the house more energy-efficient.
Once produced, an EPC remains valid for 10 years. If you have recently made some updates to your home to increase efficiency, you should get a new EPC.
There is also a hefty fine to be faced if you fail to provide an EPC at the time of sale.
Further you will need title deeds, proof of idenity, Property Information Form, or leasehold/shared freehold documents (if the property is a leasehold).
5.Preparing the property for viewings
A correctly staged house can make the difference you need to sell the property quickly and at a good price.
Fix the paint where it is cracked or repaint altogether if the need be. While you should spruce up the place, make a budget that is friendly to your pocket and stick to it but don’t skimp.
6.Accepting an offer and negotiating the deal
Your estate agent will pass on to you any offers that are made on the property. Once you accept an offer, the conveyancing process starts.
You can formally accept an offer and proceed with the conveyancing process. However, you are not legally committed to sell till the exchange of contracts.
So you are legally allowed to accept a better offer after having already accepted a lower one. This is known as gazumping.
Ask the buyer to give his conveyancer's details to the estate agent. Your agent will then send the buyer's conveyancer a Memorandum of Sale document and a provisional completion date.
During the process, the buyer’s conveyancer will carry out several searches (includiing the Local Authority Search) and some building surveys. Depending on the results, you may also have to negotiate with the buyer.
Your buyer will also have some other questions about the property, which they will raise through their conveyancer.
If you want to proceed with the sale, you will also have to negotiate with the buyer what fittings and fixtures will be included. This will be included in the Fittings and Contents Form that you will have to fill out. This document needs to be completed deligently.
7.Exchanging contracts and receiving deposit
Your conveyancer will send a copy of the draft contract and a copy of the sale pack to the buyer’s conveyancer. The sale pack contains copies of: the title deed, the lease (if leasehold property), the completed Property Information Form or Leasehold information Form (if leasehold property), and the Fittings and Contents Form.
The buyer's conveyancer will then inspect these documents.
Depending on the valuation report and building survey results, the buyer's solicitor or conveyancer will raise some queries related to the property with your conveyancer questions.
Either party can pull out of the deal at this stage. This is one of the reasons why you should pick a proactive conveyancer. Otherwise, the seller may no longer remain interested if his queries are not being satisfied in a timely fashion, jeopardising the deal.
Once the terms of the contract are finalised between you and the buyer and the buyer's conveyancer confirms to move ahead with the purchase, your conveyancer will send you the contract for the purchase and Form TR1 (the form that actually transfers ownership and will be filed at the Land Registry).
If you are happy to proceed, return both documents signed by the next day and ask your conveyancer to confirm its’ receipt.
Once the contracts are signed, the parties will agree to a completion date. Both parties must complete the sale by the date decided.
Immediately after the exchange of contracts, you should receive the buyer’s deposit previously agreed in the negotiating rounds. It is generally 5% to 10% of the total purchase price.
Further, after this point, you are responsible for maintaining the house until the sale is complete. So you may need home insurance if you do not already have one.
8.Completion of sale
Completion is the legal transfer of property – the day that the seller receives the balance sale consideration and the hand over vacant possession to the buyer.
Generally, parties agree on a completion date that is 1 to 4 weeks after the exchange of contracts, depending on your need to remain in the property until you have completed the purchase of your next home.
There are some final checks to be done before completion.
If the place has a mortgage, your conveyancer will need to have its’ value calculated up until completion day and then request a redemption certificate from your existing mortgage lender (that is proof of how much of the mortgage you have paid)and outstanding mortgage).
Your conveyancer will then create a Completion Statement that shows the total purchase price and the remaining sale consideration, and send the Completion Statement to the buyer’s conveyancer.
On the completion day, the conveyancers will double-check all documents. Once cleared, the buyer’s conveyancer will let his lender know they can transfer the money to the seller.
Upon confirmation of payment and ensuring that all fees (including conveyancer or solicitor fees and estate agents fees), your conveyancer will inform your estate agent to hand over the keys to the buyer so that they can move in.
What you can do to ensure that your property sale is not held up
While most of the work in purchasing and selling of a property is to be done by the buyer, you should take some measures to ensure that your property’s sale is not held up.
Pick a proactive conveyancer
Your conveyancer’s primary role will be to handle queries from the buyer’s side, in addition to ensuring the legal documentation is in order.
For most buyers, a short transaction time is really important. It is also one of the main reasons for these transactions falling through. Where the sale gets dragged on, the buyer is more likely to have the incentive and time to pull out.
A proactive conveyancer can anticipate the questions that the buyers may have. They will pursue the buyer’s conveyancer to ensure that the process is moving forward.
Consider the conveyancer’s experience and personality before hiring one. Though a conveyancer may offer low quotes, if they lack experience, they are unlikely to be a match for the buyer’s more seasoned conveyancer.
Foresee how the survey might turn out
This is one of the most frightening aspects of the conveyancing process for a seller. The buyer will receive detailed information about your property through a survey after the offer has been accepted and before the exchange of contracts.
You may perceive it to be in a far better condition than it is. You will need to take somesteps after a bad survey.
Further, these surveys are often used as a bargaining tool to get the seller to decrease the sale price.
You can do several things to ensure that the sale does not fall through at this stage.
Reduce the number of questions that a buyer may flag up by anticipating what questions may be asked after the survey and prepare answers and supporting evidence in advance. Is there a chance that there are woodworms in the rafter? Ensure that you have the certificate to show it has been treated.
Further, the things you think are likely to come up after the survey, you can consider disclosing them to the buyer before the survey is carried out. If a buyer thinks you have been hiding anything, they may lose interest in the purchase.
However, if you are unsure whether a possible problem or multiple of them will be picked up in the survey, prepares answers and evidence to them in advance, but do not disclose them unless the buyer specifically asks.
If there is a major problem with the property that you think can hold up the sale, you will be better off getting the remedial work carried out before you put the property on the market.
You should be prepared to move
You are likely to stay on the property until completion if you have not made arrangements for moving to your next home.
Generally, people don’t even think about packing until the parties exchange contracts (i.e. when the sale becomes certain). Not being able to give vacant possession on the completion day is a breach of contract, just as if the buyer had not paid you the sale consideration.
There are a lot of tasks you have to do in advance of moving. For example, you should list all service providers and their contact information and inform them of when the services need to be stopped. For example, an Internet connection.
If you start packing at the last minute, you will realise that you do not use many items that will have to be packed up in boxes. Furthermore, you have to remember that you are packing to unpack. So correctly labelling each box is vital.
Some last words
If you spent a little time planning and working while the sale is in process, you can reduce the time the process takes and increase the chances of the sale not falling through.