Selling a home can be a big undertaking but you can avoid stress and speed up the process by understanding what questions to ask, what your rights are, and what responsibilities you have as a home seller.
As the transaction progresses, we will guide you through below, step by step to ensure a smooth process.
When you sell your home, you will need enough money to pay off the remainder of your mortgage, if you have one. You should speak with your lender or broker to find out how much you owe, including any possible penalties for early repayment. In addition, when selling, you may also need to pay:
• Any other outstanding debts secured against the property
• Estate agent fees
• Energy Performance Certificate (EPC) fees (unless the property is exempt or a valid certificate already exists)
• Legal fees
• Land registry fees
• Removal costs
• Capital gains tax if the property is not your primary home or includes a lot of land
• For essential home repairs or improvements
• It is therefore very important you know how much your property is likely to be worth so you can compare it to the outstanding balance on your mortgage
and the other costs of moving.
When you know how much money you are likely to release from selling your property, you can budget for your next move. It is important to do this early on so that the final exchange of contracts is not delayed.
Your estate agent and legal representative will ask for various pieces of information throughout the selling process. You are likely to have received some of it when you purchased your property. If you gather together the relevant documents at this stage, you can avoid future delays and provide your estate agent with key information to share with prospective buyers from the outset.
Paperwork you may already have includes:
• HM Land Registry title documents
• Gas checks completed by a Gas Safe registered engineer (or Corgi-registered engineer prior to 2009)
• Energy Performance Certificate (EPC)
• Electrical checks - an Electrical Installation Condition Report (EICR) or a NAPIT or NICEIC certificate/report from a registered electrical competent person
• FENSA or CERTAS certificates for windows
• Planning permission for any major work carried out
• Building regulation completion certificates and builder’s guarantee certificates for alterations or additions
• Subsidence guarantees/warranties
• Damp guarantees/warranties
• Party wall agreements (if relevant)
• If a listed building, listed building consent for interior and exterior works
• If your home is in a conservation area, conservation area consent for works
• Japanese knotweed management plans (if relevant)
• Specialist asbestos surveys (if relevant)
• Any title insurance policies you may have taken out to solve title defects
When you come to sell, your legal representative will ask you to complete a Property Information Form, also known as a TA6 form, and a TA7 form if you are selling a leasehold property. Take a look at a draft version on the Law Society’s website and start to gather any information you have access to now.
You can instruct a legal representative to check your property title and information as soon as you decide to sell. It can save a lot of time as they can resolve any issues before you even find a buyer.
Whilst it is possible to do some of this work yourself, you need to be fully aware that any mistakes you make could be very costly and you could find yourself sued by a buyer if the information is inaccurate. In most cases, when you bought your first home you will have had a cash deposit, but if you are selling and buying at the same time you may not have the entire deposit to hand. You will be able to transfer the equity from your current property to the next.
If your new home is going to be more expensive, you must always check with the seller that they are happy to accept a reduced deposit.
Estate agents, legal representatives and mortgage lenders are required by law to check your identity in order to protect against money laundering. You will need to provide them with proof of identity (including photographic ID) and proof of address.
Get the documentation that you will need together now to speed up your purchase:
• Proof of identity document - e.g. passport or driving licence. A full list of official identification documents is available on the government’s website.
• Proof of address - e.g. driving licence, bank statement, or utility bill (not more than 3 months old). A full list of proof of address documents is available on the
government’s website.
If you bought your home recently it will have an Energy Performance Certificate (EPC) which you might be able to reuse as they are valid for 10 years (provided you have not done anything to affect the rating - if you have, you will need a new EPC). You can look up your property’s latest EPC through the online EPC register.
If your property does not have an up-to-date EPC, in most cases you will need to commission one; however if your home is listed or in a conservation area you may not need an EPC.
Before you instruct an estate agent and begin viewings, make sure your home is looking its best. Investing a little time and money now could improve your chances of selling at a better price. Consider the following:
• Kerb appeal - when potential buyers arrive at your property, what will they think? Does the property need a lick of paint, or the front garden need tidying up?
• Snags - you might not notice an unfinished DIY project, but it might put off a potential buyer. Try to fix any snags.
• Tidy, de-clutter and clean - you should aim to make your home look inviting.
• Review your Energy Performance Certificate - particularly if the EPC was done some time ago, consider whether it reflects your property now. For example,
Have you had a new boiler or insulation fitted since the certificate was awarded? Also consider whether there are any recommendations you could
implement to improve the energy efficiency of your property.
• You might also consider having the boiler serviced and an electrical installation condition report carried out.
You should be prepared to tell your estate agent all the relevant material facts about your property. Your estate agent will provide more guidance, but broadly material facts are things which may have a major impact on whether a buyer decides to purchase your home; for example, if it regularly floods. Estate agents are legally required to share this information with potential buyers.
While you want to present your home in the best possible light, you should not mislead potential buyers by covering up any defects; for example, by painting over damp patches. Any problems are likely to come up in the buyer’s survey, which could then lead to avoidable price negotiations.
If you are particularly concerned about an aspect of your property, you may wish to have the problem assessed by a suitable professional in order to determine the likely cost of remedial works, which you can then present to potential buyers before an offer is made.
If you know there is a significant issue with your that can be addressed with appropriate work, such as damp, it may be worth having the work done to rectify it in advance of putting your home on the market.
If you decide against remedial works you should factor that into the price of the property, and let your estate agent know you have already accounted for the existing issue. This means potential buyers will have better information up-front and will be less likely to ask for a price reduction at a later date.
You should also consider whether there are any fixtures or fittings, or even pieces of furniture, that you do not want to take with you to your next home and which you will include in the sale or offer to the buyer for a fee.
If your property is leasehold, there are a number of key pieces of information your buyer will need to understand and your agent will have to provide. These might include:
• The remaining time on the lease. If the lease has less than 80 years to run, you may need to extend the lease before selling. Some lenders are reluctant to
lend on leasehold properties with less than 80 years remaining. More information is available from the Leasehold Advisory Service.
• A copy of the lease/a leasehold information pack, which will include how long the lease has left to run (your legal representative can normally obtain this for
you).
• The key terms of the lease, including service charges, ground rent and event fees
• All documents you have relating to service charges including a copy of accounts, share certificate, memorandum and articles, buildings insurance, and
recent correspondence from the freeholder or managing agent. These should be sent to your legal representative. If you do not have them, your legal
representative will obtain copies from the freeholder or managing agent.
• Whether there are any major works planned at the property, for example replacing the roof.
• Fire risk and other assessments (e.g. asbestos).
You should discuss with your legal representative when and how to gather this information, as your freeholder or managing agent are likely to charge you for providing it. You should contact the freeholder as early as possible to obtain information for the leasehold information pack to avoid delaying the transaction process.
When it comes to putting your property on the market, the price at which you list it should be informed by your own research and the opinion of local estate agents, but remember that the final decision is yours.
Your first step is to do some research on property websites and/or by looking in estate agent windows to give you a feel for the asking and sold prices for similar properties in the area. You can also find the agreed purchase price for properties from HM Land Registry, all of which can be helpful when deciding your property’s value.
A high valuation does not necessarily mean you will secure this price. If you decide to put your property on the market for a price which is much higher than the estate agent’s valuation it may take a long time to sell or you may not get any offers at all.
Selling a home involves the transfer of large sums of money and can attract the attention of criminals. Though the risk of fraud is low, you should be vigilant about common scams. Misdirection fraud is when you receive an email or phone-call which seems to come from your legal representatives informing you of a change to their bank account details.
It is extremely rare for legal representative to change their bank account. If you are in any doubt, do not transfer any money.
Call your legal representative on a known number (i.e. not the number listed on the potentially fraudulent email) to check.
Sometimes fraudsters try to transfer the property into their own name, often using false documents, allowing them to take out a mortgage against it. This is most likely to happen to homes which do not already have a mortgage taken out against them.
You can sign up for HM Land Registry’s free Property Alert Service to be notified of any searches or changes to the title of your property; so if anything unexpected happens you can take action.
Think carefully about how you use social media - it is not uncommon for criminals to find the information they need to commit fraud from your social media profile. For example:
If there are open groups on a social media platform such as Facebook containing you and the other people in your property transaction chain. This can also obstruct your legal professional in their work.
If there are any types of open discussions with others involved in the process on an open online forum.
Regardless of whether you or your agent is showing your property, it is important that it looks and smells clean, tidy and welcoming.
Make sure you tidy away any clutter and clean up before any viewings. It can be helpful to have a bed in the smallest bedroom in order to reassure viewers that a bed will fit.
Bear in mind that potential buyers may also wish to see the garden or inside the loft or garage, so make sure your agent has access to these spaces.
Open house viewings can be an alternative to the traditional model of separate viewings over the course of a few weeks.
Estate agents are legally required to inform you of all offers made, regardless of whether they are below the asking price or if you have already accepted another offer.
You should take some time to consider the following:
if the buyer is part of a chain or not - a chain is a number of linked property transactions, where a seller of one property is a buyer of another. A chain starts with a buyer who isn’t a seller (for example a first time buyer) and ends with a seller who isn’t a buyer (for example where a property is sold because the owner has died). If one transaction becomes delayed or fails it can have a knock-on effect on the other transactions in the chain. First time buyers or people living in rented accommodation don’t have a chain, which means there are fewer opportunities for delays.
if in a chain, the chain length, which means the number of buyers and sellers involved in the chain. The longer the chain the more potential for delays if in a chain, whether the chain is open or closed. A chain is closed when each buyer has also found a purchaser for their home. On the other hand, an open chain happens when one or more buyers haven’t been able to sell their homes, and can add significant delays to the process whether the buyer is willing to enter into a reservation agreement to show they are committed to buying your property and prepared to pay you compensation if they pull out of the deal.
If you bought your home using the support of a Help to Buy: Equity Loan, then there will be additional requirements when you sell your home. More information can be found on the Help to Buy website.
You should also contact the mortgage administrator early to ensure the selling process runs smoothly. More information on this is available on the My First Home website.
At this stage, while you and the buyer have agreed to a sale, the specifics of the agreement have yet to be decided.
Remember that at this point, neither party is under any legal obligation to the sale. Only when you exchange the signed contracts with your buyer is it legally binding.
Some things which might come up during negotiations:
• Completion date - this is the date by which you must have vacated the property. This may be dictated by when your buyer must move out of their current
home. Timings can vary but must be agreed by all parties in a chain. You may wish to consider letting people know in advance of any holidays you have
booked.
• Fixtures and fittings - consider which things you definitely do and do not want to take with you to your new home, and on which things you can be more
flexible. Make sure it is clear in the contract (often part of a TA10 fittings and content form) what you intend to leave behind either for free or at extra cost, as
this must be agreed with the buyer. More information is available on the RICS website.
• Survey - if the buyer’s survey has uncovered significant issues they might ask you to pay to have them fixed; renegotiate their offer to take into account the
cost of the work; or even withdraw their offer altogether.
During the process the buyer’s legal representative will raise enquiries. These are questions about the information which they have asked for or received e.g. the title, searches, the mortgage offer or general questions about the property or transaction.
Enquiries are therefore raised at different points through the process, sometimes at the very last minute, and will normally be answered by your legal representative but may need your input. These questions are important as the buyer’s legal representative has to satisfy the lender’s requirements.
You are not required to answer questions on condition; questions which are outside your knowledge; or questions which the buyer can find out the answers to themselves. Your legal representative will advise you on answering these enquiries.
Once you have accepted an offer, the buyer will instruct their legal representative to commission searches and review the title of the property.
They may also get in touch to ask questions about your home, or ask for a mortgage valuer, surveyor or builder to have access to carry out property assessments. These are all good signs that they are committed to purchasing the property.
Remember that your property is not legally sold until you have exchanged written contracts with the buyer. If you have accepted an offer but not yet exchanged contracts, your property is said to be ‘sold subject to contract’, which means that the paperwork has not been finalised.
Although neither you nor the buyer is legally committed to the sale at this stage, you should bear in mind that pulling out after you have accepted an offer is likely to increase delays, costs and frustration for both yourself and the potential buyer, and may jeopardise any property purchase you intend to make.
A few days after you have accepted the offer, check with your legal representative to make sure the buyer has appointed their own legal representative. If the buyer does not seem to be making any preparations for purchase, ask your estate agent and legal representative to check what is causing the delay.
Exchange is when you and the buyer exchange signed contracts and are legally bound to the sale. Neither party can withdraw from this legal commitment without consequences.
If the buyer withdraws from the agreement after exchange they may lose their deposit. If you withdraw you may be liable for breach of contract, the buyer’s costs and even compensation.
Now that you have legally committed to the sale the buyer may wish to visit the property again in order to measure rooms for furniture, curtains etc, and it is helpful if you can agree for them to do so.
Completion is when your legal representative receives the remaining funds from the buyer’s legal representative, and you hand over ownership of the property.
Before you leave you should ensure you have taken all of your belongings and any rubbish, and left behind anything that was agreed in the Property Fixtures and Fittings form.
You should leave your property in the condition you would wish to find your next home. Make a record of the meter readings and call your energy providers to close your account.
Completion often happens and the keys are handed over to the buyer at lunchtime, so you need to have moved out by this point. However, you should be aware that delays can happen due to many people in the chain completing on the same day.
Complex money transfers take place on completion day, and you should be aware that there may be delays. The purchase money will be transferred from the buyer (or their mortgage provider) to their legal representative, who will pass it on to your legal representative.
Your legal representative will pay off the mortgage and any secured debts (if you have them), stamp duty (if you are buying another property), outstanding estate agent fees, service charges (if relevant), settle their own fees and send the balance due to you to your account.
You should regularly check in with your legal representative on the day for progress updates and to tackle any issues which may emerge.