If you have made the decision to move and sell your home, you might have a few (or a dozen) questions. The buying and selling process can be complex and time-consuming, but don’t let it intimidate you!
The following is an overview of some of the things that you can expect when you are buying and selling your home.
SELLING YOUR HOME
Make sure you understand the financial implications of moving house
Aside from the costs of moving, you need to be aware of the collateral consequences of selling your home – stamp duty, solicitor’s fees, and estate agent commissions can all cut into the potential equity of your home. Make sure you are ready for this, and don’t get a nasty surprise.
Decide how you want to sell your home.
You can sell your home yourself, or you can hire an estate agent.
When it comes to using an estate agent, there are two main types – an online agency or a traditional estate agent.
With the advent of technology, you can now list your home with an online estate agency. This option is becoming more popular; these online agents have access to the same advertising and marketing channels as traditional estate agencies at a fraction of the cost. In many cases, these online agencies do not have a local office and so you will probably have to conduct viewings yourself and they don’t have a ‘shop window’ for potential purchasers who don’t use the internet and register in person at an estate agent’s office.
If you decide to go with a ‘full service’ traditional estate agent, do your research. Find out how quickly the local agents sell, how close they get to their asking prices, and what their fee is. Our advice would be to choose the agent you believe to be the best fit for you and your property and then do your best to negotiate a great fee (a good goal is a 1 percent commission plus VAT if you use sole agency over multi-agency).
If you decide to sell your home yourself, you need to be organized and hardworking. You could lose out on the marketing skills of the agent, so even if you believe you will save money, selling your own home is not without risks.
If you are feeling courageous, here is a useful website if you want to try selling your home yourself.
Be prepared for the steps that come after you accept an offer.
Believe it or not, accepting the offer is the easiest bit.
Before keys can be handed over, you will need to negotiate and exchange contracts, which should be drawn up by a reputable and experienced solicitor.
This is when you and the buyer decide the date you move out, whether any fixtures and fittings will be included, and whether the price needs to be adjusted based on new issues brought up by the surveyor. Be aware that once you exchange contracts with the buyer, you are officially in a legally binding contract. If either party pulls out of the deal, they could be sued and lose money.
Ensure the sale is actually finalized
You have to actually legally convey ownership.
Completion of the sale usually occurs on a previously agreed date, where money is transferred, and deeds for the property are transferred between each party’s solicitor.
It is then incumbent upon the solicitor to ensure the transfer of ownership has been registered with the Land Registry.
BUYING YOUR HOME
Understand what you can afford, and get a good mortgage
Keep in mind that the cost of buying the home does not just include the mortgage, but also solicitor’s fees, stamp duty, and mortgage fees as well as the deposit on your house.
Make sure you work on your budget and understand exactly what you can afford. It helps for you to speak to an Independent Financial Advisor on mortgage products. Once you find a mortgage you like, agree to take it as a mortgage ‘in principle’ so you know how much money you will be likely to get.
It might be helpful to check your credit report before speaking to a mortgage adviser, just so you aren’t faced with any unexpected surprises.
Know who to hire after you make an offer
You will need to hire a solicitor to take care of the legal paperwork, as well as a surveyor to inspect the property for any problems. Your solicitor will ask for a small sum up front, in order for them to get to work immediately.
Their job is to submit various searches with the local council, land registry and the like to determine whether there are any planning issues or problems with the title.
The surveyor will make sure the property is actually worth what the offer is and, if you instruct a Homebuyer Survey or a Building Survey, they will also comment in detail on the property’s condition.
They will submit their valuation to the mortgagor, and it may affect the amount they are willing to lend, at which point you might want to renegotiate the cost of the house.
Remember the most stressful time of conveyancing
The most stressful time is usually after you have applied for the mortgage and submitted the survey.
Sometimes there can be delays or problems, such as if your mortgage application is delayed or even rejected. Sellers can get cold feet and pull out of the offer – or accept a higher offer from another buyer (also called ‘gazumping’).
Buyers can also have second thoughts, and it is possible to pull out of the deal, although you might face fees, depending on how far into the process you are.
If problems and delays arise, it’s important to stay in touch with your solicitor and the estate agent.
Exchanging contracts
Similar to the section above for sellers, once you have exchanged contracts, you are committed to the sale. Your solicitor will go over all the terms and conditions with you to ensure your understanding and that there are no errors.
At this stage you will pay a 5-10% deposit to confirm your intent.
After you buy
To ensure you aren’t surprised by the list of fees, be sure to read your quotation from the solicitor. We provide a detailed and transparent table which includes ALL the costs but some solicitors will add additional costs within the text of the quote letter.
Usually, your solicitor will pay the Stamp Duty on your behalf – you only have 30 days from the date of completion to pay it – and then will register it with the Land Registry. The solicitor will then send you the paperwork evidencing your ownership.
Finally, invest in some good buildings insurance (we recommend you put it on risk at exchange of contracts) – buying a home is one of the biggest and best investments of your life, and you should do what you can to protect it.
Photo Reference: Photo by Annie Spratt on Unsplash