Guide to selling a home
Posted on Thursday, March 31, 2022
Selling your home can be as daunting a move as when you first bought it. Selling and buying another property at the same time can be even more stressful and complicated.
Help is at hand in our step-by-step guide.
Step by step guide to selling your home
- Figure out your finances
Work out at a rough estimate of the value of your home. Check your mortgage paperwork or speak to your lender to see if you will have to fork out for any early-repayment charges for switching to another lender, or whether “porting” is possible – when you take your mortgage with you to a new property.
- Consider the merits of renting, rather than buying
If you decide to sell your home and rent for a while, that can add to the overall expense – rental costs may be higher and there will be two sets of removal costs – but you won’t end up homeless or be rushed into buying if your old home sells quickly. You won’t have to compromise on your sale price and you’ll be chain-free – therefore a more attractive buyer.
- Get an energy performance certificate (EPC)
You must have at least applied for an energy performance certificate before you put your home on the market. If you leave it to your estate agent to arrange, they will probably charge commission.
- Decide how much to sell your home for
Do your research, get to know the local market and ask estate agents to do valuations. Buyers may try to negotiate a discount, so consider adding 5%-10% to what you are prepared to accept.
- Prepare your home for sale
Tidying up, applying a fresh lick of paint and strategically placing vases of flowers and plants can do wonders. Our article on home improvements has more about “kerb appeal” and adding value on a budget.
- Hire a conveyancing solicitor
You can only instruct them to handle the legal work after you have agreed an offer, but get organised.
- Accept an offer
Once you are happy with an offer, you need to formally accept it – while remembering that accepting an offer is not legally binding.
- Fill out the relevant questionnaires
There are a variety of forms and questionnaires provided to you by your conveyancer giving the buyer all the information about the property, and the sale. You must fill them out to the best of your knowledge that includes “noisy neighbours”.
- Negotiate the contract, exchange contracts and move out
After negotiating details, there’s the exchange of contracts with the buyer, legally committing you to selling the property – and them to buying it from you. If you pull out after this without due reason, the buyer’s deposit will be returned to them and you may be sued.
How much does it cost to sell a house?
There are a number of different fees to factor in at various stages of a property sale. You need to work out whether you can truly afford to sell your house and move at this particular time.
- You may have to pay a redemption or exit fee to leave your current mortgage
- Could be between £50 and £300
- Unless on a standard variable rate (SVR), there will likely be early repayment charges as a percentage of the outstanding mortgage debt to pay
- For example, on a 5-year fixed deal, the charge could be 5% in year one, 4% in year two, 3% in year three and so on. A 3% fee on a £250,000 mortgage means a £7,500 bill.
- To avoid this, you could:
- wait until your mortgage deal finishes and you roll on to the SVR. Or you could
- transfer your mortgage to the next property, which is known as “porting a mortgage”. You will still need to reapply to your lender and to meet its criteria.
- Legal costs
- Typically come in at £500-£1,500
- A solicitor or licensed conveyancer will deal with the legal aspects of selling your property
- They’ll either charge you a flat fee or a percentage of the value of the property.
- An Energy Performance Certificate
- This is a legal requirement for selling a property
- Gives information about the energy efficiency of a property
- Costs between £50 and £120
- Valid for 10 years
- The costs of buying
- Stamp duty
- Solicitor and land registry fees
- Removals etc…
Top tip! Check the pros and cons of porting your mortgage. It might seem like the simplest option, but look to see whether other lenders have better deals. A good offer might make it worth paying an early repayment fee. Do the maths early on – or get expert advice from an independent mortgage broker.
How much is my property worth?
Deciding the price when selling your property is one of the most important decisions you will make.
- Too low and you’ll risk selling for less than you could have got
- Too high and you’ll put people off
It’ll also give your property a bad look: the longer a home is on the market, the more buyers will suspect something’s wrong.
How can I increase my chances of selling my house?
Getting your house ready for potential buyers is the fun part. Find your inner interior designer and start decluttering if you want prospective buyers to imagine themselves in your home.
- Remove family photographs and other really personal affects
- Redecorate and fix damp patches
- Replace tatty carpets
- Weed the garden, mow the lawn, clean the windows and consider repainting the exterior
- Invest in a bunch of flowers and a designer room spray – especially if you’re a smoker or a dog owner.
Ask for feedback from us after we have hosted the viewing for advice on how it went. You need to know if there might be a problem with the way your property is being presented.
What sells a house fast?
- A tidy driveway and front garden
- A clutter-free hallway
- A deep clean on the entire property
- Cleared storage spaces
- No drastic renovations – often potential buyers will want to make their own changes to a property and may not share your taste
- Clever lighting can make a space look more homely
- A different photo for the online listing’s main image
- Lowering your price or taking your home off the market and wait for market conditions to improve
- A hardworking estate agent
What should you not say when selling a house?
- Your house has been on the market for a long time.
- You are selling your home because you’re going through difficult times, e.g. lost your job or getting a divorce, as some potential buyers may attempt to take advantage of the situation.
- Avoid saying anything about the area. Saying you want to move to a quiet area could suggest there’s a problem with your neighbours or your street in general. You don’t know what a home buyer wants so it’s better to avoid.
- Don’t disclose that an offer for your next home depends on you selling this one. The same applies if you’ve already purchased your next home. It may signal to potential buyers that you need to sell quickly and prompt them to offer a lower price.
- You haven’t received any offers yet. If asked, your best answer should be: We’ve had a lot of interest.
When should I accept an offer?
We will inform you as soon as any offers are made. Also remember that accepting an offer is not legally binding. If you receive multiple offers, don’t assume price is the only thing that matters; think about:
- who’s least likely to pull out
- who can move at the same pace as you
The safest buyers to choose are generally chain-free and paying cash – e.g. someone who has already sold their previous home and doesn’t need a mortgage to buy yours.
Less safe but still attractive are:
- home movers who have at least exchanged on their sale
- first-time buyers who are reliant on a large mortgage but not part of a chain
- Buy-to-let investors relying on a mortgage
Buyers often offer less than the asking price so do you negotiate? You can refuse the offer in the hope that they will increase it, or suggest a compromise price.
TIP: It can feel like a game but stick to being realistic: is the offer enough for you to be able to afford your next property? Is it close to your estate agent’s valuation?
Negotiations often depend on circumstances:
- How quickly do you need to sell?
- Have you already reduced your price?
- Are house prices set to slide?
Tell us exactly what you want to get out of the exchange of contracts when selling your home. And if your property has been on the market for a while and you haven’t received any offers talk to us. You may need to:
- lower your asking price
- change the main photo for the online listing
- take your home off the market and wait for better times
I’ve accepted an offer on my house –what happens next?
An accepted offer is not legally binding but will usually be “subject to contract”, which means that as long as a survey doesn’t throw up any surprises, the buyer is likely to complete the sale.
If the survey does throw up, for example, a structural problem then the buyer may lower their offer in a process known as gazundering. Don’t forget that, as the seller, you can legally change your mind or accept a higher offer (known as gazumping).
After the offer has been accepted, you and the buyer will negotiate the draft contract. This involves:
- deciding when the exchange of contracts and the completion date (usually 7-28 days between the two) will be set for
- what fixtures and fittings will be included
- any discounts due to issues flagged up by the survey
Property chain problems
It can take a little while to sell your home if there is a property chain – a line of potential buyers and sellers linked together because each is selling and buying a home from one of the others.
There are dozens of other people associated with the chain, such as estate agents, surveyors and mortgage lenders.
The biggest risk is someone forgetting to sign a document, changing their mind or having mortgage problems. The whole chain could then slow down or even collapse.
If you want a quick sale or just wary of being caught in a chain, there are steps you can take to dodge them:
- If you’re a seller with multiple offers on the table, choose a buyer who isn’t in a chain themselves
- If you’re buying, seek out properties where the upward chain is short or non-existent – for example, it’s a new-build or a previous owner has died
- Consider whether to sell your property and rent for the short term so you’ll be chain free and more attractive to a seller
Exchanging of contracts and completion
Congratulations, it’s time to exchange! Before the exchange of contracts, however, you will need to complete several questionnaires about the property:
- TA6 form – covers information on boundaries, disputes and complaints, known proposed developments – like motorways or railways – council tax, utilities and sewerage
- If you do not own the freehold, you should give more information on either the leasehold – form TA7 – or the commonhold – TA9 form
- TA10 form provides details of which fittings and fixtures you would like to include with the property
- TA13 form includes arrangements to hand over the keys, how and where you will complete, and confirmation that the house is free of all mortgages and liability claims
Your solicitor or conveyancer will use the questionnaire information to draw up a draft contract. This is sent to the buyer for approval. There may be negotiations over this draft contract.
Before you can exchange contracts, you need to request a redemption figure from your mortgage company, unless you are porting it. The mortgage won’t be paid off at this point – it will be paid upon completion of the sale.
Exchange of contracts deposit
Once terms of the contract are agreed – woohoo! – a date to exchange will be set and a 10% deposit is due to the seller when contracts are exchanged. This is when things become legally binding.
Your solicitor or conveyancer will exchange contracts for you on the agreed date. This is usually done by both solicitors or conveyancers making sure the contracts are identical, and then immediately sending them to one another in the post.
What happens on completion day?
The day you complete is when the rest of the money is transferred, and you have finally sold your home. You will need to:
- Move all your belongings, fixtures and fittings
- Drop your keys off with us, for them to give to the buyer
- Pay your solicitor/conveyancer and the estate agent
If you’re buying a property too, it’s easiest if you complete on the same day as your sale so you can move all your things straight into your new home.
Source: The Times