INTRODUCTION

Russen & Hill have put together for you this useful property selling guide to assit you in the selling process. Often considered one of the most stressful times in ones life, selling a home can be a big undertaking, and the process is often unfamiliar as, on average, we only move every 15 – 20 years. It is really important you are able to get advice from the right people at the right time.

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.

Many people, once they have moved say ‘Never Again’, but at Russen & Hill we do our very best to help you along with constant updates and advice with any questions to make the process as pain free as possible. We live by our code... “with you from start to finish”.

UNDERSTAND YOUR FINANCES

When you sell your home, you will need enough money to pay off the remainder of your mortgage, if you have one of course. 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. A helpful checklist of costs to think about is available from the Money Advice Service.

While it is currently a rare problem, you may find that you are in negative equity. This means that your home is worth less than the amount you owe your mortgage provider, and so you may not want to sell your home as you will still be liable for the outstanding balance. If you still want to move, lenders may consider allowing you to transfer the debt to a new property, but you must speak to them as soon as possible and tell your legal representative what has been agreed. More advice on negative equity can be found from the Money Advice Service.

BEFORE YOU MARKET YOUR HOME

Before you begin to think about putting your property on the market, you should spend some time getting your paperwork together and making your home ‘SALE READY’.

PAPERWORK

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.

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. More information about EPCs, including how to find an accredited assessor, can be found on the Government’s website.

Other paperwork you may already have include:

• HM Land Registry title documents
• Gas checks completed by a Gas Safe registered engineer (or Corgi-registered engineer prior to 2009)
• 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.

ID checks

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.

Gather 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.

MAKING YOUR HOME ‘SALE READY’

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 & 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.

VALUATIONS & PRICE

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. A property’s valuation is not necessarily the same as the price it will eventually sell for – this will ultimately be decided by how much your buyer is willing to pay. This can be either more or less than the initial valuation and will be influenced by market conditions.

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.

You should ask 3 different Estate Agents to value your property. This is not a formal valuation – a qualified valuer or surveyor will charge you for this service – but it will give you a better idea of what your property is worth. Ask the Estate Agent for evidence to support their valuation; for example, similar properties they have recently sold. 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.

HOW TO CHOOSE AN ESTATE AGENT

An Estate Agent acts on your behalf to negotiate the sale of the property between you and the buyer, and is able to list your property on property portal websites. You may be tempted to select the agent who valued your property the highest but you should remember that a valuation is not a guarantee of sale price; they may advise that you drop the price at a later date. There are a range of factors you should consider when choosing an Estate Agent:

• ONLINE OR HIGH STREET ESTATE AGENT – both have their pros and cons. You might want to have an Estate Agent that you can meet face-to-face, or it might be more important that you benefit from the cheaper costs of an online agency.
• FEE TRANSPARENCY – some agents charge a percentage of the sale price while others charge a fixed fee. Make sure you know what you are paying for – will you be charged if your home doesn’t sell? Will you pay extra for post-sales progression? Are there any penalties? Don’t be afraid to try and negotiate on the fee.
• DO YOU WANT TO DO YOUR OWN VIEWINGS? – some Estate Agents offer a cheaper package if you are able to conduct your own viewings.
• DO THEY HAVE A DEDICATED SALES PROGRESSOR / TEAM? – they will help and advise you between offer and completion.
• ONLINE REVIEWS – are other customers pleased with the service received?
• SOLE SELLING RIGHTS – if your contract gives the agent sole selling rights then you will pay the Estate Agent even if you find your own buyer during the period agreed. Make sure you know what happens after 3 or 6 months – can you engage another Estate Agent without any penalties? Do you have to give notice to your first Estate Agent? If you change agents, will you end up paying fees to both when you find a buyer?
• MEMBERSHIP OF A REPRESENTATIVE BODY – membership requires estate agents to sign up to a code of practice or membership rules. Example bodies include the National Association of Estate Agents (NAEA) and the Royal Institution of Chartered Surveyors (RICS).

It is also possible to sell your home without employing an Estate Agent, such as through an auction or private sale.

INSTRUCT A CONVEYANCER OR OTHER LEGAL REPRESENTATIVE

A conveyancer is a legal professional whose role is to do the legal work of transferring the ownership of the home from you to the buyer. You should choose your legal representative shortly before you put your home on the market or as soon as possible once your property is up for sale, as it will reduce delays.

There are various legal professionals who are qualified to carry out conveyancing work: solicitors, licensed conveyancers, and chartered legal executives and CILEx practitioners. These are all qualified and regulated professionals, who can undertake this work for you. The Legal Choices webpages for each conveyancing professional contain information on how to check that your legal professional is regulated by the appropriate body.

You should get quotes from more than one legal representative before you choose which one to use. When choosing, you should consider:

• THE PRICE – are there any hidden extras, and will they be paid a referral fee for your custom? Do they have a no-move, no-fee service?
• THE QUALITY – do they have online reviews? If your property is more complex than normal (leasehold, listed-building etc.) do they have the specialist skills needed?
• THE SERVICE – will you have a named contact? How will they communicate with you (phone, email etc.) and how often? Do their opening hours suit you? Do they have experience conveyancing properties in your local area?

If you have taken out a Green Deal loan on your property which you have yet to repay, you must inform your legal representative. This is because the obligation to repay the loan remains with the property, so the new owner will have to continue to repay the investment. It is likely that they will want you to pay it off prior to the sale.

SHOWING YOUR PROPERTY

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.

You should also ask your Estate Agent to collect feedback from viewings – this way you can rectify problems or adjust the asking price accordingly.

Open house viewings can be an alternative to the traditional model of separate viewings over the course of a few weeks.

CHOOSING A BUYER

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. Don’t feel rushed into accepting an offer. You should take some time to consider the following:

• THE AMOUNT OF THE OFFER – would you be happy to accept? Do similar homes in the area seem to be selling for a similar amount?
• IF THE OFFER IS MADE BY A CASH OR MORTGAGE BUYER – securing a mortgage can take more time; have they already got a decision in principle from a lender so they know they can get the required loan?
• 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.

One option to sell your home may be to consider a company offering an instant cash purchase, but make sure you understand the trade-off involved; these firms may offer a quick sale, but they may pay well below the market price for your home. You should use a firm that is a member of the National Association of Property Buyers (NAPB), as they are signed up to The Property Ombudsman’s Code of Practice.

NEGOTIATING

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 the 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 & 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.

ENQUIRIES

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.

ACCEPTING AN OFFER

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. Your Estate Agent may charge more for sales progression if it is not part of the service you commissioned at the start. In order to signal your commitment to the sale, you should remove the property from the market once the offer has been accepted.

WHAT TO DO IF THERE ARE PROBLEMS WITH THE CHAIN

A property chain contains multiple people buying and selling homes at the same time. Chains can be tricky because if one transaction is delayed or fails the whole chain can be affected.

However it is important not to panic. Try to find out more details about your buyer – are they in a chain? If so, how long is it? Does everyone have a buyer, or are some people still waiting to sell their home? If they offer sales progression services, your Estate Agent and legal representative should help you answer these questions, and liaise with the other estate agents and legal representatives in the chain on your behalf to keep everyone updated on progress.

You should also make sure you don’t become the ‘weak link’ in the chain. Have your documents in order, sign and return paperwork promptly, and respond to queries from your estate agent or legal representative in a timely manner.

EXCHANGE

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 & MOVING

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.

POST MOVE

Once you have moved out of your home, you should update the following with your new address:

• The local authorities of both your new home and your previous one to get your Council Tax liability transferred to your new property and to ensure you don’t keep paying tax on your old one. Similarly you should move your electoral roll registration over to the local authority in your new area.
• Utilities and water
• GP and other medical providers e.g. dentist
• Insurance company (for both buildings and contents insurance)
• DVLA (if applicable)
• Any financial products you have (e.g. bank or building society accounts; pension schemes)
• Mobile phone, TV and internet packages
• Vet, especially to change your pet’s micro-chip details (if applicable)

You should also cancel the property insurance you have for your previous property if you have not yet done so.