Whilst reading the following information, you might come across terms that you need to clarify. That's why we created this hand Glossary of Terms so hopefully, it helps.
Understanding your Finances
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 improvement
- 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 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 - Getting ‘Sale Ready’
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’.
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 includes:
- 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.
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.
- 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, declutter 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 yours 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.
Valuations and Pricing
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.
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 an 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.
Selling a Rented Property
Selling a property you currently let to tenants is complex and beyond the scope of this guide. You should consider seeking expert advice, as there are a number of factors to consider including tax (more information available from the Government’s website.
Selling your rented property to a buyer who intends to live in it themselves involves many of the same steps as selling a home you live in yourself. You must ensure you are mindful of your tenant’s rights and consider the timing of the property sale to coincide with the appropriate point in the tenancy agreement. More information on ending tenancy agreements is available in the How to Let guide. You will also need to consider the tax implications of selling a property that is not your primary residence.
Selling in Special Circumstances
Probate is the process through which someone is given permission to deal with the estate (belongings and debts) of someone who has died. This can include selling a home. There are some things to bear in mind during this process:
- An application for probate can take a number of weeks or months depending on the complexity of the estate, but you can market the property while you wait for probate to be granted
- You will need to organise a number of separate valuations in order for inheritance tax to be calculated
- You should consider how you will keep the property safe while it is uninhabited; for example putting the heating on during the winter to prevent damp and paying for home insurance
- Check the property is insured if empty as many policies won’t cover you if the property is empty for more than 30 or 60 days
- Sign up for the HM Land Registry Property Alert service to monitor the property against risk of fraud More advice on selling a property through probate can be found through the Gazette website (the official public record).
- Specialist Retirement Properties
When selling a specialist retirement property, there are some things to consider:
- Sometimes charges are accrued and only paid upon the death of the owner
- There may be restricted sales clauses, e.g. the property can only be sold to another older person
- You may have to pay an exit fee to the landlord or management company when you sell the property
- Make sure you and your legal advisor check the small print carefully. Advice about leasehold retirement properties is available from the Leasehold Advisory Service.
Selling under Power of Attorney
A power of attorney gives an individual the power to make or help make decisions about someone else’s property, including selling their home. Lasting powers of attorney can be used before and after the donor loses capacity; according to their wishes.
Selling property under power of attorney is complex and will depend upon what type of power of attorney is in place; whether it is a lasting power of attorney or an enduring power of attorney. You should consult a legal adviser if you are considering selling a property on behalf of someone else in this way.
The estate agent can be a useful source of recommendations for a legal representative, mortgage broker, energy assessor or surveyor. They may refer you to a company because they recommend the service, and may also receive a payment (known as a referral fee) from the business they have referred you to. This is an established way of working, but both the estate agent and the business they refer you to should give you clear, up-front information on any referral fees, including how much they amount to, allowing you to make an informed decision about which business to select.
You should not feel obliged to take up any referral the estate agent makes – it is entirely your choice. It is illegal for estate agents to specify that you choose a particular legal representative as a condition of selling your home. Shop around for the best deals for you; although be aware that if you are looking for a mortgage for another home, in some cases multiple lender inquiries may have an impact on your credit score. If you’re in doubt, ask your mortgage provider for more detail about how they carry out credit checks.
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 (linked above) 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.
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.
- 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.
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.
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 if you Don’t Get Offers?
It can be disheartening when you are struggling to get viewings, or when the viewings are not generating offers. You should speak to your estate agent and discuss the feedback they have collected from previous viewings. Ask a friend to do a mock viewing and be honest about the areas for improvement.
Get advice from your agent on the following:
- Price – the asking price should be similar to comparable properties in the same area. What you paid for it originally and how much money you want to make are not relevant to the value of the property now. Remember that a property is only worth what people are willing to pay for it. You may need to consider lowering the asking price.
- Condition – are there any problems with the property? You might find that investing now to fix issues such as damp problems or unfinished DIY projects will result in more and higher offers from buyers.
- Marketing – do your photographs do the property justice? They should make the property look as bright, spacious and welcoming as possible. Buyers can find it hard to visualise the potential in empty rooms, so consider putting a single bed in the second bedroom or a table in the dining room.
- You may also want to reconsider your estate agent – could a different agent offer a better marketing package? Has a different agent sold a lot of properties similar to yours in your area recently? If you are thinking of changing estate agents, make sure you understand the terms of your contract with your existing agent as you may end up paying fees to two separate agents when you sell.
What to do if there are Problems in your 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 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.
Choosing a Removal Company
You need to consider how you are going to move your belongings out of your home. You may be able to move yourself, or you might consider using a professional removals company. You can opt to pack yourself or have the removal firm do it for you. This service will cost extra, but can remove stress from the moving process. While being part of a chain may limit your ability to choose your own moving day, you may get better rates and availability if you try to avoid busy times such as Fridays and the first and last days of the month.
When selecting a removals firm you should consider price, quality of service and availability. They will be responsible for all of your possessions, so choose them carefully.
You should get more than one quote before selecting your removals firm. Check:
- Are they a member of a trade association such as the British Association of Removers?
- Do they have insurance in place and are your belongings covered throughout the move?
- How are their online reviews? If there are issues, how are they resolved?
- Check the small print for additional charges – a professional company will explain them to you
- If your property is difficult to access or you have unusual items to move, ensure the removal company visit before giving you a quote.
Preparations for Moving
Between exchange and completion you should:
- Inform your removal company of your move date
- Arrange buildings insurance for your new property. This is usually a requirement to obtain a mortgage and needs to be in place to exchange. You should also consider taking out contents insurance to cover your belongings.
- Contact your utilities, water and broadband providers to close or move your old accounts
- Organise for your post to be forwarded to help protect you against identity fraud – the Royal Mail offers a post-forwarding service
- Keep paying your mortgage right up until completion
- Start clearing out unwanted objects – don’t forget about the attic or garden shed
- You are likely to have to move out of the property by lunchtime, so you should aim to be packed and ready to move the day before. The morning of moving day is rarely enough time to pack and clean a whole home, and this often causes delays for the rest of the chain.
- If you have a mortgage or loans secured against the property, your legal representative will request your redemption figure. A redemption figure is the amount it will cost to pay back your mortgage early, which consists of the remaining unpaid mortgage, any early payback charges and a certain amount of interest. Your legal representative will pay off this sum upon completion, and you should be aware it may be slightly different to the initial redemption figure due to mortgage interest.
Completion and 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.
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 microchip details (if applicable) You should also cancel the property insurance you have for your previous property if you have not yet done so.