Selling a property
There are five distinct phases to selling your property.
During the preparation period you should be doing three things:
b) work out how much it is going to cost you. This should include items such as relocation costs, purchase costs associated with a new property, solicitors' and agents' fees, tax (including VAT), mortgage penalties and even the cost of hiring a removals van.
c) Prepare the property for viewing and, hopefully, a quick sale.
Valuation and marketing
Your property should be prepared to pass the stiffest of inspections, both inside and out. Make sure that the person who values your home possesses the appropriate professional qualifications from the Royal Institute of Chartered Surveyors or the National Association of Estate Agents. A valuer, usually employed by your estate agent, will visit the property and put a price on it. The price needs to be set low enough for you to be able to sell it within the timeframe you require and also so that you can attract enough potential buyers to view the property. But it also needs to be set sufficiently high that you don't lose out on any money that you could have made from the sale. The agent will then advertise your property in the local press, in his window or on the internet.
When someone is interested in buying your property, they may make an offer below the asking price. It is up to you to decide how much or how little you are prepared to accept. If your property has been on the market for months with very few viewers, you may be happy to accept less than the valuation price just to be rid of it and move on. However, if several offers come in during the first two weeks of the sale period, you would be well advised to stick to the asking price. Whether you accept an offer or not depends on your situation and circumstances.
Once you have agreed the sale with a buyer, your solicitor will take over. Although the conveyancing process (moving title of the property from your name to the buyer's) takes the same length of time for buyers and sellers, there is much more onus on the buyer's solicitor in terms of the amount of work required so your legal bill on a property sale should be lower than for a property purchase. The normal total cost of disbursements for a seller usually amounts to an £8 land registry charge, plus legal fees. Though not usually charged as a percentage of the property value, most solicitors and conveyancers will link their fees to the price band in which your property falls. Expect to pay anything from £250 to £500 for solicitors fees on the sale.
This is the last stage of the process. It is the precise moment at which the sale is complete and you no longer own the property.
When to sell
The best time to sell is when there are many buyers in the market and prices are increasing, and when interest rates remain low.
Buying and selling property is also seasonal, with more sales being made between March and July each year. The year-end or Christmas period is slow, but a pick-up is usually achieved in the new year.
When not to sell
The worst time to sell is when there are fewest buyers in the market. If interest rates are temporarily raised to calm the market, you may find that buyers are in short supply. If both your neighbours put identical houses up for sale at the same time, it may be a bad idea for you to do the same. Try to follow the markets and read the signs. If your property is in a sought-after location, you should have no problem selling at a reasonable asking price regardless of the time of year or market conditions.
Choosing an estate agent
An estate agent can take care of all aspects of the property sale for you. A good estate agent will:
- Arrange a property valuation
- Advertise the property for sale - both online and in traditional media
- Court potential buyers
- Arrange and conduct property viewings
- Negotiate with potential buyers on your behalf
- Help to maximise the property sale price
An estate agent will ensure you avoid mistakes when selling your home, which could otherwise be costly. The agent will charge a commission of up to four per cent of the sale price, although this is normally around two per cent. The actual amount is likely to be at the top end of this scale if you instruct them as a joint or multiple agent, but at the lower end if you decide they should be the sole agent in charge of the sale. No fees are payable up front and you should accept only a no sale, no fee agreement with your chosen agent.
Try several agents and get recommendations from people living around you. Find out about estate agency bodies and only choose one which is professionally accredited.
An estate agent acting as a sole agency is acting alone in the sale of your property. You are contractually bound not to allow other agents to try and sell your property during the term of the agreement and will be liable for a commission payment to the sole agent should you do so and successfully sell the property.
Two agencies working together to try and sell your home is known as joint sole agency. The main advantage is that there will be more than one outlet or distribution channel for your property. You may pay slightly more in total commission than you would if there were just a single sole agent, as both businesses will receive a share of the commission when the property is sold.
Multiple agency is where you instruct a number of agencies working in competition with each other. Each is acting fully autonomously and the person or business that sells your property gets to keep the commission. It can be the case that the agent will spend less on marketing your property or act less aggressively trying to sell your property under these terms. This is because they are aware that there is a possibility that they will receive zero commission regardless of how much effort they put in, and so may focus their efforts on properties for which they are the sole agents.
If you need a quick and virtually guaranteed sale, you could auction your property. As long as the property is sold, you can guarantee that the transaction will be complete within 28 days of the auction date which offers a certainty of timescales not enjoyed by either of the other two methods.
Auctions are becoming increasingly popular with buyers but there is no guarantee that the seller will achieve the asking price of the property. Auctions are not suitable for everyone, as they attract a certain breed of buyer that may not be interested in every type of property. However, if you set the reserve price low enough, then you can virtually guarantee a sale, even if the price may not be what you are looking for. Selling your property at auction generally costs around two and a half percent of the price attained. There may well be additional charges involved for marketing your property, adding it to the catalogue or contributing to the hire of the auction room. These charges are not always made separately - sometimes they are incorporated into the commission payment - but you will probably have to pay for them separately if your property is not sold.
You could decide to do all the agent's work yourself by selling privately, and, if you manage to get a few lucky breaks along the way (such as already knowing someone who might be interested in buying your property), it is possible to spend no money at all on the actual sale of your house.
For those people whose overriding goal is to maximise the proportion of the sale revenue that ends up in their own bank account, selling privately is certainly the best option. You can directly constrain your marketing expenditure and not a single penny of the sale price will be lost in commission payments.
The main downside of a private sale is that sometimes it can take longer to sell your home, as your property does not enjoy the level of exposure that it would have if it were being marketed by a professional estate agent. But if time is not crucial, then saving thousands of pounds can be a good reason to go it alone.
Prepare for viewing
Buyers can be put off before they're through the front door. Make sure the outside of your property looks its best, with the rubbish in a bin, and communal hallways clear of junk. Make sure any lawn, garden or window box is a selling point. Clean, repair and repaint exterior surfaces. This should be done before you contact an agent. Caravans, white vans and old vehicles on and around your property deter more buyers than anything else. Get rid of them on viewing days.
Make sure that you clear away any junk or untidy looking areas in your property before potential purchases arrive on the doorstep. Aim to have your property in pristine, showhome condition at all times. This means sparkling surfaces in bathrooms and kitchen, fresh made beds, plumped cushions on sofas and chairs, polished furniture and clean floors throughout.
Disguise pet smells and make sure that fresh flowers are displayed. Make your home as warm and welcoming as possible to potential buyers.
Home Information Packs
A new way of selling your home was introduced in June 2007. You will have to prepare a Home Information Pack (HIP) which will be made available to purchasers and will cost the seller around £1,000 to prepare.
The Home Information Pack is like a traditional survey and will include local authority searches and the property's title deeds as well as energy performance information and certificate. Buyers and sellers will be given A-G ratings on their properties, as well as practical measures to cut fuel bills and carbon emissions. This must be introduced in response to new European laws.
The Government says that the home condition report - the most expensive part of the pack - will no longer be mandatory. Sellers will only be obliged to provide a half-HIP at an estimated cost of £150 to £200.
HIPs are supposed to speed up the house buying process, ensure that fewer deals fall through, help first-time buyers and reduce the scope for gazumping.
Selling your home can be a stressful and expensive experience. To make it easier on yourself you should:
a) choose a reputable estate agent
b) prepare your home for sale
c) build in plenty of time - the process can take months
d) find out what it is going to cost and make sure you can afford it.
This is meant as a general guide and should not be seen as legal advice.