Selling A Property
Deciding who to sell to
Whether the seller has arranged to sell the house privately or with an estate agent s/he
may find that s/he receives more than one offer for the house. The seller can sell the
house to whomever s/he wants to and does not have to sell to the buyer who offers the most money.
The seller may wish to take into account whether the buyer: -
Is a first time buyer
Has found a buyer for his/her property. If so, is it part
of a chain of buying and selling and how long is the chain.
Is paying cash or is likely to get a mortgage.
Deciding on the price at which to sell
If the seller is using an estate agent, the agent negotiates with the
potential buyer(s) about the price. The estate agent should try and obtain the best possible
price for the seller. If the seller is acting alone, s/he must negotiate her/himself. The
seller does not have to accept the first offer put to her/him, but should look to the estate
agent for advice.
Accepting the offer
Even if the home seller has accepted the offer, there is nothing
in law to prevent her/him from changing her/his mind and accepting a higher offer
from someone else. The home seller should also bear in mind that when an offer
is made and accepted the potential homebuyer can also withdraw, for example, s/he
may not get a mortgage, or the survey may show up some structural problem. If
the seller is selling her/himself it may be a good idea to keep the names and
addresses of all potential buyers who make offers, in case the one s/he accepted
Exchange of Contracts
When contracts are exchanged and before completion, the buyer
may wish to visit the house, for example to measure up for carpets or to get an
estimate for building work.
The seller should inform the fuel boards and telephone services that s/he is leaving
and ask for final readings to be made of all meters on completion day. The seller
should also inform their local community charge registration office responsible for
If the buyer is paying a deposit, this will be paid to the seller's solicitor at
exchange of contracts. The solicitor will hold this deposit until completion.
The seller must arrange to leave the house empty by completion
day and to hand over all keys.
The seller's solicitor will receive the rest of the purchase price from the buyer
and will pass this, together with the deposit, to the house seller.
Buying a Property
Arranging a Mortgage
If the buyer has not already begun to arrange a mortgage,
they should start to do this now. It should take about three weeks from the
application for the mortgage to the formal offer being made by the lender.
However, this timescale may vary. Whoever agrees to lend the money will want
to have the property valued. This is to make sure that the lender could get
the loan back if for any reason the Buyer stops paying the mortgage and the
house had to be sold again. The valuation will be done by a Surveyor on behalf
of the lender but the Buyer will have to pay for this valuation. The fee will
be payable in advance. usually when the buyer sends a completed mortgage
application form to the lender.
If the amount of money to be borrowed is more than a certain percentage of the
valuation of the property (usually 75% - 80%), the lender makes it a condition
of the loan that the buyer takes out extra insurance to cover the extra amount.
The Buyer pays a single premium to the lender, which is usually added to loan,
this is known as a mortgage indemnity guarantee.
Making An Offer
When a buyer decides s/he would like to buy a particular property
s/he does not necessarily have to pay the price being asked for it by the owners.
S/he can offer less if, for example s/he thinks there are repairs to be done which
If the property is being sold through an estate agent, the Buyer should tell the estate agent what
s/he is prepared to pay for the property. The estate agent will then put this offer to the
If the Vendors do not accept the first offer put to them by the Buyer, they can decide to
make an increased offer. There is no limit on the number of times a Buyer can make an
offer on a property.
If the Buyer makes a written offer it will always be made subject to contract. This means
that the buyer will not be committed to the purchase before finding out more about the
sate of the property. If the Buyer makes an oral offer this is never legal binding.
When the Offer has been Accepted
When the Buyer's offer for the property has been accepted s/he will have to consider
the following: -
Whether a holding deposit is payable
Arranging a mortgage
Whether a survey is necessary
Who will do the necessary legal work
Whether s/he wants to buy with someone else
Once the owner has accepted an offer the Buyer may
be asked to pay a small deposit to the estate agent.
This is not usually more than 500. It is meant to show
that the buyer is serious about going ahead with the purchase.
It is repayable if the sale does not go ahead.
Buyers may find it useful to print off a copy of our Guide to selling and
buying which provides a realistic timetable of events to enable all parties
concerned to conclude the sale as quickly as possible.
Arranging A Survey
The valuation which is done for whoever is lending the
money is not a survey, a Buyer should consider whether or not to have an
independent survey carried out in addition to the valuation. The survey
would not only consider the value of the property but would also examine
the structure of the property and should identify any existing or potential
There are two levels of survey that a buyer can choose between: -
Full Structural survey
This is suitable for a property which is large, more than
80 - 90 years old or in doubtful condition.
Intermediate or House / Flat Buyers Report
That gives a report on the condition of the parts of the
house that are easy to see and to get at and may recommend further tests or
investigations, for example, a specialist check for woodworm.
This is particularly suitable for properties built this century, which appear reasonably sound.
This is much cheaper than a full structural survey. It is possible for the
Buyer to use the same surveyor who does the valuation to carry out the survey and this may be
cheaper. However, the buyer can use a different surveyor if so desires.
If the surveyor reports that there are some problems with the property, the
Buyer will have to consider whether s/he still wants to go ahead with the
purchase or wants to negotiate further with the seller about the price. The
surveyor will usually advise the buyer as how to any problems s/he has
identified should be dealt with and the likely costs of this.
Choosing Who Is To Do The Legal Work
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The legal process of transferring the ownership of the
property from the present owner to the buyer is known as conveyancing. The
buyer should decide who s/he wants to do the conveyancing work. S/he can
choose to: -
Use a solicitor
Use a licensed Conveyancer
Using a Solicitor
Most firms of solicitors offer conveyancing services.
Although all solicitors can legally do conveyancing, it is advisable to
choose a solicitor who has experience of this work.
Using a Licensed Conveyancer
A Buyer can use a licensed conveyancer to do his/her conveyancing. Licensed
conveyancers are not solicitors but are licensed by the Council of Licensed
Conveyancers. If a Buyer wants to find out if a local conveyancer is
licensed s/he can write to: -
The Council of Licensed Conveyancers
16 Glebe Road
Essex CM1 1QG
TEL: 01245 349599
Finding How Much It Will Cost
Before making a choice as to who will do the conveyancing, a buyer should
be advised to find out the probable costs of the conveyancing. It is
important to contact more than one solicitor or licensed conveyancer, as
there is no set scale of fees for conveyancing. The Buyer should check
whether the figure quoted is a fixed fee or
depends on how much work is involved. Check that the figure includes stamp
duty, search fees, land registration fees expenses and VAT and get a
breakdown of these costs, find out what charges, if any, will be made if
the sale falls through before contracts are exchanged.
Steps in the Legal work of Buying a Property
Although it is impossible to give a precise idea of how
long the legal work involved in buying a property takes, it is impossible to
offer guidelines. From having an offer accepted to completion can take up
to 12 weeks. However, if there are any problems the time may be longer.
Once the Buyer has instructed the Solicitor or Conveyancer to act for her/him,
the seller's solicitor or licensed conveyancer draws up a contract which
will eventually be signed by the buyer and seller. However, before the
contract can be signed, the buyer's solicitor or conveyancer must make sure
that there are no problems with the ownership of the property, rights of
way, access, or future developments in the area that might affect the
property. This is called 'making enquiries and searches". The solicitor
or licensed conveyancer makes the enquiries and searches as follows: -
These are enquiries made to the local authority about any matters which
affect the property which involve the local authority, such as whether
there is a compulsory purchase order on the property, local searches also
include questions about any proposed changes or development in the area
that might affect the property such as roads, housing, shops. During the
local search, the Local Land Charges Register is also checked. This
gives information about any matter, which affects the property such as
tree preservation orders, if it is a listed building or in a conservation
area; and enquiries made to the seller by the solicitor or licensed
conveyancer. These are a set of standard questions about the property,
boundaries, neighbour disputes and fixtures & fittings that will remain
in the property. There may also be additional questions that the solicitor
or licensed conveyancer thinks are necessary, such as the transferability
of guarantees for any work done on the house, for example, a damp proof
Arranging to pay the 5% Deposit
Whilst the solicitor or licensed conveyancer is making
enquiries, the buyer should sort out how s/he will pay the deposit that
has to be made when the contracts are exchanged. This deposit is usually
5% of the price of the home. If the buyer is unable to provide the 5%
deposit some mortgage lenders do provide 100% mortgages.
Insuring the property
The buyer should make sure the buildings insurance
is arranged from the date of exchange, because once contracts have been
exchanged the buyer is responsible for the property.
Exchange of contracts
The final contract between the buyer and seller is
prepared when: -
The solicitor or licensed conveyancer and the buyer are satisfied with the final outcome of all the enquiries, any surveyors report has been received and any necessary action taken from the mortgage offer has been received. Arrangements about the payment of the deposit have been made and the date of completion has been agreed.
The buyer and seller each have a copy of the final contract which they must
sign. These signed contracts are then exchanged. At exchange of contracts
both the buyer and seller are legally bound by the contract and the sale of
the house has to go ahead.
The buyer should make arrangements for the supply of gas, electricity and
telephone services and make sure that the seller is arranging for final meter
readings to be made.
Completion of the purchase usually takes place a couple of days after exchange of contracts. On the day of the agreed completion: -
The mortgage lender releases the money.
The deeds to the property are handed over to the
buyer's solicitor or licensed conveyancer.
The seller must hand over the keys and leave the
property by an agreed time.