Selling properties is a lengthy and tiring process for many homeowners who are looking to downsize, begin renting or move up the property ladder. Lestons believes that it is important for everyone to understand the process behind selling properties, and the legal considerations that they will need to make.
Selling properties with existing mortgages.
If you are still within your mortgage term, it is important to check whether any fees exist in the mortgage agreement which comes into effect when you sell your home. You will need to ensure that your property is either held on a standard variable rate (SVR) or is ‘portable’ to ensure that you pay no extra fees on the hidden property. If your agreement doesn’t cover either clause, you may face early repayment charges (between 1-5%) of your remaining mortgage debt.
Preparing to sell your home.
To maximise profit from the sale of your home, owners should consider redecorating the exterior and interior to best represent the value of the property – they may do this themselves or hire professionals to prepare the home for sale. Owners should then get their home valued – this may be done by checking the house price sales in the last month on your street via online agents, and estimating the value of your home. Alternatively, have estate agents come into your property and value your home – it is recommended to get more than two agents to value the home to receive the best estimate. It is best not to reveal the value of the home amongst the agents as this may skew their valuation.
Owners will then advertise the home. This can be done online or on the high street agencies, although they will charge costs to you for the service provided.
Conveyancing.
Once a buyer is found who is willing to purchase the property and you have accepted their offer, solicitors are brought in to deal with the legal matters and paperwork. This includes having the solicitors begin the conveyancing process. This includes:
- Completing detailed questionnaires,
- The production of draft contracts and a negotiation phase,
- Paying off the existing property mortgage (a redemption figure),
- Exchanging the contracts and;
- Completions
Questionnaires
Your solicitor will request that you complete questionnaires regarding the property. These may include Forms TA 6, TA 7, TA 10 and TA 13. Owners must fill these forms out truthfully and to the best of their knowledge. If any information filled in is untrue, then you could be sued for compensation and the buyers may pull out on the fear that you are misleading them.
Draft contracts and negotiation.
Your and the buyer’s solicitors will then negotiate the contract that will be made, after which a full contract will be presented to both parties.
Paying off the existing mortgage.
You may need to pay off the existing mortgage. To do this, you will request a redemption figure from your bank or lender, which you will pay once the sale of the property is at the completion stage.
Exchanging contracts.
You and the buyer will need to agree on a date and time to exchange contracts. Alternatively, this may be done through a telephone conversation. This exchange usually defines the price, date and process of completion. Until the contracts are exchanged, either party is free to withdraw from the transaction without penalty. Your solicitors will exchange the contracts and you will receive the buyer’s deposit (about 10% of the property price). You will only need to move out after the completion stage.
Completion.
You will hand over the keys (although if you have an estate agent they will do this step for you) alongside any other spare keys to the property. The solicitor will then receive the outstanding balance of the sale, hand over the deeds to the property and pay off the mortgage with the proceeds of the sale. You must leave behind anything that was agreed to be sold but can otherwise empty the property of anything else that was not agreed to be sold.
After completion.
Owners will then pay the solicitor and/or the estate agent for their services.
What Lestons can do for you?
Lestons can take a guided approach to the conveyancing process – ensuring that your solicitor and you are fully aware of the work that they need to do.
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