This does not pretend to be a comprehensive guide. Instead, I’d just like to run through the basics. Hopefully this article will orient you as you proceed along this rather overwhelming journey! The typical steps are listed here in chronological order.
1) Talk to your existing lender
If you have an existing mortgage, you will want to know:
- Your redemption figure, i.e. how much money will be needed to pay off your mortgage. (Your solicitor will eventually check this too).
- Whether there are any early repayment charges. These will apply if you don’t need another mortgage or if you change to a different lender.
- Whether you can port your mortgage i.e. swap your existing mortgage terms onto another property. Normally a lender porting your mortgage will insist that the house you are buying is about the same value or less than your current home.
2) Talk to a mortgage broker
If you are buying another property you may need a mortgage. You are free to choose your own mortgage broker. Your agent may suggest one, but as with solicitors, they may add on a referral fee. I generally recommend Grange Mortgages or Yellow Brick to my clients. I will earn a small commission but this will not affect what you pay. The broker will provide:
- mortgage advice
- estimates of how much you can borrow
- information on the best available deals for your circumstances (porting may or may not not be the best option)
- access to a Mortgage in Principle – although this has no formal status, it is a good thing to show estate agents, as it serves as a declaration of your commitment to buying, your relationship with a broker, and a strong indication of your buying power.
3) Decide whether to tie your sale in with your purchase
This is the conventional way to buy and sell a property. You would aim to complete on all the transactions in the chain of properties at the same time. Putting a chain together can be a stressful and difficult process, especially in a ‘hot’ market where there may be a lot of competition for any houses on the market. You will probably be making offers against first time buyers and cash buyers. I often hear of buyers being pipped at the post time after time, and sellers taking their property off the market because they can’t find anything to buy.
4) Break the chain
The alternative to tying together the buying and selling transactions is to ‘break the chain’ by selling your property first. This route, with a period of renting in between selling and buying, or staying with family or friends temporarily, is becoming increasingly common. The advantages are:
- No pressure to meet a buyer’s or seller’s time scales
- Less chance that you’ll have to compromise on your sale price
- You won’t be forced into buying whatever is on the market – you can wait for a better property to come along
- You will look like a much better candidate when you are making offers
The disadvantages are
- The cost of renting in between
- The cost of storing your belongings
It is quite common for sellers to say they are willing to vacate without buying anything, but then part way through the transaction they find something to buy. This can be rather annoying, especially when it happens late when you're close to exchanging contracts! It is wise to be prepared for this eventuality.
5) Choose an estate agent
The conventional method is to invite two or more agents to visit your home and give you a market valuation. A market valuation does not tell you what your home is worth. That’s a surveyor’s job. Instead, each agent will advise you on the price they believe you should advertise your property for. Listen to their strategy advice – don't just focus on the £s!
You should use the valuations as an opportunity to meet some agents face to face and decide who has the necessary rapport, skills, tools, knowledge, availability, and commitment, to sell your home successfully. But remember:
- The person who visits your house may be a valuer first and foremost, and may never visit you or talk to you again! Ask who will deal with enquiries, who will accompany viewings, who will negotiate the sale, and whether any of these members of staff will visit your house.
- Don't simply look for the most established or popular agent with the most houses on their books. They may be the biggest, but they may be over-extended and pressured, and they may not be the best!
- Check what marketing strategy each one offers, and compare their fees. Make sure to watch out for any up-front or non-returnable fees.
If you are abroad, please note that in the UK the estate agent only works for the seller, and is paid by the seller via a commission on the sale price when the sale completes. In the UK these commissions are typically around 1.5% which is much lower than their US equivalents.
6) Instruct your agent
You will need to sign a contract with the agent, then you will need to provide them with identity information. Exact requirements (e.g. a meeting, a passport, a photo, or a driving licence etc) will vary depending on the agent’s identity verification platform, and the risks of a particular transaction. They are not being awkward – this is a legal obligation because they have to comply with anti money laundering legislation. Please provide what they need promptly, as they cannot do anything to help until this is done.
7) Order an Energy Performance Certificate (EPC)
Legally you have to apply for an Energy Performance Certificate or EPC within seven days of putting your home on the market. Any previous EPC (if you have one) is valid for ten years. Even if it's valid, you may want to get a new one if you have upgraded your home and you think the rating may have improved. You must have an EPC available to buyers within 28 days of marketing. You can easily check whether your EPC is valid and find a register of suppliers on the Government Website. Your estate agent may suggest a firm or a portal through which you can find an EPC supplier. It is not necessary to follow this recommendation, and you should bear in mind that a referral fee may be added to the bill.
8) Choose a conveyancing solicitor
Solicitors can be very busy so it’s worth speaking to the ones you’d like to use so you are not caught out when you get a sale. Although you can’t officially instruct them until a sale is agreed, they can do a few things up front, for example they can provide the forms you need to fill in, and can help you to start gathering the documentation that will be needed.
If you are not sure who to use, your agent may suggest a firm or a portal through which you can find one. Bear in mind a referral fee may be added to your bill. Estate Agents are legally obliged to declare this fee.
Your estate agent will arrange to photograph your home. Depending on your agent, this may include standard photos, speciality photos such as lifestyle photos, elevated shots, or dusk shots, video tours, with or without a commentary, drone shots, drone videos, and self-guided 3d tours.
Preparing your home for photography is a very important step, so much so that I often provide my sellers with a stylist to help them with this process. A well presented home could sell quicker and significantly, it could achieve a higher price. You are aiming to make the rooms look brighter and bigger, and you are trying to make it easier for potential buyers to imagine themselves and their possessions in your space. Decluttering is the most important part of this preparation. Not only is this free, but it could make removals cheaper and you could raise some vital funds for decor and furnishings at your new home. There is plenty of advice onlne if you don’t have access to a stylist.
10) Approve the details
The estate agent will send you the draft details and photos to check. Do this thoroughly. It is important that there are no mistakes, and that no material information is omitted.
11) Conduct viewings
Either you or your agent may conduct viewings. I would generally advise that the agent carries out the viewings, but where the house has unique features or complexities, it is often useful to meet potential buyers yourself, so you can answer questions. It is also difficult to remain objective when conducting a viewing of your own house. For example, buyers don't usually want to hear about what you have done to the house, or worse still, what you planned to do but didn't. They want to imagine themselves in the house, without distractions. They want the house to feel welcoming, not the seller to be welcoming!
Viewings are usually on an ad hoc basis, but if the property is likely to be popular, your estate agent may book the viewings close together in blocks. If there is a viewing day, it’s a good idea to go out for the day so that the estate agent can negotiate freely on your behalf.
12) Receive offers
Your estate agent is legally obligated to pass all offers on to you. Remember, they are working for the you, the seller, and they will negotiate with each buyer to get you the best possible price – but it’s not just about the money. The estate agent will also explain the relative merits of any potential purchasers, including whether they are first time buyers, cash buyers, or in a chain. You are not obliged to follow their advice, but there is normally good reason to take it.
13) Accept an offer
When you have decided on the best offer, you can formally accept it. The estate agent will tell the lucky buyer on your behalf. You can change your mind at any point up to exchange of contracts. If a seller accepts a higher offer at the last minute we call this gazumping, and if the buyer lowers their offer at the last minute, we call this gazundering. This can cause much distress and anger. Culturally the British think this is wrong and unfair. Some property buyers, sellers, and agents still promote this hard-nosed way of thinking, but many English buyers and sellers would prefer to follow the Scottish system, in which properties are always taken off the market when an offer is accepted and gazumping is almost unheard of.
14) Instruct your solicitor
At this point you will formally instruct your solicitor to act for you in the sale and in any related purchase. Just like the estate agent, they will need to do identity checks, which are required by law. They will also ask you to fill in some initial forms confirming the basis on which they will be acting for you.
Your buyer will also be beginning the process of instructing a solicitor and applying for a mortgage. This is something which they cannot do in advance of choosing a property, so it can take a little time. Their solicitor may not start searches or raise enquiries on a draft contract until the mortgage offer is in place.
15) Memorandum of Sale
The estate agent now prepares a Memorandum of Sale detailing the buyer’s name and address, the seller’s name and address, and the full contact details for both their solicitors. It is important to provide these details as quickly as possible if you have not yet done so, as without it, the estate agent could continue marketing the property, and the solicitors will not start work until they have received it.
16) Offer on a property and apply for your mortgage
If you have not already done so, now is the time to offer on a property to buy, and apply for a mortgage through your mortgage broker. You will need to act promptly to ensure that you obtain a lender’s valuation and an offer in good time, and that the money can be released when required.
17) Fill out the property information forms
If you have not already done so, now is the time to fill out the property information forms you received from your solicitor. You will need the TA6, TA7 (for leaseholds only), and the TA10. You can download samples of these forms on the Law Society Website. Don’t worry too much if you don’t know the answer to any questions. Just put, “Don’t know” or "TBA".
18) Let the buyer’s surveyors in
At some point a surveyor may come to see your property. If the buyer is getting a mortgage this will be a surveyor who is acting for the buyer’s lender. They will value the property for lending purposes, and ensure that it is mortgageable. There may also be an independent surveyor who is employed by the buyer, particularly if they are buying cash. At this point things can go wrong. The surveyor may downvalue the property or raise significant concerns about it. Be prepared for disappointment or a renegotiation of the price. Nothing you can say will change matters.
19) The Draft Contract
Your solicitor will use your TA forms to start putting together a draft contract pack for the sale of your property. They will request lots of supporting documentation such as compliance certificates and guarantees. Make sure that you supply everything promptly so that there are no undue delays. If you can’t find something, don't delay sending the rest of the information, just explain and send whatever you do have. When the pack is ready, your solicitor will send it over to the buyer’s solicitor.
The buyer’s solicitor will be conducting searches on your property. They often ask the buyer to make a payment on account before they will start the searches. The length of time this takes varies greatly around the country. If this causes an unacceptable delay it is sometimes possible for the buyer to take out an indemnity policy and proceed without them, but some solicitors will advise against this, and some lenders will not allow the purchase to proceed on the strength of an indemnity policy. Unfortunately you may simply have to wait for the Local Authority to get on with it. The only way to speed this up is to apply for the searches yourself when you put your property on the market. You can give them to the buyer or recoup the cost from them. Just remember that searches need to have been ordered within the last 6 months to be valid at the time of completion.
21) Deal with enquiries
The buyer’s solicitor will now send enquiries to your solicitor, to fill in any gaps in the information they need. Your solicitor may come back to you with more questions, and there may be a great deal of toing and froing until there are no more questions. The more information you can supply, and the quicker you can supply it, the better.
Eventually you will be ready to exchange contracts – there are two last jobs to do.
22) Choose a completion date
You and the buyer will have to decide a mutually acceptable completion date, normally leaving between 7 and 28 days between exchange of contracts and completion.
23) Sign the contract
Your solicitor will send you the contract to sign, but if they are local, you can visit the solicitor to sign the contract in person. Signing contracts does not in itself make the transaction legally binding. You will only be bound by the contract on exchange. The solicitor will hold the signed documents on file in readiness for exchange, so there is no last minute rush to get them signed.
24) Exchange contracts
The solicitors do not literally swap contracts. Each pair of solicitors holds a conversation on the phone. During the conversation each of the solicitors reads out their copy of the contract to make sure they are exactly the same, and they record the phone conversation as evidence. The transaction becomes legally binding at this point. If either the buyer or the seller decide to pull out after this, they will likely be liable for severe penalties to compensate the other party. If you are the seller and you pull out, the buyer’s deposit will be returned to them and you may be sued.
You remain responsible for your property after exchange. You must keep it in the same condition that it was in when your buyer agreed to buy it. It is not unusual for the buyer or the estate agent to come round before completion to ensure that everything is hunky dory.
It is the responsibility of the buyer to insure the property on exchange, but it is still advisable to keep your buildings and contents insurance going until completion, as you never know what disaster might happen!
25) Book removals
Now that you have a completion date you can get removals quotes and book a company. If there will be a gap between your sale and your purchase, many removals companies offer a temporary storage facility.
26) Move out
You can move out at any time up to and including the day of completion. There is no need to wait until completion day.
Completion usually, but not always, happens at midday on the prearranged completion day. The money is transferred and the deeds of the property are transferred from the seller's solicitor to the buyer's solicitor. Unfortunately delays can happen, particularly when one of the lenders does not transfer the money in time. I would always advise having a contingency plan, and perhaps even insurance to cover late completion.
Normally the solicitor at the bottom of the chain calls the next solicitor up to say they are ready, and so on to the top of the chain, then back down again. When everyone is ready the property changes hands. Either the seller or the estate agent hand over the keys to the buyer. Finally the buyer’s solicitor registers the transfer of ownership with the Land Registry.
28) Final transactions
Your solicitor will use your buyer’s payment to
- pay your mortgage lender the outstanding amount of your mortgage, in accordance with the lender’s final redemption statement.
- pay for the property you are buying
- pay the stamp duty for the house you are buying
- pay your estate agent their fees.
All this normally happens on the same day.
29) Completion Statement
Your solicitor will send you a final statement itemising everything they have spent, and enclosing any balance.