Guide to Selling Your Home
What is my home worth? Using an estate agent to sell my home What do estate agents do for their money? How much will an estate agent charge to sell my property? What can I do to help the sale of my property? What are Home Information Packs ( HIPs)? When does “sold” really mean sold? One final thought (two actually)Next to buying a property, the most stressful task undertaken in the property market is selling a property. If you are selling a property, it is most likely that you bought it in the first place and therefore have already experienced the delights of the property market and the various steps you have to take before the deal will be completed.
| What is my home worth? |
Top |
As with anything you wish to sell, the first thing to do when selling your property is to establish how much it is worth. The easy answer is that your property is worth what people are prepared to pay for it, but it is a little more complicated than that. Your idea of what your property is worth may differ from that of anybody wanting to buy it, so make sure that you don’t over value your property, or else it could take you a very long time (if at all) to sell it. If there has been a recent sale of a similar property in your neighbourhood, find out how much the property was sold for, how much was the property on the market for, and if possible, how long it took to be sold. Take a look in the local estate agents windows to get an idea of what similar properties are going for. Armed with all this research you should have a good idea on how much your property is worth.
| Using an estate agent to sell my home | Top |
Most people, in fact over 90% of those of us who have gone through the process of selling a property, have done so with the assistance (or not) of an estate agent. Of course, as with all service industries there are some good estate agents and there are some bad estate agents, so if, for example, the estate agent you chose has not found any potential buyers for your property, dump them and go with another one, you are the customer after all. If you decide to use an estate agent to sell your property for you, the first thing the estate agent will do, is make a estimate of the value of your property and suggest a selling price. You do not have to accept the selling price if you consider that your property is worth more, but remember that the estate agent is not looking at your property with ‘rose tinted glasses’. If there is quite a discrepancy between your valuation and that of a selling price proposed by an estate agent, you could arrange to have for a Chartered Surveyor carry out an independent property valuation. This will help you to estimate how much your house is worth and where to set the asking price. Whilst estate agents provide a marketing service for your property, they don't give underwritten valuations. Estate Agents do not value your property for you, they only estimate of what they think your house is worth. Also in some cases, their estimates may be made for reasons other than the property itself, they might have estimated the asking price too high so as to get your business, or estimated the price too low so as to get a quick sale.
| What do estate agents do for their money? | Top |
Once the selling price has been agreed, and you have signed the paperwork giving instructions for the estate agent to market the property on your behalf, the estate agent starts to earn their fee by carrying out the following:
• Print leaflets showing details and asking price for the property
• Place an advert in the local press again showing details and asking price for the property
• Put up a “FOR SALE” sign outside the property, providing the seller approves
• Actively market the property and show any prospective buyers around, and make the prospective buyers aware of all the relevant selling points
• Report back to the seller on a regular basis as to what ( if any ) progress has been made
• Act as a negotiator for the seller, with potential buyers regarding offers received for the sellers property
Note. An estate agent is required by law to inform the seller regarding all offers received for the sellers property at whatever stage of the selling process (unless the seller has told the agent otherwise).
| How much will an estate agent charge? | Top |
Make sure, before you sign any document agreeing for the estate agent to act on your behalf in selling your property, that you fully understand their charges. By law, all estate agents are required to explain their charges before you sign any agreement. Most estate agents usually charge a commission that is a percentage of the price that the property is finally sold for. It pays to approach a number of local estate agents (if there are more than one) to get an idea of charges. It is not necessarily the case that the lowest price offers the best value for money. It is worth asking friends or family what estate agents they used and were there any good.
Having decided on the right estate agent for you, the next thing to decide is whether or not to give your chosen estate agent sole rights to selling your property, or go with multiple estate agents. It will be cheaper regarding commission if you sign up with a sole agent rather than signing up with two or more. However, make sure that the sole selling rights option is the right one for you, otherwise you could end up paying out commission on the selling price of your property to the estate agent even though you sold your property privately. Most agents charge 1.5% - 2.5% per cent for sole agency and 2.5 - 3.0% for multiple agency. At the very top end of the market, agency fees can go over 5%.
If you decide on using a sole estate agent, it may be better for you to put a limit on the "sole agency" period, for example eight weeks. This will give the estate agent an incentive for selling your property within the agreed sole agency period, and if you are dissatisfied with the estate agent, after the sole agency period has expired, you can go and find another one. Although using multiple estate agents costs more in terms of commission, the benefit is that you may get more potential buyers and therefore sell your property faster.
Once you accept an offer from a potential buyer and a sale price is agreed, which at this stage is always "subject to survey and contract", your estate agent contacts in writing the buyer and both sets of solicitors, and of course the seller (that is you) to confirm the property sale and asking that both sets of solicitors draw up a "draft contract". They put up a "SOLD" board outside the property (providing you agree), bearing in mind that at this stage in the selling process, the property is sold ‘subject to contract’. The estate agent will check with all appropriate parties such as the solicitors, mortgage providers, surveyors, and where necessary builders, up until the point of the ‘exchange of contracts’, where at this stage in the sale of your property the sale becomes legally binding. The final act of the estate agent is to present you with the bill for their services regarding the sale of your property.
| What can I do to help the sale? | Top |
If you want to get a fair price for your property and you want to sell it within a reasonable time, then you are going to have to make it look as good as it can for those people who may be interested in buying it. Put yourself in the place of a prospective buyer and think about any faults your property may have and whether those faults may deter a prospective purchaser from making an offer. It does not mean you have to install double-glazing or central heating if your property has not got them. However, if your property is in need of some major and minor repairs, it would be well worth your while to get them repaired. Look to replace that broken window, fix the leaking tap, and repair the rotten fence panel. Make sure that you keep your property clean and tidy for the visit by any potential buyer. The more space there appears to be in you property, the more the potential buyer will like it. Give the kitchen a thorough going over, and make sure there are no cooking smells in there when a potential buyer comes to call, you may love spicy food but your potential buyer may not. Check out your garden if you have one, cut the grass and tidy up the flowerbeds. If you have any pets, keep them out of sight whilst being visited by any prospective buyers, and try and eliminate any animal smells that may be lingering.
Your property may need a ‘lick of paint’ to brighten it up a bit, but don’t go mad, make sure you use neutral colours and not that vivid yellow and green you like so much. You can paint your new property with that colour arrangement. Just like selling a car, make a folder up of and documentation you possess regarding you property, such as damp-proof guarantees, building work receipts, warranties for such things as boilers. Other paperwork to put in the folder are things like gas, electric, and water bills, so you can show your prospective buyer the approximate running costs of your property. Finally make a list of the “fixtures and fittings” such as carpets, curtains and light fittings that you will be including in the sale.ll.
| What are Home Information Packs ( HIPs)? | Top |
InHome Information Packs (HIPs) arrived on the home property scene in August 2007, and since 14 December 2007 every home that goes up for sale in England and Wales, regardless of what size it is, must have a Home Information Pack.
Included within your Home Information Pack (HIP), must be an Energy Performance Certificate (EPC) from an accredited Energy Assessor, who visits the property to collect the relevant data and creates the certificate. This data includes the date, construction and location of the house and relevant fittings (heating systems, insulation or double glazing, for example).
You, or (if you are employing the services of an estate agent to sell your property) your estate agent are required to provide a potential purchaser with a copy of the Home Information Pack (HIP) associated with your property, or any document from it on request, and within the 'permitted timescale'. The 'permitted period' is either 14 days following the request for copies, or, if later, the day on which a payment for copies is received.
When you send a Home Information Pack (HIP) to a prospective buyer of your property, you cannot charge any money for the Home Information Pack (HIP) itself, but you can charge for making copies of it and for posting it.
The following compulsory documents must be included in a Home Information Pack:
• Home Information Pack Index
• Energy Performance Certificate
• Sale statement
• Standard searches
• Evidence of title
• Additional information for leasehold sales, where appropriate.
Some documents in the Home Information Pack are optional. These include:
• Home Condition Report
• Legal summary
• Home use/contents forms
• Other documents - rights of way, ground stability and actual or potential environmental hazards such as flooding and contaminated land. Sellers will also want to include guarantees and warranties for work already carried out on their homes.
The cost of preparing your Home Information Pack (HIP) will depend on your property. Prices start at around 200.00 GBP by providers for a ‘low cost’ Home Information Pack (HIP), but other providers of Home Information Packs charge quite a bit more. It was proposed by the government that the cost of preparing a Home Information Pack would cost approximately 350.00 GBP.
Failure to provide a Home Information Pack, or supply an incomplete pack during the process of selling your property, could result in you being fined £200. Even worse, you probably will not be able to find a buyer to sell your property to.
| When does “sold” really mean sold? | Top |
The law regarding the sale of property covering England and Wales (but not Scotland) is that the deal struck between the buyer and the seller of the property is not legally recognised until after contracts have been exchanged. Any offer that a potential buyer makes on the property that you have for sale will be "subject to survey and contract", which means that neither you nor the buyer is legally bound to go through with the deal, and each may pull out without incurring a penalty up until the contracts are exchanged.
To actually exchange contracts you will need the services of a solicitor who will sort out all the relevant legal work involved. Your solicitor will:
• Release details of the deeds to your buyer's solicitors
• Answer any questions the buyer's solicitors may ask about your property
• Draw up a "Contract of sale" for you to sign
• Exchange the contract on your behalf
• Receive the deposit from the buyers solicitor
Once you have exchanged contracts, that is it, there is no backing out. Both parties are now legally committed to completing the sale. Pulling out may incur legal action as well as high costs. Once the contracts have been exchanged, the property does not belong to you any more, it now belongs to the buyer, and therefore the buyer takes over all responsibility for it, including insurance.
| One final thought (two actually) | Top |
One thing to keep in mind at all times is never, repeat never take any gambles or risks when selling (or buying) your home. Things like exchanging contracts on a new home without having sold your old one! If for any reason your buyer pulls out of the sale at the last minute, you will be left “up the creek without a paddle”, in other words, because you have exchanged contracts on your new home, you are legally obliged to buy it and it is up to you to find the money to pay for it with! Not good for the stress levels or blood pressure.
Another thought is, that however much you dislike or even hate your potential buyer or buyers, do not let these feelings get in the way of the sale, if they are cash buyers and offer you a high price, take it, do not let personal feelings stop the deal, if you really hate them that much, send them a letter from your new home.
