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Sellers Guide

If you are thinking of selling your home then this sellers guide has all the information you need to make a decision. To help you decide whether the time is right and what to do in order to get the best price, we have put together a seller’s property guide.

1. Understanding The Market

There are three types of market conditions that you can choose to sell in: a Seller’s Market, a Balanced Market or a Buyer’s Market.

Seller’s Market: In a Seller’s Market, house values will be increasing and selling more quickly. Buyers will have fewer homes to chose from and the negotiating power rests with the seller. In a seller’s market you have the benefit of a high sales price, however, if you are purchasing – especially a larger property – you will be paying more for your new purchase.

Buyer’s Market: In a Buyer’s Market there are less buyers than there are houses for sale. Therefore, buyers have more choice and the power of negotiation rests with the buyer. This means that sellers will lower their prices to attract the buyers and house prices tend to fall. The time it takes to sell is increased due to the reduction in buyers in the marketplace. If you have lots of equity in your property, this can be a great time to purchase a new family home as you have the opportunity to buy a bigger house for less money.

Balanced Market – In a Balanced Market neither buyers nor sellers have an advantage. From a seller’s point of view, you have to prepare your house as much as possible as you will need to attract the buyers that are there. The numbers of properties for sale match the number of buyers which means the house prices are stable and sell in an average time frame.

2. How To Choose An Agent

Do not choose an agent solely on the price they value your property or the commission that they charge.  It is advisable to make your decision on many aspects. Ask your agent to answer the six questions to help you get a better overview of what they are going to do for you before you sign a contract:

  • Question 1: How much is my house worth?
    An agent will guide you through the market discussing the current market conditions and provide comparisons of similar sold properties to enable you to reach an agreed marketing price.
  • Question 2: How will you market my home?
    You need to fully understand what marketing the agent will do in order to sell your home for the best possible price. This may include things such as advertisement on property portals, social media campaigns, boards etc.
  • Question 3: What type of agent and their levels of contact?
    Traditional agent – A traditional agent has a shop window on a main high street and offers the most knowledge on the area due to the fact that they operate locally. You tend to deal with the same person from start to finish and get a more personal service. Their marketing tends to be more localized due to the fact that they specialize in a local area but still have access to the portals.Hybrid agent – A hybrid agent operates away from the high street and markets to a much larger area with more staff from the one office building. They tend to rely more heavily on the internet portals but will still have good local knowledge. A hybrid agent tends to have different staff for different aspects of your sale, i.e. a sales progressor and valuer.Internet Agent – An internet agent doesn’t have a shop front and they may subcontract an agent to value the property. Once you have decided to use them, your preferred contact with them is via a call centre. They may know the least about the area in which you are selling because they cover such a wide area. The marketing is limited to predominately the portals with an upfront payment.
  • Question 4: What type of agency?
    There are two methods of sale normally used for residential property: Auction and Private Treaty.Auction: You will need to prepare a legal pack of information about your title and property. There will be an announcement of when the auction takes place and prospective buyers will attend the auction and bid. The advantage is that the contract to sell comes into existence at the fall of the hammer; the buyer has to have the money available to buy. There are no offers or chains, just a contract with a pre-determined completion date. A fee is agreed with the auctioneer and there is usually an additional marketing cost.Private Treaty: The traditional way most homes are sold. The property is brought to the market and, when terms have been agreed with the buyer, your solicitor will handle the transaction and answer any questions the buyer may wish to raise. This sale is negotiated and an offer accepted on a subject to contract basis. This means there are no contractual agreements between the seller and buyer until contracts have been formally exchanged by the solicitors with a pre-determined completion date. For this type of sale, Parliament has legislated for three types of agency contract. The legislation provides for a health warning defining when commission is due on each agency type. This contract will specify the length of the contracted period and will roll over at the expiration of the period until notice is given to terminate. When you sign an agent’s contract in your own home, the agent must serve you with a notice confirming your rights to a 14-day ‘cooling off’ period. You can serve notice to end the contract at any point during this time period. Although the contract will have ended, should the agent have carried out work for you, the agent is entitled to reimbursement for this work.
  • Question 5: What are their service levels?
    Good service is different for everyone. We would advise you to discuss your expectations with your agent, e.g. their methods of communication, out of office hours, contact via social media or even sending letters. Some agents even win awards for their customer service. You need to clarify what level of customer service you are seeking and does this relate to the commission.
  • Question 6: What is their commission structure? In agency there are many types of fee structure.
    Percentage Fee – The traditional no-sale-no-fee is based on a percentage of your sale price (not your marketing price) plus VAT. This has been around the longest and the benefits to this type of commission are that the agent only gets paid if they do their job, there are no upfront costs, and the agents are motivated to get you the best price as the more money you achieve the better fee they earn.Fixed Fee – To help you budget for your move, you can request a fixed fee including VAT. In choosing this type of commission, you will know exactly how much it will cost you to sell no matter what price you get. This still tends to be a no-sale-no-fee commission and has no upfront costs.Upfront Fee & Reduced Percentage – To save the seller money and to help with agents cashflow, some agents do an upfront fee and a reduced percentage upon completion. Overall this provides the seller with a lower commission; however, they have to pay a few hundred pounds upfront and if they choose to withdraw from the agent this money is lost.Upfront Fee – The last type of commission is a full upfront payment with no additional commission. This tends to be the payment model used by the internet agents. The upside is that there is no additional commission payment upon completion; however, there is no motivation for the agent to sell the property. A variation is that a total upfront payment may be deferred until completion or a specific date when this money must be paid regardless of whether the property has been sold or not.

3. Preparing the house for sale

In order to maximise your sale price and achieve as positive viewing, we need your help to prepare your home for selling.

Externally, make sure that all maintenance issues are repaired, windows and conservatory are clean, guttering unblocked, the drive is jet washed, make sure all external gates open and close and lock easily, make sure the viewer can park on your drive – discuss with your agent if there are parking issues in your area.

Internally, declutter surfaces, clean and tidy the property, make sure all blinds are open and curtains pulled to provide maximum light, ensure all lightbulbs are fitted and working, remove some cupboard contents to show excess of space, make sure any little snags such as leaky taps or creaky doors have been fixed, find all documentation for warranties, guarantees, services, purchase receipt and title deeds (if applicable), remove moldy bathroom sealant, add room fresheners, find all keys.

Carefully consider the implication of any major expense, for instance redecoration: will you recover the cost in the ultimate sale price? Very often, providing the property is clean and tidy, a buyer would prefer to do these works themselves.

These small changes will make your home more saleable. This means that the viewers are more likely to offer and therefore you will sell quicker. If you do get an offer, you have removed any negatives from the property, and therefore there is less reason for a buyer to use these excuses in order to offer a lower figure.

4. Legal Requirements

The agent will require a copy of your photographic identification and a utility bill to prove your home address due to money laundering legislation.

The property must have a current Energy Performance Certificate. Energy performance certificates were introduced in 2008 due to a European directive to assist the government in reducing the CO2 pollution from residential property. In order to sell your home, you must have a valid EPC on your property.

An EPC lasts for 10 years unless substantial alterations have been made to the property, for instance a new gas boiler. If your EPC is getting close to its expiration date, your buyer’s solicitors may request a new one. The energy rating runs from A – G and there are no current rules regarding the minimum rating that is acceptable to sell. However, certain mortgage lenders are requiring low EPC ratings to be increased before a mortgage offer will be released. Within the certificate are recommended improvements which, if undertaken, show the potential score your property can achieve.

All properties with an EPC are logged on the national EPC register. This can be accessed by anyone online as it is a public document. The EPC graph must be displayed on all marketing material for the property. The only person who can carry out an EPC is a government approved energy assessor.

If you are selling to an investor, the property must have an EPC rating of A – E; this is so that a tenant can occupy the property.

5. Mortgages

The best advice is to speak to an independent mortgage advisor. If you do decide to sell your home, you need to discuss how much you can borrow along with how much equity you have and therefore calculate your monthly repayment. If you are only selling you will need to confirm with your bank what your early redemption penalties are, if any. These penalties are put in place to compensate the lender if you pay off your mortgage earlier. These penalties can be many thousands of pounds and will affect your decision to sell. An additional benefit of going to a broker is that the advice is independent and they have access to the whole of the market; a broker also has the ability to manage the mortgage transaction, whereas going direct usually takes longer and the responsibility is on you, the client, to sort it out.

6. Offers

When you receive an offer your agent will advise you not only on the amount but also the strength of the offer, providing you information regarding where the money is coming from, how long the chain is, whether there are any leasehold properties involved or mortgage offers required. If you receive a reasonable offer your acceptance will depend upon your reasons for a sale, for example the time period you are working to and your own financial situation. These personal circumstances will influence your decision but will not be of a concern to the buyer who will of course be seeking value for their money. Offers will be confirmed by your agent in writing together with your decision. Offers are made subject to contract, which means neither party are contractually bound until exchange of contracts.

7. Survey

There are three types of survey:

  1. Mortgage Valuation – If your buyer is purchasing with the benefit of a mortgage, the lender will require a valuation to ascertain the value of the security. Some buyers purely rely on this report.
  2. Home Buyers Report – Even if there is a lenders report on your home, a buyer may well choose to have a Home Buyers Report done by a chartered surveyor. This report expresses a view on the condition of your property and highlights repairs and maintenance issues that are likely to occur in the future, or indeed need to be dealt with immediately.
  3. Full Structural and Buildings Survey – This type of survey provides a fully detailed overview of the condition of the property and is usually quite expensive.

In the unlikely event these reports highlight a particular structural issue, a chartered engineer can be called in to take a view on the best solution of the problem.

8. Choosing a Solicitor

Having found a buyer most people consider which solicitor to use. This delays the transaction and our advice is that, having decided to sell, you should instruct a solicitor as soon as possible so that a contract can be ready to be forwarded to the buyer’s solicitors. Your solicitor will require your formal instructions and you will need to complete questionnaires about the property and go through the identification process to comply with Money Laundering regulations. By preparing this paperwork as soon as possible, this will highlight any issues that need to be addressed and enable you to start gathering any additional documentation that will need to be disclosed to the buyer. As an example, the Fensa certificates for any double-glazing units that have been installed or a history of the servicing of the gas boiler. By giving the purchaser as much information on day one, this eliminates the purchaser asking questions. In most cases, the title is registered with the Land Registry and therefore you will not have to provide the original deeds. If this is not the case, the location of where the deeds are kept will need to be provided.