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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 falls through.

    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 council tax.

    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.

    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 cost money.

    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 Vendors.

    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
  • Holding Deposit
  • 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 problems.

    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
    (Conveyancing)

    doran kennedy offer in house conveyancing to all
    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
    Chelmsford
    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: -

    Local Searches
    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 course.

    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
    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.
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