9 Step Guide to Buying & Selling Your Home
2nd April 2019
For most people, buying or selling your home is the largest single financial transaction that you deal with during your lives. Here is our 9 Step Guide to help manage the stresses of buying & selling your home
1. Choosing an Estate Agent
The first step is to decide whether you are going to be using an Estate Agent and what type of agent is a good fit for yourselves. You can read more about this in our blog Online DIY Agent vs Local Agent and 16 Questions to Ask Your Estate Agent.
2. Appointing a Solicitor
Once you have sold your property, or have had an offer accepted, you will then need to instruct a solicitor who specialises in property conveyancing; your agent will often recommend a solicitor. It is our advice to check reviews, the location of the solicitor and how they operate before deciding who to use. The same theory applies to choosing a solicitor as choosing an estate agent, the cheaper option may seem more appealing but may see you doing more of the legwork yourselves – so do your research.
Conveyancing covers the legal and administrative processes by which the ownership of a home is transferred safely from one person to another. It is important for all parties concerned to have some understanding of the conveyancing process.
3. Get Your Documents in Order
You will need to provide proof of I.D and address to both your agent and solicitor. You will most likely be asked for at least 3 forms of ID, such as a driving licence or passport as well as a recent utility bill and bank statement.
If you are selling your property, you must, commission an Energy Performance Certificate (EPC) before you put your property on the market. This is required within seven days of your property being advertised on Rightmove and must be produced for the Buyer before exchange of contracts.
Make sure you have also gathered the following documents and keep together in a ‘Moving Home’ folder;
- Property Title Deeds
- Building works – any planning permission and building regulations e.g. extensions, loft staircase etc
- Replacement window and doors certificates
- Electrical work safety certificates
- Gas work and boiler servicing
- Guarantees and warranties relating to the property
- Utility suppliers
- Planning applications
- Leasehold Information
- Anything else relevant to the property and its sale
4. Understanding Important Dates
There are two important dates in the conveyancing transaction. The first is what is known as the exchange of contracts and the second is completion.
Briefly, the exchange of contracts is the moment during the transaction when the sellers and the buyers become legally committed to the purchase and sale. Until that time either party can withdraw.
Once the contracts have been exchanged neither party can legally withdraw from the deal without severe financial penalties. There are a number of matters which have to be dealt with before the exchange of contracts and these will be explained a little later. Completion is the date on which the buyers are entitled to have possession of the property, and the date on which the sellers are entitled to receive the money and must vacate the property.
There are a number of important things which happen on completion and again these will be explained a little later.
5. What Happens Up to Exchange of Contracts
Once the parties have agreed a price through the estate agent, the matter is entirely subject to contract which means that neither party can legally insist on the transaction proceeding as the contracts have not, at this stage, been exchanged.
The sellers’ solicitor will prepare a contract for the sale of the property and will send the buyers’ solicitors a comprehensive bundle of information about the property, comprising proof of ownership, a list of contents to be included in the sale and a host of other points relating to boundaries, neighbours, planning, rights of way etc. In the meantime, the buyers will be arranging their survey. You can read more about the different types of survey options by visiting Which? House Surveys.
It is important that you return the papers to your solicitor in a timely fashion.
If the buyers are having a mortgage, the lender will insist on a valuation being carried out for their own purposes. A valuation doesn’t determine whether the property is satisfactory, if the valuer misses important items or defects, it is most unlikely that the buyers will be able to take any action against the valuer at a later date. The valuation is purely for the lender’s satisfaction.
It is therefore essential that as a buyer you consider arranging a more detailed survey of the property, either a Home Buyers’ Survey or in some cases a Building Survey. When the buyers apply for a mortgage they will usually be able to ask the Lender’s surveyor to carry out a Home Buyers’ Survey at the same time as the valuation, although this can be arranged independently if the buyers so wish.
While the buyers are applying for their mortgage and having a survey done, the buyers’ solicitors will be checking the information provided by the sellers’ solicitors and will also be carrying out searches on the property, usually Local, Water, Drainage, Mining, and Environmental Searches. The buyers will need to make a payment to the solicitors in order for searches to be commenced.
As a buyer you must ensure you inspect the property, at this point. If you have any questions about the property, for example about whether the plumbing, heating and electrics all work. It is too late after exchange of contracts. As a buyer your solicitor will not be involved in physical inspection of a property, they are only concerned with the legal transfer of the property.
6. Signing the Contract
Once the buyers’ solicitors have received all the paperwork from the sellers’ solicitors, together with the result of the searches and a copy of the buyers’ mortgage offer, they will arrange to go through all the documentation with the buyers or send the buyers a written report to advise them fully about the property and to discuss a number of other issues.
The seller’s solicitors will prepare the contract and will arrange for the sellers to sign one copy of the contract. Once the buyer’s solicitors have dealt with all the points the buyers will be asked to sign the contract to buy the property. It is important to note that signing the contract is not the same as exchange of contracts. Both parties will sign their own copy of the contract some time before the exchange of contracts. It is only on exchange of contracts that the deal becomes legally binding. Please don’t be concerned if you hear your buyer or seller saying that they have signed the contract and you haven’t signed yours.
Some of the things to bear in mind are:
- Choosing your buildings insurance, you will need to make sure the property is insured from exchange of contracts.
- Monies – It is important to ensure that the money for the deposit and/or the purchase of the property is not locked away in a Bank or Building Society requiring several weeks or months notice to extract it. Payment of the deposit and balance of purchase money can be made by electronic transfer. This is normally paid by way of a BACS payment which may still take three or four days to reach your solicitors account or by a CHAPS payment which is usually a same day transfer (your bank may charge for this). It is also important if you are a first-time buyer using a Help to Buy ISA that all relevant information has been given to your solicitor and you have arranged the closure of the ISA in time for your government bonus to be applied for.
7. Understanding Timings
One of the more regular questions that is asked about any property transaction is “how long will it take?” It is impossible to give a fixed timescale. If there is one Buyer and one Seller, i.e. no chain of transactions, then, subject to the wishes of the parties, the legal process would normally be completed within six to eight weeks of an offer being accepted.
It is, however, important to be aware that when involved in a chain of transactions with several people moving at the same time and dependent upon each other, the whole chain can only proceed at the speed of the slowest person in the chain. For example, if someone is waiting for the result of a search or awaiting a survey or specialist report on the property, everyone in the chain will be held up until these issues are resolved. Your solicitor should do their best to resolve any outstanding issues as quickly as they can, but please bear in mind that some matters can only be resolved by the parties involved.
“If there is one issue in the whole conveyancing process which, day in day out, week in week out, causes more frustration, irritation, anger, annoyance and worry, it is the question of completion dates. We understand that our clients have deadlines to meet due to job changes, holidays, changes of schools for children etc. It will be abundantly clear from these notes, and from all the paperwork that you complete for your sale or read on your purchase, that there are a hundred and one issues that have to be considered, and must be dealt with properly by everybody involved, before a transaction can proceed to an exchange of contracts.
Our firm and clear advice, having helped thousands of people to move house, is that you should not set a date for your move until everyone in the chain of transactions, with which you are involved, is in a position to exchange contracts. As a minimum, and for practical purposes, that means that the solicitors must be in possession of the signed contracts, the buyers must have dealt with the survey, received a written mortgage offer, arranged their buildings insurance and paid a deposit in cleared funds to their solicitor.
We make no excuse for spelling this all out in detail in the hope that it will save some of our clients from some of the excessive stress which can be involved in the whole process. Please do not try and discuss dates directly with your buyer or seller as exciting as it may be!” Solicitor
8. The Exchange of Contracts
Once the buyers’ and the sellers’ solicitors are satisfied that everything is in order, they will then arrange an exchange of contracts, at which stage the date for moving (the completion date) is inserted in the contract so that both parties are then legally committed to that date. It is also wise to bear in mind that a gap of at least seven days and preferably longer should be left between exchange of contracts and completion, since neither party is guaranteed a completion date until the formal exchange of contracts has taken place.
Following the exchange of contracts all parties involved are aware that the sale and purchase of the property is to be completed on a particular day. The solicitors on both sides will be busy dealing with various administrative tasks, including obtaining the money from the lender if there is a mortgage. By the completion date, the buyer’s solicitors will have received sufficient money from the buyers and their lenders to enable them to pay for the property.
9. Completion – The Big Day!
On the completion date the buyer’s solicitors will transfer to the seller’s solicitor’s sufficient money to buy the property.
All the financial transactions are conducted through the solicitor’s client accounts where money belonging to clients and the Building Society/Bank is kept entirely separate from money belonging to the solicitors.
In return for the money, the buyer’s solicitors will receive the legal transfer document, together with all the other relevant documents for the property. In return for the money, the seller’s solicitors authorise the seller or their estate agents to hand over the keys to the buyers.
It is important for the sellers to be aware that they should not authorise the release of a key until they know that we have received the money for the property. On the completion date the seller’s solicitors will pay off any mortgages on the property and provide proof of payment to the buyer’s solicitors.
Important: Another key thing to remember is to do your meter readings – gas, electric, water and any solar panels. You will also need to inform the Council that you have moved for Council Tax purposes. We always recommend re-directing your post, there will always be someone or an organisation that you have forgotten to inform!
As far as the seller and the buyers are concerned, once the completion has taken place, they will have reached their goal.
The sellers will have their money and the buyers will have the house and probably a mortgage to pay. The buyer’s solicitors however have a number of tasks to perform after completion including the payment of any stamp duty, the registration of the property at the Land Registry and notification to the owner, if the property is leasehold. This is a general guide to a basic form of transaction, which we hope you have found to be helpful.
Although the administrative and legal procedures in each transaction are similar, every single piece of property is different, and it goes without saying that all sellers or buyers have their own particular expectations and requirements. The information above is by no means exhaustive and there are a host of other points which crop up in any one transaction from time to time. If you are in doubt about any particular item, it is essential that you ask us before taking action.