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Everyone knows that selling a property can be an intimidating experience as to most people their home is the most precious thing they will ever possess yet its market value can vary dramatically from month to month. At one point you will not attract any buyers for a long time leading you to think that you might not be able to sell your property and then all of a sudden the market can become so busy that buyers will make rapid offers which might lead them to withdraw from the deal. How can one be convinced that they are getting the right price for it and at the right time?
Where to start?
The first thing one must do is to instruct some professionals to help you with the process. If you want to market your own property, pay for your own advertising and promotional material then be prepared to have a lot of time on your hands. If you are running a busy schedule on the other hand then it is best to choose an estate agent to value and market your property on your behalf. The next step is to appoint a solicitor to deal with the legal side of the sale. If you are planning to sell and buy at the same time you may also wish to consult with a Financial Advisor about mortgage options that might be open to you. Many people will hold on appointing a solicitor until they have received a firm offer from a potential buyer. Bear in mind that there are certain things solicitors can do to speed things along so if you want to be ahead of the game, you know what to do. Do I really need an Estate Agent?
As mentioned above, if you are planning to do it all yourself you must ensure that you have the expertise, time, patience and resources to do it yourself. An estate agent will not charge you anything unless they sell your property. You will only be paying for results and a good estate agent will be attracting more potential buyers than you would be able to. There is also the convenience of having someone else to field calls and deal with other annoying matters such as recognizing time wasters and to act as a go-between in tricky negotiations. An experienced estate agent can offer his advice and expertise, too, if you are facing a dilemma where you have received multiple offers. The agent will have seen this before and will know exactly how to handle the situation. Always remember that the agency fees will only be paid once the sale has been successful, and upfront payments are required. The estate agent you will appoint will be working for you (the Vendor) and not the Buyer. A realistic valuation? The first thing the Estate Agent will do is to visit your property to have a look around, and carry out a competitive Market Analysis. This will not cost you anything and is based on the following criteria:
The property valuation will give you an ‘estimated market value’. From this you can get an idea as to what price to market your property. You will not be charged for a valuation by the agents. The estate agent will be asking you a lot of questions but don’t be put off by this, as this just shows that they are professional. They will ask you for your desired moving date, your reason for selling and so on. Some people hesitate to tell the agent how quickly they want to sell as they worry this might affect the true value of the property, but a good agent will tell you the minimum and maximum value of it despite what you tell them. Be wary of any Agent who just asks you the price you want for your property and agrees. The Agent should be able to demonstrate why they think your property could achieve their stated valuation price. They may be able to quote selling prices they have achieved for similar property in the area, or have a Buyer on the books who wants a property much like yours. Ensure this is genuine as a few agents may use this tactic! Several valuations, which Estate Agent do I choose? Make sure to do some research on the estate agents you intend to invite round for the valuation. When you telephone them, do they answer swiftly and politely? When you visit their offices, are you made to feel welcome? Little things like this can have a big effect on potential Buyers. Sometimes people immediately aim for the Agent who values their property much higher than any others. But it’s a good idea not to be swayed by valuation alone. If a valuation is exaggerated, you could waste weeks of time while your property languishes on the market, unsold. It’s not unknown for an Agent to call you in a few weeks to suggest the property be marketed at a lower value. Remember, too, that you are employing a whole firm, and not just the person who came and valued your property. Your gut instinct aside, here are some marks of professionalism that you may want to look out for.
‘Sole Agency’ or ‘Multi-Agency’? You may think instructing three Agencies would give you three times as much chance of finding a Buyer for your property. In practice this could go either way as the same buyers will go to all the agents or one of the agents can have more buyers on there books. A sole agency is cheaper but It will not cost you anything to instruct as many agents as you wish until one finds you a potential buyer. Choosing multi agency means dealing with a lot of agents this can be time consuming and more expensive than a sole agency. You must also remember if you decide to go for a sole agency then you have to make a choice to choose one agent, but this can delay the process as the more agents you have there is a higher chance of a quicker sale at no extra cost, so may the best agent win. Estate Agents fees An Estate Agent’s fee tends to range from 1-3% of the total sale price, and is paid on completion. “Sole Agency” deals (where you only instruct one Estate Agent) tend to be significantly cheaper than “Multi-Agency” deals. When there is a shortage of property on the market, you will find Agents offering to match or beat a competitor’s fee, and cut-price offers appear in the property newspapers. You may be able to negotiate a favorable deal. In steadier times, most agents charge around 2%, but the service they offer is likely to vary considerably. Choosing a Solicitor & their charges?
If you don’t already have your own Solicitor, ask the estate agent to recommend one as they will have established a good working relationship with conveyance solicitors as they are likely to be in regular contact on a number of sales, so they won’t waste time chasing one another. Fees start at about £500 for a basic conveyance service but – as with Estate Agents – it may not be a good idea simply to go for the cheapest deal. Solicitor’s costs can mount up, so make sure their charging structure is clear at the beginning. When you come close to “exchanging contracts” on a property (the legally binding part of the sale process), speed is often of the essence, particularly if you are also in the process of buying another property. The last thing you want is to be held up by an inefficient Solicitor. Title deeds held with building societies or banks can take a little time to come through, but choosing a good Solicitor will mean that delays are minimized. They will start the ball rolling as soon as they are instructed, so that a draft Contract of Sale can be drawn up and sent to the Buyer almost as soon as their offer is received. They will also ask you to complete a “Vendor’s Questionnaire”, to provide information for your Buyer’s Solicitor, which should reduce the number of queries and replies that have to be faxed back and forth between the two sides. Ask your local library for a list of Solicitors who offer conveyancing in your area. What can I do to increase the value of my Property?
Generally Estate Agents will advise against major home improvements. This is because you rarely recoup the cost of your investment, and the Buyer may change it anyway. However, there are a number of simple techniques that can help enhance interest in your property:
Preparing my Property for viewings?
First impressions always count, and the following tips should help viewers to appreciate your property at its best. Although you may be at work when viewers are brought round, so try to do whatever you can:
Best way to conduct viewings?
You are advised to do the following:
When I get an offer, should I take my property off the market?
Your Estate Agent will probably advise you against this, just in case the Sale falls through. Even if everything seems to be in order, it’s possible that after the survey, the Buyer may want to negotiate on price and you cannot reach a deal. On the other hand, if you leave your property on the market, your Buyer may naturally feel somewhat angry, since they may fear they could be pushed out by a higher offer. If the Estate Agent does get other offers, under Estate Agency law they are obliged to put them to you. Whether or not you wish to pursue any additional offers is your decision. To do so risks discouraging your Buyer, who may pull out of the Sale and start looking at other property as a result. If the latter is not convinced by your assurances that you will not accept other offers so long as the Sale is proceeding smoothly, you could also consider making a verbal or written undertaking to take your property off the market for an agreed period of, say, 7-28 days, whilst surveys and mortgage finance are arranged by the purchaser. ‘Exchange of Contracts’?
In general, the sale process goes something like this: Your Solicitor prepares the contract of sale. For this, you will need to have certain documents to hand. Please note that obtaining these often causes delays, so it is in the interests of the Vendor to chase them as soon as the property goes on the market. If your property is freehold, you will require:
Remember that it can take a while for Building Societies and Banks to send some of these documents through, so until your Solicitor has everything in their possession, progress is impossible. Next, the draft Contract of Sale and a copy of the title deeds (if the property is leasehold it will include a copy of the lease) will be forwarded to the Buyer’s Solicitor. The Buyer’s Solicitor will check the small-print of the contract, title deeds, service charges, and so on. This checking process may involve many specific queries. A good Vendor’s Solicitor will deal with many of these in advance, by asking you to complete a ‘Vendor’s Questionnaire’, which may cover:
Planning: Lists of fixtures and fittings. Exchange of Contracts: After settling any queries, the Buyer’s Solicitor will also need to obtain a satisfactory local search, and a copy of a mortgage offer. Once satisfied, the contract will be signed and a cheque for the deposit sent by the Buyer to the Vendor’s Solicitors. Exchange of contracts can then take place. Exchange means that the transaction is legally binding. At this point in the procedure, it is important that the Buyer arranges building insurance cover for the property, as technically the property comes under the Buyer’s ownership. Completion: The final stage of the Sale is normally set 2-4 weeks from the date of Exchange. On Completion, the Buyer’s Solicitor hands over the remainder of the purchase money to your Solicitor. From this, your Solicitor will pay off the Building Society or Bank (if there has been a mortgage on the property), as well as deducting their legal fees, and whatever fee you have agreed with your Estate Agent. And there you go. It’s (sometimes!) as easy as that. How long will it take to sell my property?
You should allow an Agent 6-8 weeks to get a secure offer. After this, it usually takes about 4-8 weeks for an Exchange of Contracts, and a further 2-4 weeks for Completion. Be aware that time-scales do vary with market conditions. Tip’s to speed up the sale of my property?
You can’t always guarantee that other parties in the sale won’t delay you. On your part, however, you can speed things up by doing as much of the work in advance of the Sale as possible.
I have offers from several buyers?
If you’ve already accepted one offer but wish to accept another higher one, you should discuss this carefully with your Estate Agent. It may not be worth gambling for the extra money at the expense of time and uncertainty. What happens if the second Buyer suddenly pulls out, or lowers their offer before Exchange of Contracts? On the other hand, if several people are interested in buying your property, your Estate Agent may suggest you try one of the following techniques to be fair to all potential Buyers and still achieve a good price: Open bids (“Dutch auction”): The Agent negotiates with each Buyer until they drop out, one by one, and the highest offer is left on the table. This method can achieve a high final offer from the Buyers most in a position to proceed. But negotiations can get fraught and you could lose serious Buyers if they get fed up and pull out. Sealed bids: Buyers are invited to submit their final offers in writing, and the sealed bids are opened at a pre-agreed date and time. The highest offer wins. This method is seen to be fair to all Buyers. As people are casting their offers blind and have only one chance, they are encouraged to put down the maximum they can afford. However this system does not necessarily take into account which Buyer is in the best position to proceed. Contract race: The Buyers are advised that the Vendor will sell to the Buyer who can exchange contracts first. This avoids the Vendor having to choose between Buyers. There is no risk of choosing a Buyer who does not proceed, and of turning down others that might have done. However, there is nothing to stop Buyers withdrawing, since the losing party is left with Solicitor’s and Surveyor’s expenses to pay. The Buyer reduces their offer at the last minute?
As the time to Exchange Contracts approaches, your Buyer may think you can be pushed into accepting a reduced offer (rather than lose the sale, and having to go all the way back to Stage One). It’s important not to panic, get furious and call the Buyer yourself. Instead, agree on a course of action with your Solicitor and/or Estate Agent to show the Buyer that you’ll not bow to such tactics. In the first instance, for example, your Solicitor may wish to contact the Buyer to reassert your position, demanding whether they are serious about proceeding with the purchase, and asking for any serious reason to be put in writing. It may be that, when the Buyer’s bluff is called, they will soon back down. The success of this tactic does depend on whether either party can afford to delay the Sale. If the Buyer sticks to their guns, you will have to weigh up whether it is worth finding another Buyer. Carefully discuss the options with your Solicitor and Estate Agent. You may be able to reach a compromise with the Buyer. Sometimes a Buyer may reduce their offer after the survey, or after their mortgage valuation survey. You will have to negotiate through this, again taking the advice of your Solicitor and Estate Agent. It is unfortunately quite common for the Buyer’s mortgage company to make a mistake on the side of caution, and value the property at up to 15% below the Estate Agent’s valuation. Sometimes buyers may proceed despite this by making up the difference from their own funds. If this is not possible others in the selling chain may be prepared to make up the difference – your Estate Agent and/or Solicitor will advise if appropriate, and carry out negotiations. I can’t sell, but have a property I want to move to?
It’s unlikely that going ahead with buying the other property will be a viable option, unless you have sufficient spare capital to do so. But you do have the option of letting your property (on a short let for, say, 3 months) whilst marketing it for sale. Rents for short lets can be high – so you could cover your mortgage and have a bit left over to help with other expenses. Short lets do not attract capital gains tax – another plus point. If my Property doesn’t sell do I still to pay the Estate Agent?
You won’t have to pay the Estate Agent any fee. However you may have to pay your Solicitor’s legal costs incurred to date, although some Solicitors may operate a ‘no sale, no legal fees’ scheme and it is worthwhile speaking to your Estate Agent about this before instructing a Solicitor.
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