After making the decision to put your home on the market, it is not uncommon to become overwhelmed with countless questions and doubts. Rest assured, it doesn’t need to be complex and the more informed you are about the process, the less daunting it will seem. Our step-by step guide to selling a property will ensure that you’re familiar with each stage of the process and well-prepared to sell your property.
1st Stage: Buy First or Sell First?
If you also plan to purchase property, this question has quite possibly been a cause for concern. Is it better to buy your new property first and know that you and your family will have a place to live or sell your existing home first and know how much you have to spend? As every situation is different, the best way to determine which option is right for you is by looking at the pros and cons of each. That way, you’ll be able to make an informed decision and minimise any financial risk.
Buying Property First
This option will allow you as much time as you need to find that perfect home, as opposed to feeling pressured due to financial commitments. You will also eliminate the burden of having to consider temporary accommodation and storage in between transactions. This means moving straight into your new home without having to go through the relocation process twice.
Of course, this option isn’t always viable as it would require enough finance to pay a deposit without having received the proceeds from the sale of your existing home. This could also mean having to pay two mortgages and higher taxes. You may be able to obtain ‘bridging finance’, which is a short-term loan and is designed to cover the cost of your new home however, it is often much more expensive than a standard home loan. The longer it takes to sell your existing property; the more interest you will be paying on both.
You may want to discuss the possibility of a conditional offer with the vendor. This would mean that the sale will only proceed if your existing property is sold. Unfortunately, vendors are unlikely to negotiate on price in these circumstances and may only hold the property provided that you make a higher offer.
Selling Property First
This would allow you more time to sell your home and potentially receive a better offer, given the rising market. That way, you wouldn’t feel pressured to sell quickly due to time constraints, which could result in accepting an offer lower than expected. Once your property has sold, it may even be possible to negotiate a delayed settlement with the purchaser, allowing you additional time find a property.
Timing will often prevent you from moving straight into your new home and temporary accommodation will be required in the interim. Whilst this is likely to be inconvenient and costly, accommodation and storage expenses would be considerably less compared to the additional costs associated with having two mortgages.
2nd Stage: Pre-Contract
Owner Builder Renovations
If you have renovated your property within six and a half years preceding the sale, you will need to obtain an inspection report, which will alert the buyer to any defects.
Vendor Statement
Also known as a section 32 statement, this document will provide the buyer with all relevant information regarding the property’s title and is to be attached to the contract of sale. A Vendor’s Statement should be prepared by your solicitor, signed by you and given to the buyer prior to the contract being signed. Importantly, you are only required to provide basic details within the section 32 statement. It is the responsibility of the purchaser to further investigate any restrictions that may exist.
Certificate of Title
A land title is an official record held at Land Registration Services that proves ownership and determines whether the vendor has a right to sell the property. Its purpose is to provide the purchaser with accurate and complete information about the property’s current ownership and interests.
Transfer of Land
This document will be prepared by the purchaser’s solicitor. The Transfer of Land is the instrument which registers the purchaser on the title. Its purpose is to notify the relevant authorities of a change in land ownership.
3rd Stage: Contract of sale
The contract of sale is the most important document in the process as it outlines the terms and conditions as agreed on by the purchaser and you. It is to be in writing and signed by the parties involved with the purchaser signing first.
The contract is normally prepared by your agent or solicitor. However, the purchaser will often complete details such as the sale price and settlement date upon signing the document.
The purchaser may request for the contract to contain special conditions such as ‘subject to finance’ or ‘subject to a building inspection’. This means that the sale will only proceed provided that the conditions are met. For example, if the buyer’s finance has not been unconditionally approved, a ‘subject to finance’ condition will allow them to end the contract without penalty if their loan application is refused.
An unconditional contract simply means that the sale is not dependent on any terms and must proceed. If the purchaser decides to withdraw once the contract has become unconditional, you could recover any losses you sustain. This often means retaining some or all of the deposit. Where the losses are less than the quantum of the deposit, you would need to return the residual to the purchaser. If your losses exceed the deposit you have the option of commencing legal proceedings to recover the shortfall.
4th Stage: Listing Your Property
Having a wealth of knowledge about the property market is your best weapon when selling your home. It is worth doing some research to determine which type of sale would best suit your location.
Private Sale (also known as a private treaty)
This means inviting potential buyers to make an offer by way of advertisement. A private sale is a less expensive option that can often achieve a faster result. Interested parties can immediately put in their offer instead of waiting for the auction date. Generally, this method of sale will also only attract those who are genuine buyers, many of which can be put off by the urgency of an auction.
Auction
An auction will allow you more control as you will have the ability to set the reserve price and settlement date. Auction advertisements will also allow potential buyers to make an offer prior to auction day. Typically, when a property is sold at an auction, the buyer will not be able to negotiate the terms of the contract and will be asked to sign it immediately. There is also no cooling-off period when a property is sold at auction. This means that the purchaser cannot withdraw and the sale must proceed. In some circumstances, the purchaser will negotiate a special condition such as ‘subject to finance’ or ‘subject to building inspection’.
5th Stage: Pre-Settlement
Prior to settlement, there are a few matters your solicitor will need to attend to before the property can transferred out of your name.
Deposit
It is not uncommon for the seller to request early access to the deposit. This is often to payout the current mortgage or for the purchase of another property. You will need to notify us if you require early access to the deposit. Unless the purchaser agrees, you won’t receive the deposit for at least 28 days after issuing a Section 27 Statement.
Mortgage
If you have a mortgage attached to the property, we will arrange with your bank to have it discharged.
Adjustments
This refers to any rates, taxes, current leases or outgoings. Your solicitor will prepare a statement of adjustment to ensure you only pay the portion up to the date of settlement and the purchaser will only be liable for the portion from this date. Adjustments are then deducted or added to the amount due at settlement.
Final Inspection
The purchaser has a right to carry out a final inspection of the property within the seven days preceding settlement. This is to confirm that the property is in the same condition. It is important to ensure that all inclusions remain at the property, as this is where disputes can arise.
Settlement
The date of settlement is stated in the contract. It is generally only attended by the financial and legal representatives of both parties. Your solicitor will inform as soon as they receive confirmation that settlement has been finalised.
6th Stage: Completion
Funds
Following settlement, we will pay the balance of funds by way of cheque or directly into your nominated bank account.
Change of Ownership
We will advise the relevant authorities such as water, council and Owners Corporation of the change in ownership.