Your home is on the market, congratulations, that is the first big step in the home selling process.
As a former property Solicitor, and more recently a Director of my own Estate Agency business, I have realised that many property professionals take for granted the intrinsic steps involved when selling a home. However, for most people this is something that we only encounter once every 5, 10, 20 or sometimes after 40 years. A lot can and often does change during that time in terms of how a sale and conveyance will progress.
What paperwork should I expect when selling my home?
Expect a lot of paperwork from not only your Estate Agent, (those that operate a professional practice are hot on forms and everything being documented! This can help to save time and queries further along the selling process) but especially from your lawyer. (Lawyer is a generic term and can cover a number of legal professionals including a Solicitor, a Legal Executive, and a Licensed Conveyancer). Many larger firms will also employ a number of Paralegals who have a good understanding of the conveyancing procedure and have experience but not necessarily a formal qualification. They are often supervised by a qualified lawyer.
As a vendor, you will firstly need to prove to your Estate Agent that you are indeed legally entitled to market and sell the property in question. This seems nonsensical but is actually a legal requirement that Estate Agents should now follow and is a safety check for all home owners in this digital world when ID fraud is all too common.
Once your property has been marketed and your agent achieves an agreed sale for you and verifies your buyer’s ID and proof of funds (another legal requirement to satisfy Anti-Money Laundering regulations), they will issue a Memorandum of Sale to both parties’ lawyers.
As the vendor, your lawyer will then ask you to complete a number of standardised forms which are accepted by most conveyancing firms. This standardised procedure includes a property information form and a fixtures and fittings form. These are then issued to your buyer’s solicitor as part of the Contract Pack which includes a draft contract and copies of the title documents.
Your buyer will be asked to give monies on account to their solicitor to enable the conveyancing searches to be put in hand. Depending on which Local Authority the property is in, will determine how long your Local Search takes to be returned. Some areas can be as quick as a few days, other areas can take a few weeks.
Once the buyer’s solicitor is in receipt of the search results (usually the Local Search, Drainage and Water, and Environmental as standard) they will review the results and the documents in the Contract Pack received from the vendor’s solicitor and will raise any necessary Further Enquiries. The buyer’s solicitor is not only protecting the position of the purchasers, but usually also a lender.
What items should I include in the sale?
When you sell your home, your solicitor will ask you to complete a Fixtures and Fittings Form as mentioned above. Fixtures are items that are literally fixed or attached to the property being sold, such as attached kitchen units or the new bathroom you have just had tiled and plumbed in. In most circumstances, these items will have to remain, and in fact your buyer will almost certainly be making their offer to buy based on these items staying with the property.
‘Fittings’, however, are items that are fixed to the property, but by their nature they can easily be removed without any real damage to the property. Eg, bookshelves and curtains would all be good examples and even possibly a freestanding cooker. Therefore, it is the seller’s discretion if the curtains and cooker are included in the sale of a house.
It is also a good idea to consider before marketing your home which items you might want to take with you. Your agent can then be upfront with potential purchasers when they conduct viewings and also when preparing the property particulars.
This is why the Fixtures and Fittings Form must be completed with accuracy, care, and a great deal of thought, as any disagreements will need to be ironed out throughout the course of the conveyancing process and certainly before contracts are exchanged when the Form will be attached to, and form part of the Contract.
Why is my buyer having two surveys?
Most of us will require assistance from a mortgage to buy a property and in that case your lawyer will have a duty of care not only to you, the purchaser but also to the bank or building society. As you can imagine, banks have a lot of boxes to be ticked when it comes to lending money for a home purchase, and they rely on the buyer’s lawyer to protect their position. Most of the questions (legally known as Enquiries) a buyer’s lawyer therefore raises is down to the requirements of their lender and quite often the buyers are completely unaware, so don’t shoot the messenger!
As part of the loan process, the lender will require a valuation to be conducted to check that the property the buyer wants to buy is worth the money that they want to borrow. During the last two years, because of the Covid Pandemic, many valuations were conducted on a desk top basis. More often, the lender will require a RICS valuer to attend the property in person. This inspection takes around half an hour depending on the size of the property. If the valuation is approved by the Valuer this usually results in the issue of your buyer’s mortgage offer, a big step!
Your buyer may also commission their own independent survey, and this is for their own benefit and is not addressed to their lender. This can confuse some homeowners, (and even other agents!) when they advise that a survey has already been carried out. What they are referring to is the lender’s valuation and that is not a survey. The independent survey is usually carried out by a RICS Building Surveyor.
Just as you would not expect to buy a second-hand car without getting a mechanic to check for you, most purchasers will require a professional to check the property they are looking to buy. After all, this is generally the most expensive asset purchase any of us commits to.
At David Cosby, we are fortunate to have experienced Chartered Surveyors who can give second opinions on and double check any survey findings to assist you and your buyer.
A home survey is a natural step in the home buying process and if there are any legitimate survey findings these need to be addressed.
Why is the process taking so long?
The average time to conclude a conveyancing process, from the issue of the Memorandum of Sale, right up to completion is generally 12 weeks. It can, however, take much longer, maybe 20 weeks. It really is surprising in this digital day and age but that is the reality. It is quite possible to achieve a completion in 6 weeks if there is just the one property being sold and therefore only two parties involved and both clients and professionals are motivated to proceed at speed! (We achieved this on one of our properties.) It also requires some luck and reliance on third parties playing their part such as mortgage valuations and offers, conveyancing searches and surveys. Due to the lockdowns and work from home requirements over the past couple of years many larger organisations in particular have still not managed to get fully back up to speed. In conjunction with the high level of property sales last year, a lot of lawyers and lenders have also not quite got their workloads back to a manageable level and many are still working around the clock. As long as you have good communication with all of the professionals involved in your conveyance and you can see that you are being kept informed at every turn this should provide you with some comfort. At David Cosby we pride ourselves on keeping our clients and their purchasers as up to date as possible at every turn and actively manage the sales progression of your transaction.
Why does my buyer need to see the property again before exchanging?
Once the survey stage is satisfactorily concluded we will check that the lawyers have concluded all Further or Additional Enquiries. With our legal experience we can advise you on how the lawyers are expected to address any queries and actively liaise with other property professionals where required including the Land Registry, developers, and brokers.
Once the above legal due diligence is completed, both lawyers will report to their clients with the contract and transfer for signing ready to move to exchange. It is extremely common now for lawyers acting for purchasers to recommend that a further viewing / visit of the property is carried out at this stage just before exchange of contracts. This is because quite often an offer is made to buy a property a number of weeks, sometimes months before exchange of contracts is reached and it is important to check that the property is still substantially in the same condition as when the property first went under offer.
This is a funny period as the parties have agreed to a sale and purchase but until contracts are exchanged nothing is legally binding. Vendor’s please beware. Although you have not exchanged contracts, and the property still belongs to you, your buyer can picture your property from when they offered to buy it and is looking forward to it becoming their next home. You almost become a custodian of the property for the intervening period until the day of completion when your agent hands over the keys to your buyer’s new home. It is therefore extremely important that you try to keep the property in the same condition as when you brought your property to market and accepted your buyer’s offer. Most buyer’s lawyers will advise their clients to carry out a pre-exchange visit before committing to purchase and you don’t want any hiccups this far down the line.
What is the difference between exchange and completion?
Once all of the above has been covered, and a completion / moving date is agreed by all parties in the chain your lawyer will contact you for express authority to proceed to exchange contracts. This is the stage where your buyer’s deposit is paid over, and the sale and purchase is now binding on all parties. Congratulations, this is a huge step and the stage at which nearly everyone involved in the transaction can breathe a sigh of relief and grab a cold beer!
The last stage of the transaction is the actual moving date or legal completion when monies move across from one bank / lawyer to the other. This date is set in the contract and is generally a couple of weeks after exchange although occasionally completion can happen on the same day as exchange, and this is known as a simultaneous exchange and completion.
Upon receipt of completion funds, lawyers will contact the selling agents to authorise release of keys to the new owners. In terms of practicalities, you should start liaising with your removal company as soon as moving dates are mentioned. If possible, ask your removals firm if they can pencil in a moving date for you. They will be aware that until you exchange contracts you cannot say for definite which date you require. Lawyers will never entertain discussing moving dates until contracts are ready to be exchanged but it is important for all parties and agents to start this discussion at an appropriate time as difficulties arise in terms of work commitments, children, holidays and it can take a fair while for all parties in a chain to agree on a mutually convenient date.
As soon as contracts are exchanged your moving date is set in stone and you can confirm with your removal company. Start the boxing up / sorting process early on, as soon as you bring your property to market or even before. We all accumulate more than we think we have and wardrobes, cupboards and in particular lofts and garages are a haven of stored away possessions that we perhaps no longer need. To save taking these with you sort items for family / charity or as a last resort the skip. Ensure that you know which items you have agreed to leave for the buyers – this will be on the Fixtures and Fittings Form which is annexed to the Contract.
On the day of completion start early and aim to be out of your home by midday if possible. Ensure the property is left clean and tidy and free of all your personal possessions and any rubbish. In a very short chain, completion can occur in the morning but at David Cosby we usually advise parties to aim for lunchtime or early afternoon which is sufficient time for the banks to process the transfers and for occupants to load up and vacate! On a longer chain, completion for parties at the top can go on until in the afternoon and we try to ask lawyers at the bottom or beginning of the chain to start off at 9am sharp! Or to even send funds to the next lawyer up the chain the day before and to be ‘held to order’. This gets everyone off to a good start on the actual day of completion.
Once your removal firm has loaded the boxes and furniture for your onward journey, we will make sure that we are on hand to personally collect your keys and wish you the very best. Congratulations! You are now off on your next adventure and on to your own new home.
Natasha Cosby is a director of David Cosby Estate Agents and a former property solicitor with over 20 years’ professional experience.
If you should have any questions on the above, or the home selling procedure in general, please contact the team at David Cosby on 01327 361664 / 01604 979628 or at firstname.lastname@example.org