Undertaking the task of buying and selling a property simultaneously can seem a daunting mission! In an ideal situation, you would market your home for sale, find a buyer at asking price in a few days and then have a clear path to finding and offering on your dream purchase. This is, of course, the perfect scenario and can sometimes happen but often there are complications and there can be other routes to moving.
The Property Purchase Chain
When buying and selling at the same time, you are going to encounter what is termed as ‘a chain’, this will occur as you, in the middle, will require a buyer and then be purchased in turn from that particular vendor. If you do not have a first time or unencumbered buyer and/or the owner of the home you are buying is making an onward purchase, the chain can become lengthy. More people will generally create additional needs and potential complications, such as preferred moving dates.
Open dialogue, good communication, a keen estate agent, excellent mortgage advisor and quality conveyancer are all key components to keeping the process moving forward and cordial. Maybe ask all parties to set an update schedule of twice a week.
The Best Process to Sell Your Home
It should be said, there is no right or wrong way in whether you should market your own home first or look to find and offer on a property you want before securing a purchaser for yours, however, personal experiences would suggest ensuring you have a buyer before making an offer on your new home is likely to be the better course. You may not find something to buy and then feel the pressure from your waiting buyer but as we say, there is no perfect formula or correct process but for the purposes of this article we’ll look at the selling then buying route.
Negotiating a Property Purchase
The key reason for selling and then buying in that order is – negotiating power!
If you can fully test the market and properly negotiate a sale price you can achieve the maximum value. This puts you in a better position to bargain when making an onward purchase as you are ready to proceed which is far more attractive.
If you find a property first, as you are not ready to progress immediately, you are likely to have your offer pushed higher to try and have it removed from the market for a period. If so and you really want that dream home, you increase the likelihood of accepting a lower offer on your own home in order to not lose the house you are wanting to buy!
So let us briefly look at the stages and people involved throughout the process.
Online Estate Agents
The first port of call is an online search, ensure there is at least property available at an affordable price in the area of your choice. As well as those property portals, high street estate agent windows are well worth checking too. Also, enquiring with your bank or a whole of market mortgage adviser – we can help here – to assess affordability, should be conducted at this stage. How much equity do you have in your current home? Do you require additional borrowing? Is there a lower rate available to you? Will you need more deposit than you have in equity?
The next stage would be to obtain valuations on the home you are selling, generally from three estate agents. This gives you an accurate feel for the price but be wary of agents over-valuing in order to win your signature, it could cost you significant time and possibly money moving forward. Probe with questions on their marketing strategies, number of waiting buyers and fee structure. Always ensure they can provide evidence of a good number of recently sold local comparable properties and are not tying you into a long contract.
You will now need to get an energy performance certificate (EPC) as this is a mandatory requirement when marketing your property for sale. Always check the online EPC register as they last ten years and there could be a valid one available.
Getting the Right Appointments
Appointing an estate agent that you feel will deliver the best offer is next. Make sure they report back with their efforts in trying to get the right people through the door. Always be ‘viewing ready’ and ask for constructive, honest feedback. Many viewers will feel a little more at ease when looking around with the estate agent only but ask the agents thoughts on the key selling features to ensure they are highlighting the best points of your home.
Hopefully it will not be long before you are negotiating a strong offer and finding yourself sold subject to contract. However, if it does, incentivise your agent (not that they should need it) by pushing for a joint agency, be wary of extra fees and long contracts.
We have given further information in our blog ‘what to do when selling your home’ about the processes involved here.
Making the Offer
Once your buyer is in place and the agent has verified finances (more below on this when you have a bid accepted) get out there viewing and make an offer on that dream home!
We would always advise moving swiftly to get the property you want removed from the market, being gazumped (outbid) can cause heartache and/or potentially cost you more money in the form of increasing your offer.
The documents you’ll need to do this may vary but essentially will entail; ID, proof of deposit (this could be in equity though), solicitors details (this will come up very soon), mortgage brokers details and a copy of your decision in principle.
Instructing a conveyancer around this time is now essential – please try out our conveyancing calculator on the homepage of this site, we offer quality, great value conveyancing services to suit your requirements and with benefits such as online case tracking systems and no sale no fee facilities.
We have written about the conveyancing process in a little more detail in our article ‘how long does conveyancing take’ and please refer to this for some more information.
What Information does my Mortgage Advisor Need?
It is likely your mortgage advisor (we can help here too) will have your agreement in principle with a lender in place as noted above and you will then need to provide, if not instructed to do so prior to this point, all relevant documents enabling the advisor to submit the full application.
Information you will need to make available to the advisor will generally include; most recent three months bank statements, most recent three months payslips, SA302’s (self assessment) documents if self employed or limited company accounts, tax year overviews too, identification and possibly other material but not limited to; P60’s, visas, buy to let or other mortgage information, employment or maternity/paternity references, employment contracts, dwp benefit statements and credit reports. There could be other relevant bits if you are buying via a scheme such as right to buy or help to buy for example.
In the case of porting your existing mortgage you may not require a broker or need to provide any of this, if your move involves additional borrowing or remortgaging to a new lender then it’s likely you indeed will.
Surveys will be taking place shortly, instructed by your buyers and your own lender. This will invariably be a standard bank valuation which allows the lender to ascertain the value and ensure they are not lending in excess of what they should be. On occasions these can be free but generally cost between £250 – £650 and are to paid for by the person wanting the mortgage even though you may find it hard to even obtain a copy. You are absolutely within your rights to acquire your own survey, generally there are three types; a basic valuation, homebuyers report (a traffic light system report which delves into potential issues such as damp or roof problems etc) and the third is a structural survey which does what it says. We can assist with this element too so feel free to call us.
Much of the above five sections can all occur simultaneously or within very close time proximity, so try to be as prepared as possible as it will be the busiest period of your transaction.
Stamp Duty and Other Costs
Please note stamp duty and other sales costs, please always bear in mind your budget. See our guides on these charges in other articles throughout our site. When in a chain, you might be able to use the deposit of the first time or unencumbered buyer, particularly if it is higher than your required deposit, always obtain permissions through the legal channels and be prepared to add to the deposit which will likely be required.
As all progresses via property solicitors, estate agents and mortgage advisor channels it will a good time to consider insurances and even wills as these may need adjusting. Will you have sufficient life cover and buildings insurance (legal requirement) in place? Have you considered other insurances to provide peace of mind such as critical illness, income protection and contents cover?
Once all parties in the chain are happy and can agree suitable dates it will be time to exchange contracts via your property solicitors. This will legally lock everyone in and bind them to moving or potentially face quite significant financial consequences.
At this point, it will be time to put the finishing touches to organising your move in the shape of removals (again, speak to us for a quote if needed) and inform companies of your move such as; utility companies, local authority, car insurer, etc. There are many!
It’s then time to complete (on average a week after exchange), hand over and collect keys, get the family driving to their new dream home and unpack. Congratulations and enjoy!
Other routes to sell without a chain include – part exchanging, selling for cash, auction, let to buy (will incur an initial 3% stamp duty surcharge) or moving into rented for a period. We cover this options in further articles within our site.