House Moving Handbook

Practical considerations for preparing to sell and moving home

Introduction

The challenges of buying and selling property are well documented. The process can often appear daunting when taking into consideration the myriad of variables. There are numerous decisions to be made about the sales process, how best to market the property, and about setting the guide price and negotiations. There are complex considerations and choices to be made regarding legal responsibilities and obligations, and you may also need to plan your finances.

Choosing your advisors is of paramount importance, to make sure that you can proceed with confidence towards your sale, and perhaps a potential purchase, ensuring both are concluded in a timely manner and on the best possible terms.

Fisher German are trusted to provide reliable and carefully considered advice. We have many years’ experience and a huge breadth of knowledge, and we pride ourselves on providing an impeccable service. This guide seeks to offer clear, practical advice on selling a property, from agreeing the sale through to its successful conclusion, and identifying key considerations and important steps that may need to be taken. Due to the complexities and variables involved in the selling process, this guide cannot be exhaustive, and we will be very pleased to talk to you further on any aspects that may need clarification or expanding upon.

Getting ready to sell

In addition to your estate agent you will need to instruct a solicitor and perhaps consult with your bank manager, accountant or your financial advisor. Fisher German will be happy to make recommendations to ensure you have the best possible team with you.

Having selected your advisors, the next step is to compile appropriate documentation that proves your ownership of the property and demonstrates that any works that you have undertaken have been done correctly, in accordance with the law, regulations and with appropriate approvals.

Key documentation may include:

• HM Land Registry Title documents plus any Title insurance policies you may have taken out or inherited to solve Title defects

• If you have undertaken building work, you may need to have:

- Planning permission documentation for any major work carried out

- Building regulation completion certificates

- Any guarantees/warranties (you may have inherited these when you purchased the property)

- For windows, you will need FENSA or CERTAS certificates

• If your property is Listed or is in a Conservation Area you will need:

- Listed building consent for interior and exterior works

- Conservation Area consent

• A Gas check completed by a Gas Safe registered engineer

• An Electrical Installation Condition Report or a NAPIT or NICEIC report from a registered electrician

• You could also need

- Damp guarantees/warranties

- A Party Wall agreement

- A Japanese Knotweed management plan

- An asbestos survey

- Boiler or wood burning stove installation certificates

Before you can sell you are also required, by law, to prepare and offer an Energy Performance Certificate unless you live in a Listed property where it will generally not be required.

When instructing your estate agent, your solicitor and your mortgage lender, you will be required to provide documents so that your identity can be verified to comply with Anti Money Laundering regulations.

Method of sale

Choosing the best approach to deliver your sale

Private treaty is the most common method of sale. However, there are alternatives, and it is useful to be aware of them. Depending on your requirements, the nature of your property and your timeframe, it may be appropriate to sell by either informal tender or by auction.

Sale by private treaty

This is the traditional and most common form of sale for residential property in the UK. The property is placed on the ‘open market’ by an estate agent on behalf of the vendor, usually with an indication of price. This may be quoted as a ‘guide price’ or expressed in several different ways including ‘Offers in the region of’, ‘Offers based on’ or ‘Offers in excess of’. Your agent will advise you on the pricing strategy and suffice to say that the figure and the phraseology are important.

Interested parties are invited to view, carry out investigations and to make offers. Negotiations take place to agree terms acceptable to both parties. Such terms will not just be the agreed sale price but could include agreement about other items and chattels to be included, and the crucial detail about timing for exchange of contracts and the completion date. More complex properties may require agreement relating to tenancies and vacant possession, the transfer of agri-environmental schemes and entitlements, transfer of staff, holdover for harvesting and a whole host of other matters on which you will need expert guidance.

When terms are agreed, a memorandum of sale is drafted, agreed, and circulated to all parties. At this point the property is considered ‘under offer’ or ‘sold subject to contract’. The legal process follows, hopefully culminating in an exchange of contracts, at which point the seller and buyer are legally committed to the transaction with an agreed completion date for the property to be transferred and the private treaty sale process ends.

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Sale by informal tender

An informal tender sale should be considered when a property is likely to generate a lot of interest, with several parties keen to purchase it. It can be an excellent way to crystalise competitive interest and ensure that the highest sale price is secured. In this scenario, potential buyers can find the competitive bidding of a traditional private treaty sale alienating due to the lack of transparency, and so may fail to properly engage with the process. An informal tender sale clarifies the bidding process, providing a layer of transparency. It also helps to manage expectations, as it sets out how and when people should make an offer to buy, and how the offers will be assessed.

When the sale is launched, a date is set by which interested parties should make their offer to purchase. Along with their offer, prospective purchasers are asked to include a variety of information which enables confident assessment of their ability to buy the property, and also outlines any conditions attached to the offer. In this way, interested buyers put forward their best bids for consideration in a semi-formalised manner. As the seller, you are not required to accept the best, or even any, of the offers, but rather you can carefully decide which purchaser most clearly matches your sale aspirations and proceed accordingly.

An informal tender sale can be seen as an effective way to draw together and agree a sale in a set timeframe whilst preserving your ability to select your buyer.

Although there is a date by which all offers must be submitted, once the offer is accepted there will still be a conveyancing process in a similar way to a traditional private treaty sale. If you think that you would like to agree a sale and create a legally binding contract at the same time, then an auction may be the sale solution you need.

Sale by auction

Mistakenly, some people consider auctions most suitable for distressed properties, but this rationale is increasingly outdated, and a broad variety of properties are now sold this way. Residential, commercial properties and land are regularly sold via auction. An auction can be used to launch a sale or sometimes to conclude the sale of a property that has taken longer to sell than initially anticipated. It is also useful for a property sale where several buyers have expressed interest in purchasing and is a good way to conclude negotiations when needed.

Most of us are familiar with the idea of a traditional auction, and for experienced buyers they are a great way to secure a property. Auctions offer a sale in a controlled timeframe and of course a seller can agree a reserve price, set at a level at which they would be happy to sell. If the reserve is not met, the sale will not proceed, although a deal can often be finalised in the hours and days afterwards to one of the bidders whose identity and level of interest will be known.

Traditional auctions in a public room can, however, be daunting for some buyers and are inconvenient for many. Online auctions are a great alternative, particularly in an environment when so many people are familiar with online marketplaces and buying online. Online auctions are designed to be welcoming and flexible. They encourage participation, entice well-funded buyers, stimulate bidding and for the right properties this can lead to an excellent selling price.

Online auctions require more preparation prior to the launch of a sale, and a full legal pack needs to be produced by the seller’s solicitor. Online auctions are considered to be fast, safe and transparent and, just like a traditional auction, a legally binding exchange of contracts occurs when the successful bidder wins the auction.

Instructing your Solicitor

You should ideally instruct your conveyancing solicitor at the same time as you instruct Fisher German. In addition to gathering the information highlighted on page 4, there are steps that can be taken so that when your buyer is identified a sale contract can be dispatched, and the sale process can be progressed without unnecessary delay.

The first thing to ask for is a Property Information Form (TA6 form) for a freehold property or a TA7 form for a leasehold property. This is a document that you need to complete, and it will be part of the contractual paperwork that will be sent to your buyers’ solicitor and subsequently form part of the contract of sale. This is a good time to consider what you will include in the sale, and items that may be available by separate negotiation. This information is recorded on a TA10 form, known as a Fixtures and Fittings Form and as

with the TA6/7 will become part of the contract of sale.

It is also worth asking your solicitor to review your Land Registry Title to ensure there are no boundary anomalies or issues that will need to be addressed before the sale can proceed. If you are splitting your Title, perhaps to divide off a paddock or a building plot, or if your property is held in a number of Titles, carefully reviewing all documentation at this early stage is strongly advised and we can assist you with this.

Your finances

If you have a mortgage or equity release on your property, the proceeds of your sale will be required to settle the outstanding debt and you may have a penalty for early repayment. You may wish to investigate the options for transferring your mortgage to the property you are purchasing. Many mortgage products allow transfer for periods of 90 or 180 days. It may also be important to calculate your equity position post sale. If your sale is linked to a purchase, you will need to consider how you will finance your purchase either using money that you already have or by organising finance.

You will need to consider and plan for fees associated with selling. These are likely to include your estate agent fees, your legal fees and your removal costs. You may have a liability for capital gains tax to consider if you are selling a property that is not your primary residence or for a property that has a significant land holding. Your financial plan should include any costs associated with an onward purchase such as legal fees, costs of surveys, mortgage arrangement fees and stamp duty land tax (SDLT). To accurately calculate the stamp duty on acquisition please visit the stamp duty calculator on the Fisher German website. www.fishergerman.co.uk/stamp-duty-calculator

Probate sales

The sale of a property may be linked to the death of its owner and in this circumstance a Grant of probate will be required before the property can transact. A Grant of probate confirms the authority of an executor to administer the Estate of someone who has died, and this can commonly include selling a home.

The executor of an Estate should be prepared that an application for probate can take a few months to be granted depending on the complexity of the Estate and particularly if inheritance tax is to be paid. A property can be marketed but contracts cannot be exchanged whilst waiting for probate to be granted.

To calculate inheritance tax, your tax advisor will usually recommend that you obtain a professional valuation to help you calculate the value of the assets. Fisher German can assist with this process.

You should consider the ongoing maintenance of the property and review the insurance schedule to ensure the insurance is valid if the property is to be empty for an extended period.

To avoid delays, the executor should check the Title of a property with the Land Registry. If it has been in ownership for many years, it may not be registered. This may mean that the original paper Title deeds will need to be located. The Title deeds should be checked in the same way as a non-probate sale.

Physical preparations for a sale

Your agent should advise you on what, if any, physical works should be undertaken to the property to enhance the prospects of sale and increase the likely selling price. The timing for any sale will obviously have a major bearing on this but some relatively minor cosmetic improvements can materially affect the level of demand.

Some decorating is often beneficial to freshen up areas of the property and sometimes to allay fears amongst buyers who could otherwise become concerned about maintenance liabilities. General tidying and cleaning, if needed, both inside and outside the house can have very positive effects on the sale outcome. Decluttering or rearrangement of contents in some rooms might be a consideration. If appropriate we work with home staging companies to ‘dress’ a house for sale. This concept was first tried and tested on show homes for new developments where invariably sales rates improve when potential purchasers can view a property set up and presented as a “lived in” home.

Preparing for a viewing

Remember you are selling a home and not a show house. It’s important that the property looks welcoming but not too staged. To create a positive impression, it is important to anticipate how the viewer may perceive the property and take steps to ensure the correct impression is created. It may seem obvious, but it is most important the house is warm, well-lit, aired and tidy for viewings. Your agent will be able to guide you on this but good presentation for viewings is a key ingredient for sale success.

How the viewing is carried out is also very important. The property needs to be shown in the best way and it may be appropriate to point out certain features that you know your buyers are looking for. Fisher German generally conduct viewings on your behalf to ensure the best result, but prospective purchasers often like to meet vendors on a second viewing.

One of the most important points at this stage is to understand exactly what viewers think of your home. Your agent must take great care to collect and consider feedback and, if appropriate, adjust the marketing strategy in close consultation with you.

Selecting your buyer

Your agent will keep you apprised of all offers that are made on your property and discuss the merits of each. We will inform you of the potential purchasers’ buying position, whether they have a property to sell, are cash buyers, or need to raise finance. If they need to raise finance we will explore, verify, and explain their circumstances. Detailed investigation at this stage is vital to success.

If you are selling a home that you purchased with the “Help to Buy” scheme, then you will need to repay the equity loan. Further advice should be taken about how much this repayment will be.

Negotiating the

best deal

The highest offer is not always the best offer. We will be happy to talk you through the merits and potential issues associated with any offer you receive, and ensure we have the best buyer for you. At this stage we will explore a timescale that will work for you and then do all we can to ensure that the timetable is adhered to. A failed sale is costly and frustrating, so getting this stage right is very important and requires expert co-ordination.

As part of the negotiation of the sale price it is common to consider additional fixtures and fittings that may be included in the sale. Producing an accurate inventory is important.

Accepting an offer and working towards an exchange of contracts

Once your buyer has been selected and the offer negotiated to agreement, we will prepare a memorandum of sale that will detail who is selling, who is buying, who their legal representatives are and the key terms of the sale agreement. This document is used to instruct the solicitors to proceed with the legal process.

Now your sale has been agreed with your potential purchaser, your property is considered to be sold subject to contact (SSTC), or under offer or sale agreed. They all mean the same. Whilst you have an agreement to sell at a certain price, your property is not legally sold until you have exchanged agreed written contracts with the buyer. Before exchanging contracts, neither party is legally committed to the sale, however an agreement to sell or buy should not be entered into lightly as withdrawing from the agreement can create costs, delays, frustration and can affect your market profile.

The Legal Process

If you have prepared for the sale and your agent and solicitor have prepared well as a team, a contract can quickly be sent to your purchasers’ legal representative and the legal sale process can begin. This swift start can be critical for cementing your sale and maintaining momentum. At this stage, an agent’s assistance to progress your sale will be invaluable, ensuring that communications lines remain open, enquires are promptly raised and responded to appropriately, and any concerns or problems are effectively tackled.

Once your purchaser’s solicitor is in receipt of the contract, they will raise pre-contract enquiries and your solicitor will need to respond. It is important to understand why the buyer’s solicitors raise enquiries. They have the responsibility of ensuring that their clients are buying a property with no undiscovered issues; the solicitor must also satisfy the lender’s requirements with a rigorous due diligence process.

Your solicitor may consult with you or us to establish appropriate answers to enquiries raised and clarify responses. It is important that you do not try and respond to questions where you are not sure of the answer. You should be guided by your solicitor as to your obligations to answer certain questions.

You may be required to answer questions on whether the property has ever suffered from flooding, possible structural defects or drainage issues. There may be detailed enquiries about the heating or electrical systems. Solicitors will often enquire about boundaries, rights of way or covenants and restrictions, and also adherence to regulation, certification and planning consents. There may be questions about the provision of utilities and easements.

Whilst this may seem daunting, we are always on hand to help and guide you through the process. Where there are issues that cannot easily be dealt with within the proposed timescale, your solicitor may advise you on the provision of an indemnity insurance policy which may offer an appropriate cost-effective solution to certain issues.

The Survey

Running in parallel with the legal process, most property sales involve a survey. There are four main types of survey and it is useful to understand what type of survey your buyer intends to carry out.

• A mortgage valuation – a simple valuation inspection carried out by a surveyor appointed by the purchaser’s lender. Its simple aim is to establish if the property offers sufficient security for the loan.

• A condition report – often commissioned alongside a valuation, the surveyor will provide a summary of potential issues that may need further investigation.

• A homebuyer’s report – this can be provided with or without valuation advice and highlights problems that the property may face. It is a visual and nonintrusive survey that will likely recommend further investigation.

• A structural or building survey – an extensive investigative survey that will seek to highlight any problem that may be affecting the property. This is a significant investment but may prove invaluable.

Exchange of contracts

and completion of the sale

When the contract has been agreed, both buyer and seller will sign an identical contract and the legal representatives of each party will facilitate the exchange of the signed contract which can be done without the immediate physical exchange of the documents. The sale is now legally binding and neither party can withdraw without significant consequences. The buyer will usually pay a deposit of 10% of the purchase price at this stage. We will advise you where attempts may be made to vary the sum of the deposit.

A date for completion must be set before the contracts are exchanged. Completion is the point that the purchaser will hand over the remaining funds to your legal representative and legal ownership will transfer from you to your buyer.

When your solicitor is in receipt of the completion monies, they will let us know that the keys can be released. Your solicitor will pay off any outstanding debts (mortgages or charges), our fees, their fees and transfer the balance to your account, providing a full statement of all monetary matters.

Preparing to move

After you have exchanged contracts there are several matters to be tackled, including confirming your moving date with your removal company, ensuring that you have appropriate insurances in place and contacting your utilities providers and Royal Mail to have your post forwarded. You will of course also need to pack and maybe need a general clear out.

When you move to your new home you will need to transfer your Council Tax liability and change your electoral roll registration over to the local authority in your new area. You may need to contact your medical providers and the DVLA. You should ensure your bank and other financial advisors, or pension funds have your new address.

GLOSSARY

The selling process

Instruction - when a seller instructs an estate agent to market a property. A solicitor should be instructed at the same time.

Offer – an offer made by a prospective buyer to purchase a property at a specific price with associated terms. At this point the offer is not legally binding and can be accepted or rejected. Sometimes referred to as a ‘bid’. Sold subject to contract (SSTC) – an offer has been made on the property and the seller has accepted it. Contracts have not been exchanged, so it is not legally binding. The offer can be withdrawn without financial repercussions.

Under offer – the same as ‘sold subject to contract’ – an offer has been made on the property and the seller has accepted it, but contracts have not been exchanged, so it is not legally binding.

Exchange of contracts – the point at which both seller and purchaser become legally bound to complete the sale and can no longer change their minds without significant financial consequences.

Completion date – this is the point in the process where the purchaser becomes the legal owner of the new home. All remaining funds are transferred, paperwork completed, and keys handed over, usually by the estate agent involved.

Vendor – another word for seller, or transferor in legal documents.

Purchaser – another word for buyer, or transferee in legal documents.

Key documentation

TR1 - form TR1 is used by your Solicitor to transfer the whole of the property in one or more registered titles. It may also be used to transfer unregistered property which is to be registered for the first time. To transfer part of a registered title, form TP1 is used instead.

Memorandum of Sale - a document prepared by the estate agent detailing the principal terms agreed including seller, purchaser, solicitors for both, sale price, deposit, fixtures and fittings, timing for exchange of contracts and completion together with any special terms agreed between the parties relating to the transaction.

Heads of Terms - the same as a Memorandum of Sale (see above) and a phrase often referred to reference draft terms or the terms of more complex transactions.

Energy Performance Certificate (EPC)– an EPC contains information about a property’s energy use and typical energy costs and recommendations about how to reduce energy use and save money. An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years. An EPC must be provided to any potential buyer unless the property is exempt from EPC requirements (for example, because it is a Listed Building).

FENSA certification – a certification scheme for

replacement window installers. FENSA members are certified as competent persons and can self-certify that replacement windows comply with building regulations, meaning you do not need a separate assessment from a local authority building control inspector.

Lease – a document which sets out the rights and duties of landlord, leaseholder / tenant and any other party, such as a management company, who has rights and obligations under the lease.

TA6 form (or TA7 form for leasehold properties) –Property Information Form which sets out information relating to a property for sale; for example: services, boundaries, disputes etc.

TA10 form – known as the Fittings and Contents Form or the Fixtures and Fittings Form. Sets out what fixtures and fittings are included in the sale of the property, which are excluded, and which are separately available.

Title deeds – these outline the legal ownership of a property. Your agent should bring a copy of your title plan to discuss with you at the initial market appraisal. Registered title – Since 1991, all property has been registered – if you are not registered and want to discuss registering your property, discuss this with your agent and solicitor.

Draft contract - the initial version of the contract. This may be amended during the course of the sale but becomes final at the point of exchange of contracts.

Contract - the legal document detailing the agreement of terms between the seller and buyer. At exchange of contracts both parties are bound to a date on which to complete the sale.

Selling and Estate agency terms

Conveyancer – legal executive, licensed conveyancer or conveyancing solicitor who does the legal work to do with transferring the ownership of land or buildings from one person to another.

Property chain – linked property transactions, where a seller of one property is a buyer of another. Many parties can be involved, and your agent should chart the chain and monitor progress.

Fittings – items in your property that are not perhaps automatically included, for example: carpets, curtains, free-standing ovens, fridges, freezers and washing machines etc.

Fixtures – items in your property that are fixed to the floor or wall, for example: light fittings, built-in wardrobes, boiler, radiators, plug sockets.

Freehold – where you own the land and the buildings on it outright. With permanent and absolute tenure with freedom to dispose of it at will.

Leasehold – where you own the right to occupy a property for a fixed number of years, often 90 plus years and as high as 999 years.

Event fee – a fee payable under a term of, or relating to, a residential lease of a retirement property on certain events such as resale and sub-letting. An event fee is sometimes referred to as an exit or transfer fee.

Ground rent – a payment generally made annually by the leaseholder to the freeholder under the terms of a lease. The amount and any consequential changes should be understood at an early stage.

Service charge – a contribution payable by a leaseholder typically to a freeholder or managing agent, for a share of the cost of insuring, maintaining, repairing, and cleaning common areas.

HM Land Registry – the organisation which registers the ownership of land and property in England and Wales.

Listed status – listing marks a building’s special architectural and historic interest and brings it under the protection of the planning system. Depending on the category of listed building Grades II, II* and I and the scope of alterations a householder may wish to make, listed building consent will need to be secured to make certain changes. More details are available on Historic England’s website.

Sole selling rights – this type of agency contract means that the estate agent is the only one able to sell a house during the period set out in the agreement. This means that even if you find a buyer yourself, you will still have to pay commission fees to the estate agent. If you engage another estate agent during the period stipulated and find a buyer through them, you may find you are liable for dual fees where both agents require payment.

Joint agency - this is where you instruct two estate agents to market your property with a well-coordinated joint marketing campaign. The total commission fee is generally greater than a sole agency arrangement and this fee is usually split 50/50 between the two agents. Multi-agency - this differs to joint agency and is where two or more estate agents are instructed by a vendor in a more competitive working arrangement where only the agent who introduces the ultimate buyer earns a commission fee.

Local authority searches – a set of information about a property and/or land and the local area provided by the relevant authority and undertaken by the buyer’s solicitor usually as part of the conveyancing process. Commissioned by the vendor’s solicitor for an auction sale as part of the legal pack creation.

Property searches – a legal professional will conduct legal and other searches when you are buying a property to ensure there are no other factors you should be aware of. Some searches will be recommended by your legal representative for all purchases and others will be required by the mortgage lender to protect them from any liabilities that the property may have. Environmental, water and drainage searches are most common.

(Home) survey – an agreed level of service to advise clients on the condition and matters relating to a property. The homebuyer’s survey should not be confused with a mortgage valuation.

(Home) surveyor – it is advisable to employ the services of a qualified surveyor to conduct a homebuyer’s survey before purchasing a property.

Reservation agreement – pre contract agreement between the buyer and seller where each commit to a property transaction. May include a financial penalty for

pulling out of the agreement to cover costs incurred by the other party during the transaction process. Mostly utilised for new home sales.

Reservation fee – a payment made to demonstrate an intention to secure a property, often to a developer.

Snagging – documented defects or unfinished pieces of work in a new build home.

Probate – the process through which someone is given permission to deal with the estate (assets, belongings and debts) of someone who has died.

Ombudsman – an official organisation appointed to investigate individuals’ complaints against a company or organisation.

Redress scheme – all estate agents are legally required to be members of a redress scheme. Schemes may be able to resolve disputes between estate agents and consumers once internal complaint processes have been exhausted. More information is available on the Government’s website.

Mortgage & Financial terms

Mortgage valuation – an assessment made on behalf of your mortgage provider to determine whether they are willing to lend you money against a property. This is not the same thing as a survey.

Decision in principle – a written statement from a mortgage lender to say that ‘in principle’ they would lend a certain amount to a particular prospective borrower with conditions attached.

Redemption figure – the amount it will cost to pay back your mortgage early, which potentially consists of the remaining unpaid mortgage, any early payback charges, and a certain amount of interest.

Negative equity – when your home is worth less than the amount you owe a financial provider or other organisation for your mortgage.

Equity – the difference between the property’s value and the outstanding debts you owe on it.

Deposit – a payment passed on to your legal representative upon exchange of contracts, which represents a percentage of the purchase price.

Indemnity insurance – insurance that can be used during conveyancing transactions to cover a legal defect with the property that can’t be quickly resolved, or at all. Stamp duty/Land Transaction Tax – a tax paid upon purchase of property. The rules and rates relating to stamp duty change from time to time and should be considered carefully when embarking on a purchase.

fishergerman.co.uk features a useful Stamp Duty calculator to quickly help you to estimate liabilities.

To support you in navigating the mortgage market, we work in partnership with our preferred property finance provider, Cherry Street Finance. Cherry Street Finance have experience offering comprehensive mortgage advice and a range of specialist lending options, determining the best finance options available to you.

Find out more by visiting their website: www.cherrystreetfinance.com

Fisher German has 26 offices and our contact details can be found at:

fishergerman.co.uk