Guide to the property sales process12th September 2019
“All estate agents are the same aren’t they?” This is something we hear quite regularly, and we understand why there can be this perception, but not all estate agents are the same.
Estate Agents have not historically enjoyed the best of reputations, and we will perhaps look at why in a future post, however the way in which they approach, handle and manage the post-offer stage is one key area where companies can differ dramatically.
At the point where an offer is made by a potential purchaser, and accepted by the seller, some customers (and many estate agents) may think that is where the agent’s job ends. In fact this is when a critical element of a good estate agent’s job begins. Having a well-informed person acting on your behalf who possesses an understanding of conveyancing and surveying practices, local environmental and architectural factors, and a knowledge of the property in question, can significantly increase the chances of the sale proceeding through to a successful conclusion. It’s often a matter of problem solving – if you know the solution, or who to ask for the solution, it’s no longer a problem; if not then you might well get stuck, with the sale potentially jeopardised as a result.
In line with how seriously we take this process on behalf of our customers, we thought it might be helpful for us to summarise the key stages which will usually need to happen in order for the average property sale to move through to completion successfully. You will notice we often mention the importance of acting in good time, this is due to our experience that unnecessary delays are a very common catalyst for buyer or seller frustrations and should be avoided assuming you are looking for as smooth a process as possible. We also note this guide is rather lengthy compared to others on the internet but we felt that most of those are inadequate in conveying accurate and helpful information as it’s not really possible to do this in a short graphic. For ease of reference though, where necessary we have marked when action is required by buyer, seller or both.
Step One - Buyer and Seller Action - Instruct a Conveyancer
The first step for both buyer and seller (if the seller has not done so previously) is to source and instruct a conveyancer to act on their behalf. Our advice would be to ask the selling agent who they would recommend locally, and whether you accept their recommendation or not we would advise you use a local company with public offices, not a web based firm with offices in another county somewhere – local knowledge can be crucial in overcoming otherwise very challenging obstacles along the way, and it doesn’t hurt being able to drop documents in to a local premises in person should it become urgent to do so. We advise you request a breakdown of associated costs, and buyers should be aware of whether or not there will be a requirement to pay stamp duty land tax. In most cases you should aim to instruct your chosen conveyancer within the first week of an offer being accepted.
Step Two - Buyer and Seller Action - Form Filling
Conveyancers will send out various documents to both buyers and sellers which should be completed and returned as soon as possible. In all likelihood very little will happen until you have done this. The seller’s information and fixtures and fittings forms are especially important as a draft contract will not be issued to the buyer’s conveyancer until these have been submitted. Sellers will usually be required to pay their conveyancer for the official copy entries and land registry plan at this point.
Step Three - Buyer Action - Disbursements
At the stage of, or shortly after, the buyer returning their forms to the conveyancer they will be asked to send payment for what are described as ‘disbursements’. These will include (but are not limited to) the local authority and water ‘searches’, and can include others such as environmental and chancel repair liability searches. You can of course take further advice on these disbursements, however payment should be made in good time so that the searches can be applied for and unnecessary delays avoided. At this point it is likely buyers will also be asked to provide proof of funds to purchase; conveyancers are obligated under strict Anti-Money Laundering legislation to verify the funds are available and how they have been accumulated.
Step Four - Buyer Action - Mortgage Application
If a buyer requires mortgage funds in order to purchase the property an application should be made as soon as possible. Mortgages can be obtained from lending organisations direct or brokers/consultants will be able to source and compare different products on your behalf. Be aware that many brokers/consultants will charge a fee for sourcing the best deal and providing advice. Some (Jackson Grundy Mortgage Services included) will not charge an advice or processing fee as they will receive payment from whichever lender you choose to make your application to. At this stage you will usually be required to pay your mortgage valuation fee (unless it is offered free by the lender) which is in effect a basic form survey of the property, but should highlight any areas of serious concern as it is conducted on behalf of the mortgage lender (N.B – in some cases a ‘desktop’ valuation is carried out instead, which does not involve a visit to the property at all). Should you wish to upgrade to a more in-depth report you should say so at this stage, as often both can be conducted by the same surveyor during the same visit saving time and money.
Depending on the processes of the lender the valuation/survey should be booked at the property within 1 – 14 days after the application was submitted, the results of the survey issued to the lender a couple of days later, with the mortgage offer following shortly after. At the time of writing the average mortgage approval is taking around 2 to 3 weeks from application to formal offer. Less straightforward circumstances will usually result in the lender requesting further information from the buyer and the process taking longer, in these cases cooperation and proactivity from the buyer is very important in reaching a successful conclusion.
Step Five - Buyer and Seller Action - Working With Conveyancers
Around the time of the valuation/survey being booked a draft contract should be issued by the seller’s conveyancer to the buyer’s conveyancer. This draft contract is then reviewed and in almost all cases the buyer’s conveyancer will raise enquiries on the contract. In essence they are seeking further clarification and/or making requests of the seller or their conveyancer. Sometimes these enquiries can come in more than one tranche. Sellers should endeavour to respond as quickly as possible to any enquiries which are put to them. In conjunction with the agent, both buyers and sellers should also be prepared to give their conveyancer a friendly nudge should it transpire that the draft contract has not been issued, or enquiries have not been raised within acceptable timescales.
The length of time it takes for all searches, all replies to enquiries and the formal mortgage offer to come in can vary significantly depending on any unearthed complications and the proactivity of buyer, seller, conveyancers and agent – this is why we believe it is so crucial for a seller to instruct an agent who recognises post-offer sales progression as an important part of their job. Even if the agent is only responsible for keeping lines of communication open and helping to expedite more serious issues it can be the difference between a sale successfully completing or it falling through.
Step Six - Buyer and Seller Action - Contact Signing, Deposit Transfers, Completion Date Agreement
Once all the paperwork is back and in order it is time for the buyer and seller’s conveyancer to request their respective clients sign contracts. There is not yet a legal binding agreement until those signed contracts are ‘exchanged’ between conveyancers. Around this time, if not before, discussions should take place, often aided by the agent, regarding a mutually acceptable completion date (in most cases your moving date). Our best advice here would be to try to remain as flexible as possible as this can be a challenging step, especially if there is a long chain involved all of whom need to agree the same date. Because of this we usually advise time off work or removals are not booked until this date has been agreed. Around this time the buyer will be asked to transfer their deposit funds which will have been agreed previously. Once contracts are signed, completion dates agreed, and deposit funds are with the buyer’s conveyancer exchange of contracts can take place. At this point the situation becomes legally binding, usually with the completion date locked in.
Step Seven - Confirm Moving Plans
You can now confirm all your moving plans. Expect legal completion to take place once the funds have been received by the seller’s conveyancer, and keys can usually be collected from the agent’s offices once they have been informed of such, although we recommend you call the agent to confirm ahead of making your journey.
We hope this information is useful to you and wish you every success in achieving a smooth-running transaction and every happiness in your new home.
**This is not designed to be an exhaustive list and we do not take responsibility for any errors or omissions. You should take advice from your chosen conveyancer on any matters of which you are unsure**