Most house sellers want just two things; a good price for their home and a quick and effortless sales process. That’s not too much to ask… right?
Unfortunately, the terms ‘quick and effortless’ and ‘sales process’ don’t always go hand-in-hand, which is why we’ve decided to make this handy little guide!
What can slow down a house sale?
In our experience there are two big factors which influence how quick a house sale can take place, specifically:
- Are you in a chain? A simple sale with a first time buyer rarely lasts for longer than three months, whereas long chains can take double that time.
- Freehold vs Leasehold – A leasehold sale can add an extra 2 to 4 weeks onto the duration of the house sale.
Unfortunately there is little you can do to mitigate either of the above scenarios, but they’re worth bearing in mind when it comes to planning and estimating how long everything will take.
But these are just two of a number of things that delay a house sale. Others factors include:
- Conveyancing paperwork: Most commonly this is related to missing the deadline for lodging the TR1: freehold transfer form at the Land Registry.
- Mortgage offer delayed: Don’t assume that an offer in principle is a sure thing. Lenders will only rubber stamp a mortgage and release funds once a property has been found and a full assessment has been carried out. Be sure to plan for this extra time.
- Delays on the survey: Most buyers will need to carry out a valuation survey on the property before their mortgage is fully approved. If the house is tenanted or the seller is rarely at home, then giving access to the surveyor may be more difficult and could delay the sales process.
- Property down-valued: If a surveyor values a property at a lower amount than the agreed upon selling price, then the lender may refuse to loan the full amount. If this happens then the price will need to be renegotiated with the seller or – alternatively – the buyer may need to raise additional cash from other sources.
- Defects found on the survey: In some instances, defects may be found with the property during the survey. If there are any significant issues then the lender may not release the mortgage until repair work is carried out. Alternatively, it could mean that the sale price is renegotiated to cover the cost of any repairs, or the seller may be asked to rectify any issues before contracts are exchanged.
- Delays from the local council: Most house sales will require searches to be made during the conveyancing stage. Many of these searches are carried out through the local council and are intended to discover anything untoward about a property such as boundary disputes, planning constraints, or risk of flooding. Unfortunately all councils operate at different speeds, and in some instances these searches can add small delays to the conveyancing process.
- Issues with the property chain: This is one of the most common reasons for delayed property transactions, as each person in the chain will need to complete on the same day in order to have the necessary funds available. The more parties there are to coordinate the greater the risk of the chain ‘falling through’.
Tips to speed up a house sale
Dr David Higham, a YOPA local estate agent in the North West and member of the National Association of Estate Agents has over 30 years of estate agency experience. Here he shares some of his tips and tricks for speeding up a house sale.
“The easiest way to speed up a house sale is to instruct a conveyancer before an offer has been made on your property. This will allow them to start pulling together the necessary paperwork, giving you a head start on proceedings. If you’re in the process of looking for a solicitor or conveyancer then I recommend you check to make sure that they are CQS (Conveyancing Quality Scheme) accredited, as this tends to mean that they are recognised as offering exceptional service.
Also on the subject of conveyancers, I would strongly recommend you asking them to keep you BCC’d in on all emails. This will keep you updated on how things are progressing, as well as allowing you to highlight and raise any issues early.
The next top tip sounds a bit obvious, but try and be as organised as possible! Now is the best time to dig out any documents related to your property such as boundary disputes, guarantees or planning permissions. As soon as you’ve got everything in one place then hand it over to your conveyancer or solicitor as soon as possible.
Speaking of paperwork, you could always consider paying for a local authority search before you get to the conveyancing stage. These can take up to six weeks to come through and can often slow down the selling process, but if you pay for it upfront then you could always pass the cost on to the buyer later.
If you follow all of these tips then the only thing left to do is to keep lines of communication open, especially with your solicitor (or conveyancer) and estate agent. Ask if they’re waiting on anything, or if there’s anything you can do from your side, as this is a nice way of appearing helpful whilst at the same time giving them a delicate nudge!”
Companies who buy houses for cash
There are more than 100 companies who offer to buy houses for cash, either by purchasing the property directly or through finding interested third-party buyers. The cost for this service is usually between 10 and 25 per cent of the property’s market value.
Unfortunately the quality of the companies who offer this ‘quick house sale’ service varies dramatically. Although there are reputable firms who offer a genuinely high quality service, there have also been reports of more unscrupulous companies in the sector. These less reputable companies have been to known to initially value a property at a mutually beneficial price, before dramatically reducing their offer just a few weeks later. Although there is no obligation for a seller to accept a low offer, in many instances there are time pressures involved and offers are reluctantly accepted.
The Property Ombudsman is currently calling for legislation of the sector, but in the meantime our advice is to check any ‘quick house sale’ companies against the Companies House database at www.companieshouse.gov.uk; if it is not listed then it might be safer to find an alternative. You can also check company accounts and annual turnover on their website.
It is also important to check any contracts with an independent solicitor, and to check review sites such as Trustpilot for previous testimonials. The most important piece of advice is to never deal with an organisation that is requesting an upfront fee from you.
If you aren’t 100% sure about going down the quick-sale route then there are other options available. If you are in a financial predicament and are struggling with mortgage repayments then you could, for example, have an open and frank conversation with your mortgage lender to see if there’s anything they can do to help. They may be happy to listen to your circumstances and discuss an alteration to your previous repayment agreement.
You could also look at selling your property at auction, although you will be legally contracted to the sale once the hammer falls and there is no guarantee how much your property will sell for (other than the minimum price that you set). You will also have to pay auction and legal fees regardless of whether or not your property sells.
Selling your house at auction
Typically, it’s mainly repossessed houses that are sold at auction, but an increasing number of conventional sellers are also choosing to go down this route. In some cases, it is favourable for the seller, particularly when two buyers fight for the house and drive the price up. In other cases, the cost of selling at auction can exceed the cost of an estate agent without much gain.
How much does an auction cost?
Expect to pay between 2% and 4% of the price of the property in auction fees. In addition, there may be advertising costs on top of that. If your house doesn’t sell, you will still have to pay some auction fees. This generally happens when you set a reserve price, although in some cases, there may not be any interest in your home.
The buyer then has to put a 10% deposit down and then pay the remaining 90% within 30 days or one month. This means that completion can be very fast — much faster than with many estate agents. Of course, as with any auctions there is no guarantee on how much your property will sell for. It may be more than you expected, or it may be less. Furthermore, a 3% auction fee would take out £9,000 from a £300,000 property.
In some cases, there is a minimum fee, which can make the overall percentage even higher. A £6,000 minimum fee on a property sold for £80,000 is effectively a 7.5% fee.
One of the major disadvantages to an auction is that your solicitor or conveyancer must attend it with you, and you must pay for their time and costs incurred. This can take out a sizeable chunk of change from your sale. In addition, there is always the potential for disappointment, especially if your home doesn’t sell.
What about the modern method of auctions where the buyer pays the fee?
This is a new method of auction, and buyers usually pay at least 3% or £6,000, whichever is higher. In addition, the sale has 56 days to complete. This can be tempting from the point of view of a seller, as they do not have to pay any money.
The obvious downside is that because the buyer ends up paying more money, the winning bids tend to be lower. Even worse, because the buyer is paying the fee, they must pay stamp duty on the fee, if it applies — it’s considered part of the overall price the buyer pays for the house.
If the buyer pays £600,000 for a property, a 3% fee would be £18,000. Stamp duty would add another £900 to that figure.
