What to consider when selling your home

If you are thinking of selling your home because, for example, you need more space, you may want to compare the costs of selling your home with the cost of adding an extension, doing a loft conversion or converting the basement into an extra living area.  These renovations can even add value to your home. 

If you still decide that a sale is the right thing for you, you should be wary of property prices in the housing market. While it is very difficult to predict whether the market is likely to increase or decrease in value, you can speak to an estate agent or property valuer to ascertain recent trends and selling prices in your area. 

Depending on your circumstances, you might be better off renting your home rather than selling it. For further information, read Renting property. 

As is the case when you buy a property, there are financial consequences and things you should consider when selling property. If you have a mortgage on your property then you must notify the lender of your intention to sell. 

You should check your mortgage policy for any outstanding mortgage due and whether there are any early redemption penalties. Once you value your property, then you can calculate how much money you will receive in the sale after you’ve paid off the mortgage. 

If you’re going to buy a new home then you may need another mortgage for this purchase. You should speak to a mortgage broker or your current provider about how much they will be willing to lend you for the purchase of your new home. 

At these early stages, your house value figures and mortgage redemption amount will be approximated only. This is because you don’t know exactly how much your house will sell for and you will only receive a precise mortgage redemption amount once you’ve exchanged contracts for the sale.

You don’t always have to pay capital gains tax (‘CGT’) when you sell a property. You won’t pay CGT when you sell (or ‘dispose of’) your property if all of the following apply: 

• you’ve lived in it as your main home for the entire time you’ve owned it 

• you haven’t let part of it out or used some of the property for business purposes only 

• the grounds, including the buildings, are smaller than 5000 square meters

• you did not buy it just to make a gain

If the above factors apply then you’ll automatically get private residence relief.

Although it is possible to sell your home privately the majority of people use an estate agent. They bring professionalism and skills that often result in your home selling quicker. However, estate agents come with fees.  Their fees vary greatly depending on their location and size. The fee is usually a percentage of the selling price and VAT. Look out for any additional marketing costs that the agents add and make sure you agree to all these costs. 

If you do choose to use an estate agent to sell your home then you must sign a legally binding contract. Both you and the agent must stick to the terms of the contract. Estate agents are legally obliged to tell you about any offers put on the property, right up until contracts are exchanged.

An Energy Performance Certificate (EPC) contains information about the energy efficiency of a property. It also provides information about the property's energy use, typical energy costs and recommendations about how to reduce energy use and save money. An EPC gives the property an energy efficiency rating from A (most efficient) to G (least efficient).

When a property is sold or rented out the seller or landlord must provide the buyer or tenant with a valid EPC free of charge before the property is marketed.

For more information about your obligation as a seller to provide an accurate EPC, read Energy performance certificates or EPC.

Once you’ve accepted an offer on the sale of your property, you will need to instruct a solicitor or conveyancer to proceed to completion. If you’ve used an estate agent then the buyer must make an offer to the estate agent. A buyer can make their offer directly to you if it’s a private sale. 
Offers for the property can be made verbally (eg over the phone) or in writing. An offer isn’t legally binding in England and Wales until contracts are exchanged. The process for making an offer is slightly different in Scotland.

Once you accept an offer for the sale of your property you as the seller are responsible for drafting the legal contract to transfer the ownership (you can instruct a solicitor or conveyancer to do this). 

The sale contract is up for negotiation and details: 

• the sale price

• the property boundaries

• which fixtures and fittings (like carpets and kitchen units) are included

• any legal restrictions or rights, like public footpaths or rules about using the property

• any planning restrictions

• services to the property, like drainage and gas

• when the sale will complete

Much like estate agent fees, conveyancing costs can vary upon whether you are being charged on a fixed fee or hourly basis (fixed fees are recommended). In most cases, the fee is linked directly to the value of your property. But you should look out for any hidden fees such as photocopying costs and phone calls, Stamp Duty Tax return (in England), Land and Buildings Transaction Tax returns (in Scotland), Land Transaction Tax returns (in Wales) and dealing with your mortgage lender.

When both you and the buyer are satisfied with the contract, you sign a final copy and send it to the buyer. This is a legally binding agreement and once it is signed, neither party can pull out without paying compensation. 

After you exchange contracts, you proceed to completion. Money is transferred from the buyer to you for the sale of the property. The legal documents needed to transfer ownership are handed over to the buyer. You will then move out and leave the property in the state agreed in the contract (ie furnished, with or without white goods). You hand over the keys to the buyer and the property then belongs to the buyer.