How to buy and sell a property at the same time can be an arduous task, but if you know a few simple tricks to keep your chain together, it can be a breeze.
Depending on how many buyers and sellers are in your chain, it is possible to complete the whole process within six weeks. You must however expect the unexpected. Buyers and sellers are not tied into any sale or purchase until each person in the chain exchanges contracts (point 16 below).
The key to getting this right is to remain calm, think logically, keep going and try to not get too stressed. Make sure you keep an open dialogue with the buyer of your property and the seller of the one you want to purchase so that they feel assured that all is going to plan.
In order to have success in buying your new home, first you need to make the old one appealing to a buyer.
Improve your chances of selling your home:
Click here for guidance on how to go about this.
Get your documentation in order (you will need the following):
- Your credit report. You should apply for your credit report before you take any further steps if you intend to secure a mortgage for your new home (if you need one). When applying for a mortgage, your credit rating must be good otherwise the mortgage lender may refuse to lend to you. To be on the safe side, obtain an up to date credit report and ensure that you check it thoroughly before you go any further.
- Copy of photographic ID (driving licence or passport).
- Current P60 (if employed).
- Last two years SA302 tax calculation (if self employed) from Inland Revenue.
- Copy of your tax declaration (if self employed) from Inland Revenue.
- Last three months pay slips.
- Last three months bank statements.
- Monthly expenditure form.
Keep a list of the following handy:
- How much deposit you have.
- Your earnings.
- A copy of your credit report (if you do not have a good credit score, click here.)
- A figure for the costs associated with legal fees from a conveyancing Solicitor.
- A figure for stamp duty to be paid.
Now follow this guide:
1. Head to Zoopla. Enter your home address, select the refine tab to enter your properties details, then select either of the two options shown (estimate or agent valuation) to get your properties value. If you have carried out any home improvements, make sure you update this to reflect the current condition of your home. Print out a copy of the estimate.
2. Get a valuation for your property from at least three local estate agents and the cost of the estate agent fees. Once you have all three sets of fees, negotiate the price down with each estate agent. Don’t be afraid to negotiate with everyone, estate agents, solicitors and insurance companies for your buildings and contents insurance.
3. Obtain an EPC (Energy Performance Certificate) for the property you want to sell. An EPC will advise a potential buyer about the properties energy performance. To find a Domestic Energy Assessor click here. To retrieve an Energy Performance Certificate click here.
4. Have a look online on Rightmove to get an idea of how much you want to spend on a new property. You will get an indication of the current market house prices and what type of properties are available in your desired location. Take a note of a house price in a street you would be interested in.
5. Find a mortgage advisor/broker (preferably one that doesn’t charge you and searches “whole of market”) to see what you can borrow/afford etc. Give them an approximate sale price of your current home and give them all three estate agent valuations. They will also need your Zoopla estimate of your properties worth, your earnings, monthly expenditure form, any debts you have etc and an idea of what kind of property you want to purchase and the cost. They will go through the process with you to advise what you can afford for your new mortgage (if you need one). Contact other lenders to see what offers they have until you feel you have found the right lender/cost of your new mortgage. Check whether there could be an arrangement fee for the mortgage? How much is it and can you afford it? Check whether you want to pay this upfront or just have the lender add it to the mortgage.
If you are doing this without an advisor, speak to the mortgage department of your current lender. Give them an approximate sale price of your current home and give them all three estate agent valuations. They will also need your Zoopla estimate of your properties worth, your earnings, monthly expenditure form, any debts you have etc and an idea of what kind of property you want to purchase and the cost. They will go through the process with you to advise what you can afford (but remember, you don’t have to go with your current lender) for your new mortgage. Contact other lenders to see what offers they have until you feel you have found the right lender/cost of your new mortgage. Click here for the Financial Conduct Authority’s advice on this. Check whether there could be an arrangement fee for the mortgage? How much is it and can you afford it? Check whether you want to pay this upfront or just have the lender add it to the mortgage.
6. Find a buyer for your home first. If you are in a strong position, you can use that to negotiate a better purchase price on your new home. Once you have a buyer you can then find your new home.
7. Find a property you can afford. Ask the estate agent and/or seller questions about the property. Get a price for the property. Check when the property you want to buy was last sold by heading to Zoopla. If it had been previously bought and sold within the last few years, it may have been internally renovated or improved during that time. If you choose to buy it, the seller should have all the receipts/paperwork for any major or minor works carried out.
8. If you are purchasing a property that requires alterations or building works, now would be a good time to contact a builder to get an idea of much this would cost. Give these costs to your financial advisor/mortgage advisor/broker or current lender to see if you can afford them or if you were considering adding these as additional borrowing to your mortgage.
9. Go back to your mortgage advisor/broker or current lender, check again the price of the property, if you need to borrow further funds for building costs, whether you can afford the stamp duty, legal fees and most importantly that you can afford it.
10. Check with the buyer of your current home that they are still happy to go ahead with the purchase and the chain is still intact.
11. If all the figures work out and the chain is still intact make an offer on the new property.
12. Once accepted, your lender will want to view the property to ensure the amount borrowed reflects the actual condition of the property. This is known as a Valuation/Mortgage Valuation. If the lender advises they will not lend as the sale price does not reflect the condition and value of the property you can either pull out of the purchase or ask the seller to reduce the price accordingly.
13. Most people will now engage the services of a building surveyor who will view the property to provide you with a Building Survey/Home Buyers report. The report will confirm the value of the property and will pick up things like problems with electrics or whether the property will need a new roof etc. Once you have had a survey carried out, you can ask the seller to reduce the price if any issues arise. This is an invaluable asset when buying any property and worth spending money on. If further issues are raised in this report and the property requires further investigation, you will then need to engage the services of a Structural Engineer. The engineer will then provide you with a Building Inspection Report/Full Survey/Structural Survey. Again you will be able to negotiate the price of the property you are purchasing with this report if it does indeed require more work. If the property you are purchasing has a history of subsidence or the property has subsidence, you will need to look into the costs associated with subsidence insurance. If all issues are resolved, you are ready now ready to exchange contracts.
14. If at any time before you exchange contracts you feel that this is not right for you, your financial situation changes, there are too many issues with the property you are going to buy or have decided not to sell, you can always pull out of the chain. This can be a heart breaking time for other people in the chain, but you must do what is right for you. It is not uncommon to find yourself or someone in the chain in this position, but the most frustrating thing to do is not inform the people in your chain straight away. So please make sure you let the chain know as soon as you make that decision.
15. At this point gather all the email addresses of each buyer/seller in the chain (if you can) by asking the owner of the property you are about to purchase to give them to you. Then ask the seller for their solicitor’s email address and the emails addresses of the Estate Agents involved in the chain. Generate one email with everyone copied in advising who you are, what property you are buying/selling in the chain and what you have been advised your solicitors are waiting on from elsewhere in the chain. This is THE best way of making sure everyone in the chain knows who or what is holding things up. It is quite an unusual way of making sure the chain pulls together to make everything go through on time. It can and does work and each person in the chain (except the solicitors) will thank you for it. The Solicitors may not respond but if they do, they will probably tell you to stop emailing them but the point is that everyone in the chain will know where they stand and these emails encourage the actual people in the chain to respond to give their position. There will be no more “it is with the seller’s solicitors” or “we are just waiting on something from this buyer” etc. Everyone in the chain will now know where the problem lies and any hold ups. This will make the transition go much more smoothly.
16. You should now be in a position to set an exchange of contracts and completion date. Some people decide to exchange and complete on the same day and this is possible to request. You are now officially committed to the sale of your old home after the exchange of contracts. You may be asked to pay a holding deposit, but most sellers do not need that once contracts have been signed.
17. Completion date is set, now you should be looking into buildings and contents insurance for your property. You should be advising utility companies of your moving date and packing your home for the move. If you have a lot of furniture, you could look into hiring a removal company to help you. For guidance on how to do this, click here.
18. Completion date has arrived! Keep in contact with your solicitor throughout the day (if the completion is set for a specific time) and be ready to leave the property at that specific time. Do not leave your buyers waiting for you to finish packing!
19. Congratulations on your move!
20. Your solicitor will register the property with the Land Registry for properties in England and Wales and you will receive the title deeds to your new home.
You should now look to reviewing your mortgage life insurance to take into consideration the change in cover you may now require.
If you are remortgaging to buy something for your property, you should now look to reviewing your buildings and contents insurance to take into consideration the change in cover you may now require.
You should now follow our when you move checklist and our everything you need to know when you move into your new home.