June, 2022
It’s a time for excitement and relief: you’ve received an offer on your house.
Although you’ve probably been waiting for this moment for some time, there’s still more to do before your house is legally handed over to the buyer.
Below is a walk-through of what you should expect to happen next:
Understanding what your home is worth will help you understand if the offer is a good one or not. If you don’t, click here to find out how to value your own home.
It also useful to know that most would-be house buyers initially offer around 5-10% below the advertised price. Don’t worry, that’s normal.
If you’re confident in your own valuation, you can feel comfortable turning down offers that don’t meet your expectations. If the buyer is serious, they’ll make a new offer, which could be more in line with the sale price you had in mind.
Usually, properties get the most interest in the first week they are placed online.
As a result, you could get more than one early offer. Depending on the market conditions, a strong early bid could also be an indication that you can afford to wait for more attractive offers or not.
If your property has been on the market for a while, and this is your first offer, it’s worth considering it seriously - even if it’s a little lower than you might have hoped for.
If you get an offer that you’re interested in, let your estate agent know.
If the offer is not quite the sale price you’d hoped for, speak with your estate agent. Your estate agent should have given you feedback on all viewings, what their position is and if the potential buyer could increase their offer.
An immediate rejection may turn off the buyer altogether, whereas a revised offer could be the start of a process that gets you closer to the sale price.
Some estate agents suggest using furniture, curtains, and white goods (dishwashers, dryers, furnaces, hot water heaters, stoves, trash compactors, washers) as potential bargaining chips.
Because these items are typically suited - in style and size - to a particular property, many sellers find they’re not going to bring them along to their new home. A buyer may be willing to pay a bit more to have these items already in place when they arrive.
Remember that your estate agent is legally obliged to present every offer that’s made to you.
Oftentimes, sellers discover that multiple buyers express interest at the same time.
Even if you’ve received one serious offer, don’t forget about other interested parties. Your estate agent should be informing them that they’ve received an offer to see if that can motivate other would-be buyers to also make an offer.
As a seller, you may even find yourself in a position where you can get over the sale by having interested parties bid against each other for your home.
Ask your estate agent for advice if you’re unsure how to handle such a situation.
OK, so now you’ve received a strong offer. You and your agent have discussed it and you’re both confident that the potential buyer is serious about moving forward.
You should still try to find out as much as you can about the buyer’s position before accepting the offer, including:
Are they a cash buyer?
Cash buyers are often viewed favourably because they can usually move quicker; they’re not stuck in a chain. If they say they’re going to pay in cash, your estate agent will check for proof.
Does the buyer need a mortgage?
If so, you should be comfortable asking the buyer if they’ve had a mortgage in principle approved. Problems obtaining a mortgage could raise some red flags about whether they’re a reliable buyer. They could also delay the transaction.
Is the buyer in a chain? If so, what are the details of that chain?
If the purchaser needs to sell their own home in order to fund their purchase of your property, that could delay the sale, so this is an important point to clarify. Your agent should gather more information on this before you commit to an offer.
What are their motivations to move, and how soon do they want to move?
This is significant because it should fit with your own needs. As noted previously, whether they’re buying the home in cash or as part of a property chain will influence when the sale can be completed. Large property chains tend to drag on a long time and are more likely to lead to fall throughs. Conversely, cash or first-time buyers may be open to moving quickly, so it’s worth asking about their flexibility.
Consider your own position
Most obviously, you need to line up your next home before you leave your old house.
If you need to move quickly, then accepting an offer from a buyer who’s part of a property chain probably isn’t the best idea. Likewise for someone who hasn’t got a mortgage in principle.
Your estate agent is a great resource at this stage - use them! They’ve seen most variations of sales before and should have helpful advice.
Once you accept an offer, it’s usually under the condition ‘subject to contract’.
That means that the buyer will complete the sale after the solicitors have done their check and in some instances a survey has been completed on the property.
Click here to find out more about what types of surveys are available.
Please remember that just because an offer has been accepted doesn’t mean it’s legally binding.
In fact, the sale isn’t legally binding until the contracts are exchanged. Until then, either the buyer or seller can still back out, for example, by gazumping, or gazundering.
Gazumping occurs when a seller accepts a new, higher offer on their house despite having previously made an agreement with another buyer at a lower price.
Gazundering is the inverse: It occurs when a buyer suddenly reduces their offer on a property after previously agreeing with the seller to a higher one.
They will handle all of the legal requirements for you to ensure you successfully exchange and complete on the home you’re selling.
Once you have appointed a conveyancer you will need to complete all of their paperwork and checks before the solicitor will start preparing the draft contracts.
The agreement that was reached between the buyer and yourself needs to be formalised legally including the price you are paying, the level of deposit, the length of time between exchange and completion and what fixtures and fittings are included. Once the draft contracts have been prepared, your solicitor will send these over to the buyer’s solicitor for approval. The buyer’s solicitor will start their searches before they review the contracts to make sure there are no issues with the property. Please be aware that the process does take time and several different delays or problems can arise, such as:
Click here to find put more about what searches the solicitors do.
Once all searches are back and the buyer’s solicitor is happy, they will prepare the contracts ready to transfer them across to the new buyer.
Once the contracts have been exchanged and the buyer has paid the deposit, it’s time to agree on a ‘completion date’.
This is the date by which you’ll have to leave your property. On the ‘completion date’ keys will be handed over, and the new owners can move in.
The timing at this stage varies, but usually it takes between 5 and 20 days from exchange of contracts and completion.
