(February 2019) Those thinking about Spring and the changes it may bring are likely to be focused on the countdown towards the Brexit deadline of 29th March, but there are also homeowners, estate agents and solicitors up and down the country who are wondering whether to expect the traditional upsurge in the property market in April and May.
It’s not looking very rosy, according to recent figures from the Royal Institution of Chartered Surveyors, whose members reported that they expected sales to fall in the next three months. Overall, their outlook for the housing market was the worst for 20 years, and the lack of clarity around Brexit has shouldered the blame for that, with lack of supply and affordability also affecting sales.
The conditions are combining to create a buyer’s market for anyone with a mortgage offer, and sellers should get themselves well prepared before they put up the For Sale sign, as it could make the difference between a failed sale and a completion.
Savvy sellers are instructing and making ready before they market. That includes making sure their solicitor has already examined the title, lined up all the paperwork, anticipated any problems and dealt with them in advance. It’s a tactic that avoids delay later and means they are ready to act immediately when a buyer is found.
Here are some of the most likely stumbling blocks to avoid:
Dig out your deeds
Old deeds and conveyancing documents may be important, even though most properties are now registered at the Land Registry and the owner’s title consists of an electronic entry held by the Land Registry. But the old deeds may contain information that does not appear in the Land Registry records. For example, the Land Registry title may state that a property is subject to certain rights or undertakings – known as covenants – but the record may not include the details about what exactly those rights or covenants are, and the only way of finding out is by referring to the old deeds.
Document your building works
It’s tempting to throw away old papers when spring cleaning or thinking of moving home, but anything relating to renovation or upgrading on a property should be kept safe and sound, to avoid problems and delays when you come to sell your house.
Internal modifications may have required building regulations consent and, when the work is complete, you will need a certificate confirming that those regulations have been satisfied, together with any planning permission, if that was also required.
If you are in a leasehold property, then works requiring approval by the freeholder will need to be documented as well.
Validate your upgrades
Be sure of what paperwork a tradesperson is supposed to provide and make sure you have it on file.
Any work involving electricity or gas should be carried out by someone who is suitably qualified and they should certify that the work has been properly carried out in accordance with applicable regulations. Similarly, new oil boilers or oil tank installations should have an OFTEC certificate and new windows should have a FENSA certificate.
It is down to the householder to make sure these documents are provided, so if a tradesperson didn’t give you the right paperwork, then track down what you can before you get too far along the sale process.
Be prepared to bargain
Bargaining doesn’t always stop when the sale price has been agreed. Often a survey may throw up unexpected problems that give a reason for a buyer to come back to the bargaining table, but in tough conditions there can be cases of gazundering when a buyer tries to agree a lower price just before exchange of contracts. Like gazumping, where the seller tries to hike up the price or accepts a higher offer, both practices are perfectly legal; there is no binding agreement as to the price or any other term of the bargain until contracts are exchanged – which usually only happens four to six weeks after the prospective buyer’s offer has been accepted and the conveyancing process begins.
It may be worth asking your solicitor to state at the outset, when they send out the draft contract and supporting papers, that if the buyer attempts to negotiate a lower price, they will immediately insist on the contract papers being returned, which can act as a psychological deterrent to the buyer.
You may still be challenged for a price reduction, and you may decide to agree to one, but you start from a stronger position.
Don’t change the ground rules
Disputes over what is included in the sale can delay completion or scupper a sale. Everyone has heard stories of fixtures and fittings going missing. Gardens being emptied of plants, or fitted units being removed. This sort of detail should have been agreed when the estate agent drew up the details of the property, as anything that is included should have been specified in the sales particulars. If anything is subject to separate negotiation, then that should be clearly set out and agreement made separately.
Be fraud aware
Residential property is a primary target for fraudsters because of the sums at stake. Fake buyers may set themselves up with fake identities and initiate a property purchase so they can channel off mortgage funds. Cyber-criminals are known to be hacking into email exchanges on legitimate property transactions, apparently by using technology that scans through millions of emails to identify data patterns that may reference valuable financial transaction information and then targeting parties involved to try and re-direct funds. Be aware of the potential for fraud when dealing with each stage of the transaction and always verify everything, even where you are sure you know who you are dealing with.
Keep up with the stamp duty
If you’re buying as well as selling, then be aware that new rules for the payment of stamp duty from 1st March 2019 mean that the return must be filed, and the tax paid within 14 calendar days of completing a purchase, down from the previous 30 day deadline. While your conveyancer is likely to be making this payment on your behalf, make sure there are no queries to resolve and that you have signed all the necessary paperwork, if you’re planning on taking yourself off for a holiday to get over the stress of moving.