(from a seller point of view)
You have come a long way and finally you’ve sale-agreed your property! You have reached an agreement in principle with a potential buyer and that is a very important step forward in the sale process however you need to stay focused because sales fall through all the time for different reasons.
What does that mean and what are the next crucial steps? Sale agreed is a great position to be in but there is still a bit to go!
IMPORTANT: You should not accept a bid and go sale agreed without proof of funds. In some cases people will not want to share this information and may prefer to do it solicitor to solicitor. But either way you as a seller need to know that the potential purchaser has the means to buy your property.
Once you officially accept an offer and go sale agreed, the online bidding ends. This step is reversible so if you ever need to go back on the market you can undo this action.
Here are the next steps you should consider.
Once Sale Agreed you need to contact your solicitor with the purchasers details and their Solicitor’s details. Your solicitor will contact the buyer’s Solicitor and request a fully refundable booking deposit to be paid into their client account.
At this point your solicitor will start working through all the legalities of the case and should keep you informed of the progress during this phase.
Our Advice: You want the conveyancing process to be completed within a reasonable time frame, so make sure to keep in contact with your solicitor to ascertain that everything is running as it should be. If you need to put pressure on your solicitor to get things moving quicker then do. Stay informed of where the Contracts are at throughout.
Remember that a buyer can pull out at any stage before contracts are signed so time is of the essence. Keeping a good level of communication with your solicitor will ensure that you are informed every step of the way of the progress or lack of it.
Before contracts are signed, in the vast majority of cases, a potential purchaser will be advised to do their due diligence. In the case of a purchaser who will be financing through a mortgage the bank would require a property survey and a bank valuation.
A property Survey can be viewed as a health check performed by a professional, usually an engineer or a chartered surveyor, that will inspect the property to determine its overall conditions in order to produce a detailed written report.
The main objective of the survey is to alert the purchaser to any unforeseen structural issues and to any alterations or extensions to the property that may require Planning Permission.
They will examine the structure ( where visible), the quality of materials used , the heating system, windows, doors, ventilation, insulation, dampness, leaks, woodworm, roof structure, fire compliance.
Here is an interesting article on this topic.
Know that you are not obliged to inform potential purchasers of any issues with the property when you are marketing and showing the property however, withholding this information will cause issues further down the line once a survey is carried out and planning searches are completed. Be as informative and truthful as you can be to avoid the sale falling through or a price reduction at a later stage.
Among other things, a surveyor is likely to check the following important aspects:
- Compliance with Planning Permission
- Compliance with Building Regulations
- Alterations and Extensions to original property
If your house has been extended in recent years then you need to provide the documentation that the works completed have been done in compliance with Planning Permission and Building Regulations.
A property survey is not mandatory from a buyer’s point of view but it is recommended and it is the sensible approach. Would you invest your life savings on a property without getting it checked by a professional? The answer is probably no. Remember, if a buyer wants to arrange a survey of your property, that is a sign of commitment, another step forward to closing the sale.
Surveys are not cheap and buyers are paying for them before contracts are signed so a seller should encourage this process and provide access willingly.
What if the survey reveals some faults on your property? What if, after the survey, the buyer decides to offer less?
This is more common than you think and it’s important that you understand the rules of the game.. Some surveys are more comprehensive than others and it is the job of the surveyor to find all the cracks and snags of your property. They are usually very good at it.
Issues such as draft strips/seals, ventilation, leaking gutters, lack of smoke/gas detectors, noise levels.. are commonplace in these reports and easily fixed. They should have no impact on the progress of your sale.
Other topics are more serious such as : dampness, water leaks, structural problems, *pyrite contamination,…
If any of these issues occurs, chances are that you (the seller) are aware of them already.
Some issues might be visible to the naked eye, some won’t.
Don’t let the survey report be the excuse for a reduction in price if the faults are clearly visible during the viewings.
If someone decides to offer less based on the findings of the survey you have the power to decline a new lower offer and perhaps go to the underbidder. Or, you can simply accept it and plow ahead, maybe find some middle ground, a compromise, where all parties are happy to proceed.
It is your choice to make. Our advice is to talk to your solicitor about it. Talk to the buyer. Find common reasonable ground and move forward if you can. This can be a tricky part of the sale. It always is. You have invested time and effort to get to this stage, but so did the buyer.
It’s possibly the last hurdle before signing contracts so both parties have to weigh their options.
Start again or go forward.
Time vs Money.
Our advice: Establish good communication with your bidders from day one. Transparency is key. If you try to hide a fault then you should expect a reduction in price if such fault is exposed. If you genuinely didn’t know about such a fault and would like to seek a second opinion, you are entitled to do that too. Keep all parties informed of your actions to maintain a good level of trust and transparency.
Tip: There is nothing out there that is 100% perfect. Not even new homes. All properties have some issues and need constant maintenance to keep up with age, weather and daily wear and tear. Nobody expects a perfect property. It is the job of a surveyor to highlight faults and cracks. That’s what they are paid for.
If you can show that you looked after your property over the years and you are honest about it, you will move ahead to the next phase without any major headaches.
*Pyrite Contamination: Pyrite (FES2, Iron Sulphide) is a common mineral and traces of pyrites can be found in crushed stone that is used for backfill in construction. It is not unusual to have some levels of pyrite in concrete materials used in construction. If the level of pyrite is low no structural problem of significance is likely to occur. If the levels are above a certain proportion issues can arise that can be expensive to repair
Is the property located in a floodplain?
If your property is located in a floodplain it will cause issues for purchasers who require a mortgage to finance the property. It may be more difficult for them to obtain insurance for the property and their lending institution may not be willing to lend. This is something that should be made aware to people when viewing the property or looking at the property on-line. It will give mortgage purchasers the chance to explore insurance options and make sure that their bank will provide the finance needed.
If this is only discovered at Contract stage it will delay the sale. If there are issues with finance then the purchaser may pull out and as a result of that you will have to go back to the market.
To check if your house is on a floodplain go to: www.floodmaps.ie
At the early stages of the conveyancing, before your solicitor sends out the draft contracts, they will discuss a closing date to aim for. You decide this date (make sure to let your Solicitor know the earliest closing date that suits you, if your new property is not ready until a certain date, then the closing date should be after this date). It is safe to aim for around six weeks after you have gone Sale Agreed. At this stage this is only a provisional date. It is important for all parties to have a realistic date to work towards. This date may move, for example it may take longer than anticipated for the contracts to be drafted (this is why getting your deeds released when you decide to sell is a good idea) or there may be other delays to do with satisfying queries regarding the Survey or Management Company. If these issues arise your Solicitor should advise you if the initial closing date will not be achieved. When the Contracts are signed by the purchaser, they will be sent back to your Solicitor and you will be invited to sign them.
Vacating the property
You will be required to vacate the property on or before the agreed closing date. Make sure you are ready for this date, aim to have all of your belongings out of the property before this date if possible so that you have the final day to give the place a final clean and remember all your good memories there! In most cases, you will have agreed to leave the property empty apart from the appliances included in the sale. Sometimes a purchaser may request to buy some furniture items. If you make an agreement for furniture items and agree a price, make sure that this is seperate from the sale price agreed, as you will be charged tax on the sale amount. The furniture items are not liable for the same tax. Get them to write you a cheque or transfer the monies on the day the sale closes.
It is helpful to leave all keys etc. labelled or where they should be, and any useful instructions for the purchaser. The front door keys along with any car park/gate fobs should be left with your solicitor so they can release them to the purchasers solicitor once all funds are received on the closing day.
Take electricity and gas readings on the day that you are vacating your home. You will want to close your accounts or transfer your accounts to your new property. These will be your final readings. If you are unable to access the meter boxes, contact the companies and let them know the day you are leaving and request meter readings for that day.
You can let the purchasers know what companies you use for utilities and give them the option to set up their accounts. It is up to them to take over or set up their own accounts. Electricity and gas companies generally give a certain amount of time before they cut off, there is then a reconnection fee that needs to be paid.
Similarly close TV, Broadband and telephone accounts for that property. If you are moving to a new property, you will be given the choice to transfer the account.