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Many house sales and purchases involve several properties in a chain of dependent transactions.
The length of the chain may vary but the object of all those involved is to make sure that all contracts in the chain are exchanged at the same time, with the same completion date, so that all parties can move on the same day. The money paid by the first buyer in the chain is passed down the chain to provide the money for all the subsequent transactions, supplemented by mortgage or other money on the way.
As a result every person in the chain has to be ready to exchange contracts before contracts can be exchanged by any one. This may take time and the delay can be frustrating.
If you are selling your property through an estate agent, part of the agent’s role is to keep in contact with other estate agents in the chain to check how matters are proceeding. We will only be dealing with your buyer’s solicitors, not solicitors further down the chain.
Wherever possible it is best to sell to someone who has no property to sell or at least is involved in a short chain. Sometimes an offer will be received from a ‘cash’ buyer. This needs to be checked as sometimes ‘cash’ simply means that the buyer does not require a mortgage. Your estate agent should check this for you before you agree to accept the offer.
Until ‘exchange of contracts’ either the seller or buyer may withdraw from the deal. The other party cannot claim any fees or expenses from the party who withdraws. When contracts are exchanged a binding contract between the parties comes into effect. You should not rely on the sale proceeding until exchange of contracts.
If you are selling your property privately it is important to avoid a contract being created inadvertently. Therefore any letters to the buyer should be clearly marked ‘Subject to Contract’.
Completion is the day you move and the ownership of the property passes to the buyer who is entitled to occupation and the keys. Completion is the day the money is paid by the buyer and becomes available to you.
At the outset we will send you several forms to fill in and return to us. The forms are as follows:
Fittings and Contents Form
This form shows which items you intend to leave at the property and which you intend to take with you. If you have a related purchase and are not sure what curtains, cookers etc. are being left by your seller it is possible to agree this with your buyer later. If you wish to take items, unless the buyer is willing to pay extra for them, this can be indicated on the form. Any additional payments should be made via solicitors with the purchase money on completion and an appropriate condition included in the contract so as to avoid any misunderstandings. Sometimes where you have already agreed a price which includes carpets, curtains and similar items you will then be asked if the sale price can be apportioned between the property and these ‘chattels’. That is because a buyer does not have to pay stamp duty on chattels. This is particularly the case where the total price puts the property in a higher rate band for stamp duty. The difference between stamp duty payable at 1%, and say, 3% is significant. However, it is important that any apportionment of the price is a true reflection of the second hand value of the items.
Seller’s Property Information Form
These forms include questions about disputes, ownership of boundaries and fences, the services connected to the property, planning, guarantee and other matters. It is important that you answer each question carefully and honestly. If you do not know then you can say ‘not known’ but if you do not understand the question or are not sure how to reply then please ask us. Please also let us have the original guarantees and other documents in your possession as we will need to hand these over on completion.
Seller’s Leasehold Information Form
This form is only relevant if the property you are selling is leasehold. Clients sometimes find this form difficult to fill in or do not have all the documentation requested in the form. Invariably we have to write to the managing agents and/or landlord at some stage for additional information so simply supply us with as much information as possible. Managing agents and landlords will make a charge for supplying information and this can vary significantly. If you are selling a leasehold property we will usually ask you to pay money on account at the outset or when we know the exact sum involved.