Sales progression is an essential part of selling a property which begins with the offer being accepted and continues right through the legal proceedings until the exchange of contracts and completion.
Statistics show that in today’s market one in three property sales fail to complete with the main problems being a breakdown in communication and buyers and sellers not understanding the process.
There are several parties involved in the sales progression such as; solicitors, surveyors, mortgage companies, the buyer and seller and of course, the agent (or agents depending on how big the chain is). While much of the work performed during this period happens “behind the scenes”, it still requires a considerable degree of coordination to keep things moving along.
This is what you can expect to happen during the sales progression process:
Now that you have agreed a sale subject to contract, it’s time for you to instruct your solicitor or conveyancing firm to conduct the legal aspects of the sale on your behalf.
Once a sale has been agreed, information such as solicitor details is collated, and outstanding identification documentations are checked in order to issue the ‘Memorandum of Sale’ (MOS). The MOS is confirmation from the agent of the agreed terms and conditions of the sale.
Your solicitor will require you to complete forms for them to be able to start the conveyancing process. You should aim to get these forms completed as quickly as possible and remember that all information provided in the property information forms should be correct.
If the property being sold is leasehold, then a “management pack” will typically be required (otherwise known as an LPE1 form). The management pack provides information with regards to the block of flats in which the leasehold is held, what the maintenance charges are, whether there is a reserve fund etc. It is the seller’s responsibility to pay for this pack.
Your solicitor will request the deeds to the property from your mortgage lender and office copies from Land Registry. A contact will be drafted by the seller’s solicitor and sent to the buyer’s solicitor for review. The contract will set out the key terms of the sale including the selling price, the time between exchange of contract and completion and any other critical matters.
Property searches (also known as conveyancing searches) are enquiries made by the buyer’s solicitor to find out more information about a property they plan to purchase. As part of the home-buying process, your conveyancer will carry out a variety of 'searches' such as:
The buyer’s solicitor usually raises several enquiries (questions) about the property based on the draft contact, search results, survey or any other matter. Ideally, all enquiries will be raised at one time, however practically, they tend to be raised sporadically as more information is received by the buyer’s solicitor. The seller’s solicitor should answer the majority of the enquiries, however on occasion, they might need to refer the matter back to seller for their input.
Prior to exchange of contract, there is no obligation on either party to proceed, and either party may withdraw without penalty (other than paying the costs that they have incurred for solicitors, surveyors etc). However, an exchange of contract between solicitors creates a legally binding commitment on both buyer and seller to complete the transaction. If either party withdraws from the transaction after exchange, there will almost certainly be legal and financial consequences.
Once all enquiries and outstanding matters have been dealt with and a formal mortgage offer received by the buyer’s solicitor, exchange of contracts can take place. Both the buyer and the seller will sign identical contracts and the “exchange” is undertaken between solicitors. On exchange, the buyer typically makes a “deposit” payment of 10% of the contract amount to the seller’s solicitor. The balance of the purchase price is paid on the completion date.
It is normal practice to allow between 1 and 4 weeks (with 2 weeks usual) between exchange and completion to allow all the parties to finalise their preparations.
Completion is the day that you either receive the funds from the sale of your property or the leys to your new property. Your solicitor or agent will notify you when completion takes place. Depending on the mortgage company, this normally takes place in the morning of the completion date, however where there is a long chain or there are banking delays, it can happen slightly later in the day.
Where you have an outstanding mortgage on the property, the lender will calculate the redemption value as at the date of completion and the solicitor will remit this amount from the proceeds received. Your solicitor will also normally deduct their fees and your estate agents’ fees and pay any balance to you. Following completion, your solicitor will register the change of ownership with Land Registry.
Congratulations, your property is now sold.
If you are thinking of buying a new home or selling your current home, our property experts can help you. Call the team on 0121 430 4448 or email us on email@example.com.
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