You’re selling your home? That’s a major step in anyone’s life signalling a move to new surroundings and a new neighbourhood. Maybe you’re moving for work, up- or downsizing or jetting off abroad to enjoy a nice retirement. The process of selling isn’t necessarily completely straightforward, however, and there are several factors that you need to keep in mind, legal, financial as well as logistical. This article will set out the steps you need to take to make sure you can sell your property hassle-free and stress-free.

1. Consider your current situation


The first thing to consider is your current mortgage. It’s important to look at whether you will incur penalty fees when ending your mortgage and moving. Once you know this, you will then need to consider what mortgage options you have moving forwards.

In terms of the penalty fees, you may incur these if you are still on the introductory rate of your mortgage, and it isn’t portable. To put these in layman terms, the introductory rate is what you are charged initially for a certain term. This tends to be a preferential rate. Once this term is over, you get charged the standard rate which is tied to the central bank interest rates. A portable mortgage is one which you can transfer to a new property. As such, if you decide to move house, a portable mortgage can move with you. If you are on the introductory rate and your mortgage isn’t portable, you may be liable for early repayment charges, which can be anywhere between 1% and 5% of your overall mortgage debt.
The other consideration is what to do with your mortgage. You can either port it to the new property, if it is a portable mortgage, or pay if off and get a new one. The main questions here is whether your current rates are favourable to you and whether you would incur penalty charges for repaying it. A new mortgage would mean different rates and different terms, while porting would retain the same terms you had before.

Freehold v Long Leasehold

Further, another thing to keep in mind in this section is what sort of property you currently own. The main distinction here is between a freehold and a long-leasehold. The latter will be more common if you own a flat. The main difference to consider here is that if you own a freehold, you own the whole thing, including the land and the property on it. If it is a long-leasehold, you own the property but not the land. The reason this distinction is important is the question of extending the lease.

If you own a freehold, then no worries in this regard. Owning a leasehold may present more complication. You may wish to consider extending your lease, as this could add significant value to the property. This is especially the case if your lease is falling below 80 years. This is a question of taking initiative as soon as possible, since waiting too long may be pricey as the longer you wait to extend a lease, the more expensive that action will be.

Think about what you are doing next

Once your home is sold, what’s next i.e. where are you going? Are you selling to immediately buy a new home elsewhere? Are you moving abroad? Are you moving in with someone else? A common action is selling to buy, i.e. moving to a new home and using the proceeds from the sale to fund that. You may need to keep a number of other things in mind in terms of buying property here, from stamp duty to mortgage questions, as well as the onerousness of dealing with another person. Keep in mind your next steps when selling to avoid any unwelcome surprises further down the line.

2. Get your home ready

Prepare for the Viewing

You want to best advertise your home to prospective buyers. You want a homely feeling and a clean and presentable property to best attract a purchaser. This can improve a purchaser’s experience, while even possibly adding value to your home. There are several steps you can take to achieve this, both major and minor:

  • For major steps, this includes repainting or refurbishing. Repainting allows the home to look more presentable and fresher. It is also useful if the paint job is done in a more neutral colour. A white coloured wall looks much more like a blank canvas to a buyer than a neon pink one, allowing them to get a better picture of how they might furnish the house to make it their own. Refurbishing can include anything from fixing airy windows to redoing the bathroom or kitchen. This can be quite expensive, and likely time-consuming, depending on the procedure being carried out. However, the positive side is that it can add value to your house overall.
  • More minor things are actions that you can take on the day of the viewing. Look to have a clean and uncluttered home. Try and make it look pretty by buying plants or decorations. The Phil Dunphy cliché is baking cookies to help the property smell nice and homely, while TV interior designer Bobby Berk recommends a bowl of fruit.
  • Make sure the home is tidy and decluttered. Mow the lawn, clean the windows, clean the house. Even if this requires getting a cleaner in, this will likely be worth it in the end. Think what your perfect home looks like, how it could be cleanest and homeliest.

Once you’ve prepared the house, consider how you want to conduct the viewings. There are many different ways, from doing it online, hiring an estate agent to do individual viewings or organising an open house. Each option has its benefits, with an online approach having greater reach, while the in-person options will give allow the prospective buyer to get a better idea of how it would be to live there.

Get a valuation

You’re going to want to get your house valued to get an appropriate estimate of what it is worth. This is important, as you don’t want to under- or overvalue it, as veering too far to each extreme could impact the sale. Undervaluing it might mean you won’t truly get your value for money, whereas overvaluing it might make it difficult to sell.

A useful first step is valuing it online, using property apps such as Zoopla or Rightmove. These will normally consider a lot of data about your surroundings, for instance the value of your neighbours’ homes, your proximity to schools, amenities and transport links, noise and crime levels, as well as asking prices of properties being sold in your neighbourhood. This won’t necessarily be wholly accurate, but will give a good understanding of the price range you can expect.

The second step to take is to get estate agents in to get an official valuation of the house. MoneySavingExpert recommends asking 2-3 different agents as often valuations can differ between them in the range of up to £100,000. Getting this official figure will consolidate your understanding of what your home is actually worth, giving you a good idea of how to price it.

The price won’t necessarily match up with the value, however. Selling a house can often be quite a tactical affair. All sorts of things could affect the price and you need to work out how, within your parameters, you can make sure the price is as high as you can get it. Naturally, you don’t necessarily have the liberty of endless time to sell your house. Often many need to sell the homes quickly, meaning they may wish to reduce the price slightly to attract more buyers more quickly. If not, consider things like your proximity to various amenities or rail and transport looks. Extra points if you’re close to a Waitrose. Due to the so-called ‘Waitrose Effect’, living close to a branch of the supermarket chain is said to be able to increase the value of your house by up over £36,000, compared to the £22,000 that would be gain from living near to any other supermarket. Otherwise even the season can change the price. According to the HomeOwnersAlliance, the best time to sell is in the Spring, when people aren’t away for the Summer or busy with Christmas.

A final point to note is that you will need to get an Energy Performance Certificate, which provides information about your house’s energy use and efficiency. It is necessary to be able to list your home.

3. Get the right assistance with selling.

When selling a house, there are two main contacts you will need, namely your estate agent and your solicitor. Note, the former isn’t strictly necessary. You can sell your house by yourself, yet utilising an estate agent still remains the most popular method.

You need to decide whether you wish to engage an estate agent. Using one still remains the most popular option, yet many do turn to alternative methods. Using an estate agent relieves a lot of stress for you, as you will be able to leave a lot of the work to them. They will list the house, carry out viewings, conduct negotiations with the buyer as well as assessing the buyer in terms of factors such as their purchasing ability. It means you have less responsibility and less stress in dealing with the sale. It also means you are safer from fraudsters, with estate agents being required to conduct certain assessments of the buyer. The caveat, however, is that they will take a cut of the price, normally 1-2%.

Another possibility is to go it alone. You will save on the sale price, however ultimately you will bear the responsibility of actually selling the property and taking all the steps to do so. Selling a house is a large undertaking, which is why many veer to using an estate agent.

As with any transaction, selling a house is not just about swapping money for the keys. There is a whole legal side to deal with as well. A solicitor is crucial here, and will support you through all the contractual requirements, dealing with the mortgage, liaising with the buyer’s solicitor, assisting you in sorting out all the formalities, as well as handling the proceeds of the sale. They may be especially important to deal with issues that may arise during the process, negotiating these with the buyer’s solicitor.

4. Close the deal.

Once you’ve had an offer, you can choose to accept it. Note that your solicitor is legally required to pass on all offers to you. You don’t have to accept the first offer that comes your way, nor do you need to accept the highest offer. You don’t even need to go through with an offer once you have accepted it. Even if you have accepted an offer, unless it is a term in the offer, there is nothing to stop you from keeping your house on the market and ‘gazumping’, i.e. accepting a better offer.
The main considerations will be deliberated here through your and the buyers’ solicitors, including the exchanging of contracts, finalisation of mortgage questions, as well as the final closing day with an exchange of the keys. You will need to have moved out at this point.

Final things are tying the loose ends. This means moving to your new property, or having at least removed your possessions from your sold one, as well as paying your solicitor and/or estate agent. Solicitor fees for conveyancing tend to be in the range of £500-£1,000. Once all of this is done, you’re done. You’ve sold your property and can enjoy the profits.

5. Taxes

Do I even need to pay?

As with anything financial, when selling your property, the age-old question of taxes comes into play. When selling a home, the tax you will likely be liable for is capital gains tax (CGT). CGT is the tax you pay on the profit that you’ve made when your assets have increased in value.

If you’re selling your main or only home, you will normally be exempt from any taxes. The determining factor here is whether it is your primary residence. There are few exceptions here, however, namely the following:

  1. If the property is very large, i.e. larger that 5,000 square metres.
  2. If you’ve sublet some of it (having one lodger doesn’t count here though)
  3. If part of the property is exclusively a business premises.
  4. If you only bought the property to make a gain

If any of those apply to your property, you will be liable for capital gains tax, even if it is your main residence. Similarly, for any property you are selling you will also need to pay tax.

How much will I need to pay?

Capital gains tax works by taxing the profits of a sale, not the original value of the asset itself. Thus, to proffer an example, you owned a house which was worth £400,000 at the time of purchase. By the time you decided to sell, its value had grown to £600,000. The amount that would be liable to CGT would be the £200,000 increase in value.

Further, how much CGT will be due will depend on your tax bracket, as well as your personal allowance when you sold the property. This is summed up in the following table:

Basic RateHigher,Additional Rate
Income Tax Rate£0-£50,270£50,271-
Capital Gains Tax Rate18%24%
Tax-Free Allowance£6,000£3,000

As such, if you are in a higher tax bracket, you will be liable to paying more capital gains tax on any property you sell. The tax-free allowance is the amount of profit you can make without being taxed.

Thus, selling a property isn’t necessary a simple affair. You need to make sure you take the right steps and engage the right help. The most important thing, however, is simply being proactive. Keep on top of everything. Engage estate agents to ease the stress of the undertaking. Use financial advisors to look over your mortgage affairs.

Talk to one of our expert financial advisors today.

How useful was this post?

Click on a star to rate it!

Average rating: 5 / 5. Vote count: 3

We are sorry that this post was not useful for you!

Tell us how we can improve this post?

What the general election result can mean for your personal finances