If you’re a first-time buyer there is a whole host of conveyancing advice online to help you take your first step onto the property ladder. But what about when you’re ready to take the second step?
As a ‘second stepper’ – yes, that really is a term – there’s a temptation to think that you have an advantage over first-time buyers. You’re familiar with some of the legal terms, you know how much it really costs to run a home and you understand the value of prompt communication with your conveyancer(!).
So why is it that 60 percent of ‘second steppers’ in a recent Lloyds Bank survey say buying their second home was more difficult than their first?
Quite simply, buying and selling at the same time is a bit more complicated. So, what do you need to be aware of and what can you do to help make things run as smoothly as possible?
Get your home on the market
If we look at what motivates second-time buyers, it’s usually the practicalities: more bedrooms, a driveway, bigger garden, better school catchment area, distance to work etc etc…
With all this at play, many people ‘find’ their second home and then put their house on the market. But it’s always best to have your house up for sale – preferably under offer – before making an offer on your dream house.
If you’re under offer you’re highly motivated and now know exactly what your buying budget is. You therefore become a more attractive buyer to your potential seller.
Familiarise yourself with Stamp Duty
The rules on paying Stamp Duty Land Tax are different if you’re not a first-time buyer.
You usually pay Stamp Duty Land Tax (SDLT) on “increasing portions” above £125,000 when you buy residential property. You’ll want to know exactly how much this will be from the get-go. To get an accurate calculation, check out HMRC’s SDLT calculator.
Have your paperwork in order
The buyer and their solicitor will want to know as much as possible about the property you are selling. This will include certification and warranties for a range of things, including:
· Building regulations approval and planning permission
· Any Party Wall Notices/Schedule of Condition’s
· Copies of any planning permission applications
· Copy of your Energy Performance Certificate (EPC)
· Copy of any Fensa Certificates for window replacements
· Copy of any other warranties, including NHBC certificates if you live in a new build
· Consents (if applicable) and information for any extensions or improvements
· Gas and electrical safety certificates
If you are selling a flat, they will also need:
· Your Lease Agreement
· Copy of Ground Rent documentation
· Service charge documentation
The sooner you start collecting all this information, the better!
Return forms and answer queries quickly
The first and by far the longest form you’ll have to complete is the standard Property Information Form (PIF or TA6). You can speed up the conveyancing process by quickly responding to the request to complete this from your buyer’s solicitors.
The PIF can take some time to complete and you’ll more than likely have some questions for your conveyancer. So the sooner you can make a start, the better. These forms are usually standardised, so to help, you can download the TA6 guide and collect your answers.
“Your buyer’s solicitor will likely have some follow-up queries, so make sure you are thorough and quick in your response.”
Think with your head
There’s so much emotion wrapped-up in buying a second home. It’s somewhere you’ll make memories that’ll last a lifetime. It’s hard not to get too attached, but when it comes to the initial property searches and checks, take any concerns your solicitor has seriously.
For example, if the owners of the property you are hoping to purchase cannot provide certification for structural or building work carried out, you will need to consider your options carefully. Your conveyancer might advise on placing an Indemnity Agreement between you and the seller to ensure you would be indemnified from any costs associated with poor works.
Be realistic with a chain
Buying and selling in a chain is not without its risks – that’s why chain-free properties and buyers are at an advantage. Chains can and do break and emotions can run high. So how can you coax the chain along?
Your conveyancer will be able to speak to the solicitors one step up and down the chain, but your estate agent will be your greatest ally with more freedom to talk to all parties in the chain. If you’re worried about bothering them, please don’t be. Their interests are much aligned with yours – remember, they only get paid if the sale goes through!
Remember to be realistic though. If the chain runs smoothly, you can expect to complete with 6-12 weeks, but it can take much longer. According to Zoopla the average sale time in a chain is six months and so you’ll need to be realistic about your timings.
Set a completion date
Once surveys and local searches are returned and any issues settled, you’re ready to set a completion date and contracts can be exchanged.
This date must be the same for all parties in the chain. Your conveyancer and estate agent need to take an active role in making sure everyone agrees. From experience, success requires a delicate touch, one that shows appreciation for others’ needs in the chain – a team effort.
But don’t book the removal company yet! Until exchange of contracts has taken place, moving dates could change.
Avoid completion day delays
On the day, your conveyancer will require money from your sale transferred to them before they can send the money needed to complete on your purchase.
In turn, your buyer’s solicitor will need to be in receipt of funds from your buyer’s buyer. Any delay from the bottom of the chain will impact all the way up.
When lenders are involved, delays can occur given the high volumes of transactions taking place on the same day. You can reduce the risk of delay by avoiding high-volume completion days such as Fridays, the last working day of the month or a bank holiday. Of course, this depends what everyone else in the chain wants!
You won’t want to miss the completion deadline, which is usually 1pm.
Funds received after the agreed time will be treated as being received the following working day. In this case, the seller would be within their rights to withhold the keys to your new home until the funds have cleared and you would be in breach of contract.
Having a good conveyancer working on your behalf will make all the difference and significantly reduce the risk of you missing the deadline.