Planning on Moving Home in 2020?
13th November 2019
13th November 2019
Planning to move home next year and need to sell your existing property first? Worried about what to do when and how far in advance to start your preparations? No problem!
Take a look at Maddison Residential’s handy list of what to remember and when to do it in this week’s blog.
It might not seem the most obvious pre-move preparation but checking your credit file is the most important initial step. Although financial experts recommend everyone should check their credit file annually, a large proportion of us fail to do so. If you’re one of that number, it’s even more important to check now.
As well as looking at your credit score, you need to check for erroneous or out-of-date information that might be pulling your score down. Given that you cannot know which of the three main credit agencies (Experian, Equifax and TransUnion) a mortgage lender will refer to, it is prudent to check your file at each of them.
Many major life events ought to prompt a financial health check. Planning a house move is no exception. If you need a mortgage, all lending institutions will perform an affordability test on your finances. Before subjecting them to this sort of external scrutiny, make sure you have paid down any existing outstanding non-mortgage debt (or as much as possible) and avoid making any new credit applications.
Next, go through your regular expenditure and look for discretionary items you could cut out. This is particularly important if you have concerns about passing a lending institution’s “stress test”. It also has the advantage of accustoming you to a lower discretionary spend before your mortgage payments increase and boosting your savings pot.
Your current place might be too small or in the wrong location (or even both), but before you put it on the market, you need to know how much it will cost to get the sort of property you do want. Trawling estate agents, whether online or via their shop fronts, is the obvious first move. However, don’t plan to base your entire search on asking prices. Make sure you also look at sold property prices over the last six months to a year. This information is essential to help you decide whether you can afford what you want.
A second essential part of working out your purchase budget is to have your current property valued. If your equity in it has increased, this will obviously make moving up the ladder easier. Finally, if you’re going to need a mortgage to finance your onward purchase, you’ll need to speak to your current mortgage provider (if you have one) as well as exploring different deals offered by other providers. However, before you do that, make sure you have undertaken the financial health check detailed above.
Assuming you’ve already had your property valued, you will have a good idea of what it’s worth. You may also have a preferred estate agent. If you haven’t already done so, it’s now time to get some additional valuations. Three is the usual number, as it enables you to zero in on the average figure. While valuations do not necessarily translate into sold property prices, they are a useful indicator, and can help you pick an estate agent.
You’ll want to think about fees and commission rates, tie-in periods, whether you want a sole or multiple agency arrangement, and whether you would prefer an agent to conduct the viewings.
It’s tricky to say for definite when it’s the right time to begin the search for your onward purchase. In a fast-moving market, you may not want to lose any time, but sellers are unlikely to take you seriously until you are “proceedable” (i.e. have accepted an offer on your current home). Few sellers will expect you to have exchanged. However, until the chain is closed and you have exchanged, you remain vulnerable to gazumping.
Although the old colloquialism “how long is a piece a string” definitely has a role to play, it is possible to set out the average timescale for a property purchase. Just to reiterate – note the use of the word “average”. Yours may take longer. In England and Wales, unless you buy at auction, do not need a mortgage, already have a solicitor and perhaps are happy to dispense with commissioning a survey, it is unlikely to take less time.
This averages between 20 and 90 days, depending on the state of the market and, in particular, whether demand outweighs supply. You may also notice distinct local variations even between places that are only a couple of miles apart. Similarly, demand may be higher for one type of property (for example, family homes) than another (such as 1 bedroom flats).
On average, this takes between 15 and 30 days. You might expect it to take longer if your credit rating is less than sparkling or if you are self-employed. It may also take longer if you are older than around 45 (but still want a standard 20 – 25 year mortgage deal).
Even if you already have a solicitor that you use for other matters, they might not be the right person to act as the conveyancer on your property purchase. Some firms of solicitors or licensed conveyancers may also be reluctant to act on more complicated purchases. It is sensible to make enquiries with two or three firms, and to establish the service they provide and the fees they will charge before committing yourself.
On average, you can expect settling on a solicitor and formally instructing them to take between 7 and 30 days.
It’s usual for the survey and searches to take between 5 and 6 weeks. At this point, provided nothing untoward has been uncovered, you can expect to exchange contracts.
Although completion can be set for the same day as exchange, it’s more normal for there to be a gap of between 7 and 30 days before completing and receiving the keys. This enables both parties to arrange movers and contact utility suppliers. It also provides a potentially welcome breathing space for buyers currently in rented accommodation and sellers who have agreed to move into a rental home.
For more great tips on selling your property – and finding a new home – visit Maddisons Residential in The Pantiles.