Selling a home
This information applies to Scotland only
The Home Report
From 1 December 2008 most houses or flats which are marketed for sale will require to have a Home Report and to make it available to potential buyers. There are some circumstances when you do not have to produce a Home Report, for example if you are going to sell your property to a private individual without putting the property on the market. The person who is marketing the property is responsible for producing the Home Report. The responsible person will be you, unless you have appointed an agent to sell the property and have transferred that responsibility to them. There are three parts to the report: a single survey of the property, an energy report and a property questionnaire. More information about the Home Report can be found on the Scottish Government website at www.gov.scot.
Energy Performance Certificates
You will have to provide an Energy Performance Certificate (EPC) to potential buyers free of charge. From 9 January 2013, when you advertise a property for sale you must include EPC information in the advert. The Energy Performance Certificate must include details of any Green Deal plan as the buyer will have to take over any repayments for the Green Deal loan. If you are producing a Home Report the EPC will be included in the Report. Failure to provide an EPC can result in a penalty charge by the local authority of £500. If you are not required to produce a Home Report you must obtain an EPC from an agency accredited to Scottish Building Standards which is part of the Scottish Government. Details of accredited agencies can be found on the Scottish Government website at www.gov.scot.
There is information about the Green Deal scheme on the GOV.UK website at www.gov.uk.
Finding a buyer
You want to find a buyer yourself
If you want to find a buyer yourself, you can advertise, set a price, and show people round. However, you will need a surveyor to carry out the single survey and energy report for the Home Report. A selling agent can provide essential advice before a property is up for sale about the price that may attract the greatest interest, any repairs or decorating that will make the sale more straightforward, and whether or not there are likely to be any problems. These could be, for example, unauthorised alterations, or any necessary repairs. It would be advisable for you to find a buyer yourself only if you are familiar with the property market or already know of at least one person who is interested in buying. Although you can choose whether or not to sell the house yourself, the legal side of selling a property must be dealt with by a solicitor. Even if you are going to sell the property yourself, you should talk to a solicitor first, to try to ensure that there are no unexpected legal technicalities at a later stage.
Using a 'quick house sale' company
There are a number of companies that offer 'quick house sales'. A quick house sale provider offers to buy a property or to find a third party to buy it quickly, and usually at a discount.
If you are considering selling your home using one of these firms, you should be careful. Before it closed, the Office of Fair Trading (OFT) completed a study of companies that offer quick house sales. It warned people about the risks of using some companies. For example, a company may reduce the offer to buy your home at the last minute. Or you may not be clear about who is actually buying your home, or whether they have the necessary finances in place.
Using an estate agent/solicitor as a selling agent
When you want to sell your property, in almost all situations, it is advisable to use a solicitor or an estate agent to act as a selling agent and to find a buyer. It may be more expensive to have a selling agent but they will take responsibility for producing the Home Report, advertising, negotiating a price for the house, and if necessary showing potential buyers round.
There is a range of issues that you should consider in trying to decide whether to use a solicitor or an estate agent to organise the sale. These are:-
- what the fee is – if only a solicitor is used it will be useful to get quotations from several firms as there can be differences. If an estate agent is used for selling the house, a solicitor will also have to be used for the legal side of the transaction. This means that it will be necessary to get quotations from both types of firm, perhaps several of each, to get an estimate of the fee. Quotations should include all outlays as well as fees
- whether either specialises in the type of property being sold or has particular local knowledge
- whether the estate agent belongs to a professional association. An estate agent must belong to an approved redress scheme. All solicitors firms are members of the professional association called the Law Society of Scotland
- what is known locally about the firms
- whether the solicitor or estate agent has been recommended to you by someone whose judgement you can trust and who has employed them before
- an estate agent can work for you and the buyer which can create problems of a ‘conflict of interest’. A solicitor can act for only one party at a time.
Estate agents’ and solicitors’ fees for selling
You should check what is included in the fees for selling or whether you have to pay extra for:-
- producing the Home Report
- a valuation before selling
- advertising costs
- a ‘For Sale’ board
- providing a viewing service.
What type of agreement can you have with the selling agent
Many estate agents provide a contract which specifies what services they will provide and what your rights will be, for example, to terminate the agreement. If you have problems with the agreement you may need the help of an experienced adviser.
Complaining about an estate agent
All estate agents must belong to an approved redress scheme. There are two approved schemes, the Property Ombudsman and the Ombudsman Services: Property. If you have a complaint that has not been resolved satisfactorily by your estate agent you can complain to the redress scheme that your estate agent belongs to. Estate agents that refuse to join a scheme can be fined.
For more information about using an estate agent, see Problems with buying and selling a home.
Choosing a solicitor or conveyancer
Most firms of solicitors offer both an estate agency service and a conveyancing service. This is the technical name for the legal work in buying and selling property. Although most firms can take on this work, some firms concentrate on this area of work and have substantial experience. You should ask for written quotations of the fees and outlays and it will be useful to have quotations from two or three firms. Even if an estate agent has recommended a solicitor to you, you should obtain a quote for services and meet her/him before agreeing to giving their firm the work.
For details on choosing a solicitor, see Using a solicitor.
What a solicitor or conveyancer does
A solicitor may be involved in both the selling and the conveyancing side of the transaction. The main tasks involved include:-
- discussing your needs and explaining the procedures and costs of house sale including the production of a Home report
- receiving and accepting any offers for the property in consultation with you
- getting formal consent to the sale if you are separated from someone with rights to occupy the property
- checking title deeds and preparing a deed confirming the change of ownership
- getting searches of the official records carried out to check that you do have the title to the property that is up or sale and it is not subject to any legal action that would call that title into question
- getting the money from the buyer and where necessary repaying the existing loan on the property
- checking that all documents are correctly completed, signed and recorded
- negotiating with the buyer’s solicitor.
If there are problems with the work the solicitor has done there may be grounds to make a formal complaint. Anyone wanting to make a complaint should seek the help of an experienced adviser.
A list of independent qualified conveyancers can be obtained from:-
The Law Society of Scotland
144 Morrison Street
Deciding on the price at which to sell
If you are using a selling agent you should discuss the price you want for the property with the estate agent or solicitor handling the sale. You may advertise the property at a price described as ‘Offers over...’ which often means that you want no less than that price but ideally more. A property can be advertised at a ‘Fixed price’ which means that the first offer of that amount should secure the sale although, in some circumstances, a seller may accept less than the fixed price. When the property is small, and attractive to first time buyers, it may be important to set a realistic price as they may only be able to borrow what a surveyor says the property is worth.
It is important to discuss the situation with the selling agent as there may be different tactics on price to consider because of the type of property for sale.
Your solicitor or estate agent receives offers from the agents of prospective buyers. If an estate agent is selling the property, s/he will have to pass the best offer on to your solicitor. A variety of offers may be made depending on whether you were looking for a ‘Fixed price’ or an ‘Offers over...’ price. If two or more prospective buyers have shown sufficient interest in the property to have it surveyed then it is likely that a ‘closing date’ will be set for the interested parties to make an offer. On the ‘closing date’ you can then choose the offer you want. You do not have to choose the highest one. If only one person is interested in the property a price can usually be negotiated between the agents of the buyer and yourself.
A buyer may also submit an offer 'subject to survey'. This means that s/he is interested in the property but wants a price negotiated for the property before having to pay for a survey. As a seller of the property you will already have provided a Home Report which contains information about the property, including a survey and a valuation. However, the buyer may need to get another survey to satisfy their mortgage lender or they may want to get a full structural survey. A full survey is more common if the property is very old or unusual.
An offer for a house includes certain basic terms such as a price, a proposed date of entry, and a large number of technical clauses, for example, about liability for common repairs or alterations to the property that have been done without proper permission. You may be advised not to accept the highest offer because other terms in the offer are not suitable. A solicitor must be involved in the process of accepting an offer. Once an offer has been accepted there is usually a period of negotiation between the solicitors for the buyer and yourself about the terms of the offer. During this time the sale is not legally binding and either side can break the agreement.
Deciding who to sell to
Whether you have arranged to sell the house yourself or you have used an estate agent you may find that you receive more than one offer for the house. You can sell the house to whoever you want and do not have to sell to the buyer who offers the most money.
It could be unlawful for a seller to treat people unfairly by discriminating against them. For example, it is unlawful to refuse to sell a property, or to offer it on less favourable terms, just because the prospective buyer is of a particular religion or belief.
If you use an estate agent to sell your property, then it is unlawful to discriminate against someone because of their disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex or sexual orientation. If you sell your home yourself, it is usually only unlawful to discriminate against someone because of their race.
Concluding the missives
The sale of the property is not concluded until full agreement has been reached between your solicitor and the buyer’s solicitor on the terms of the contract. This is achieved by a number of formal letters passing between the solicitors. This is technically known as ‘concluding the missives’. Once this stage is concluded neither the buyer nor the seller can break the agreement without having to pay compensation to the other party.
Completion of the sale
The sale is completed on the ‘date of entry’ to the property when you must have left the property and handed over all keys to your solicitor. Your solicitor must deliver the keys to the buyer’s solicitor along with a formal document called a ‘Disposition’. This transfers ownership of the property. In turn the buyer’s solicitor must deliver a cheque for the full amount of the agreed purchase price to your solicitor.
Discharging the loan
If you still have an outstanding loan on the property this must now be paid off. This will be dealt with by your solicitor, who will obtain a ‘redemption statement’ from the bank or building society and repay the loan from the proceeds of the sale of the property. The solicitor should transfer any profit from the sale promptly to you once the transaction is concluded (Law Society of Scotland Practice Rules 2011, Rule 6.11.1).