Your Guide to Resales How To Sell Your Shared Ownership Home
Resales Selling your Home with Estuary Housing Association Limited As a Shared Owner with Estuary Housing Association Limited (EHA), we recognise that circumstances change and you may need to sell your share in your home at some stage. We ve put together this guide to help you through the process and make it as simple as possible. Selling a Shared Ownership home is known as a Resale or Assignment as you are selling your home to someone else. Under the terms of your Lease, if you own less than 100% of your home you must advise Estuary Housing Association of your intention to sell your property. You can choose to sell your share at any time, and your Shared Ownership Lease commonly gives us an 8 week nomination period to find a buyer for your share. Please refer to your Lease for the exact nomination period. This is so we can assist other first time buyers to buy a home with Shared Ownership. During this period you may not sell your home privately or instruct an estate agent. The valuation will confirm how much your home is worth, including any improvements you ve made, and will determine the value of the share. You will also need to have an Energy Performance Certificate (EPC) for your home. EPCs provide important information on the existing energy efficiency of your home and make recommendations on how you could improve its energy efficiency. We will arrange for a member of the Sales & Marketing Team to take photographs. When selling your share, you ll need to obtain a valuation which must be carried out by a RICS (Royal Institute of Chartered Surveyors) qualified surveyor. 2 estuary.co.uk sales@estuary.co.uk 0300 304 5000
How It Works Your Valuation Your Lease will require you to obtain an independent RICS qualified surveyor report to determine the value of your home. A surveyor in your area can be found at www.ricsfirms.com. Your valuation is valid for 3 months from the date it takes place, and will need to be extended or renewed if the sale of your property does not complete during the 3 month validity period. Agreeing A Marketing Price When we receive your valuation report we will contact you to confirm the price at which the property will be marketed. The valuation figure will determine the marketing value and should provide details of three comparable properties and their sold prices from the last six months. Your home is valued as if it were to be sold on the open market, at current market value. If you are not happy with the valuation you should discuss your concerns directly with the surveyor. If after this you still do not agree you can appeal to the District Valuer Services. The District Valuer decision will be final and you will also be responsible for the cost associated with this. Marketing Your Home Your nomination period will start from the date we receive your confirmation to proceed. We will advertise your home on Estuary s website www.estuary.co.uk and also on www.sharetobuy.com if you re in a London Borough or www.helptobuyese.org.uk if you are outside of London. We will visit your property to take photos for marketing purposes. We will market your home at your current valuation and won t invite offers. It is not permitted to sell your share for less than the surveyor s valuation. 3
Resales What Are the Costs Involved? As the Leaseholder you will be responsible for: The cost of the valuation and any updates if the valuation should expire before completion. The initial valuation is valid for three months; if the transaction does not complete within this period a new valuation report will be required. The cost of the Energy Performance Certificate (EPC) - An EPC certificate is required to sell your home. A list of EPC providers can be found at www.epcregister.com. Your legal fees. Estuary Housing Association s legal fees. Once solicitors have been instructed the buyer s solicitor will obtain a copy of your Lease and raise leasehold enquiries. Your solicitors will be expected to provide a response to these enquiries by getting some information from Estuary Housing Association. It is standard practice for a fee to be payable for completion of leasehold enquiries and we charge a competitive fee for this. Estuary Housing Association will charge an administration fee of 1.25% + VAT of the market value of the share being sold. In the event that the property is sold on the open market you will be responsible for estate agent fees and Estuary Housing Association s administration fee of 250+ VAT. Rent and Service Charge Arrears - if you have any arrears these must be cleared before completion. What Happens Next? If you have any further questions please contact our Sales & Marketing Team on 0300 304 5000 or email sales@estuary.co.uk. 4 estuary.co.uk sales@estuary.co.uk 0300 304 5000
What Do I Need To Do Next? Appoint a Solicitor Before instructing Estuary Housing Association to proceed it is best to select your solicitor so that you are ready to act promptly when you receive the valuation report, which is only valid for 3 months. We recommend using the solicitor who originally dealt with your purchase as they are most likely to have details of your property purchase. If this is not possible, we can assist you with a list of client recommended solicitors. We always recommend you: Select a solicitor who offers a fixed fee for their services; Obtain a quotation before instructing your solicitor; Choose a solicitor with knowledge and experience of Shared Ownership Leases. Obtain An Energy Performance Certificate There are many companies offering this service. To find a suitable provider visit the domestic EPC register at www.epcregister.com. Instruct A Valuation On Your Home Having obtained the above information, you now need to know how much your property is worth on the current open market. The valuation must be carried out by a qualified independent surveyor, who must be registered with the Royal Institute of Chartered Surveyors (RICS). The report must be sent to the Sales & Marketing Team who will check the details and write to you with confirmation of your property s current open market value. This is your formal offer. Please note the valuation is only valid for 3 months and therefore you must act quickly to complete and return all paperwork to allow us to start marketing your home to ensure a buyer is found before the valuation report expires. If the transaction does not complete during this time you will incur additional costs for a new valuation. 5
Resales Arrange For Us To Visit Your Home To Take Photographs Once you have instructed a valuation to be carried out on your home, please contact the Sales & Marketing Team on either 0300 304 5000 or email sales@ estuary.co.uk to arrange an appointment for them to visit your home to take property details and photographs to be used in the sales particulars and on property websites. Please ensure your home is tidy and presentable before we arrive in order to ensure that it is marketed in the best possible way. 6 estuary.co.uk sales@estuary.co.uk 0300 304 5000
Valuation Is Received, What Happens Next? Carrying out the valuation does not commit you to selling your home. Once we receive your valuation report we will arrange for you to sign a contract to agree the fee and provide details of your solicitor. Estuary Housing Association will exclusively market your property for a period of 8 weeks (or the nomination period stated in your Lease) from the time we receive your written confirmation that you wish to proceed with the sale of your property. We do this by advertising your property on our website and the appropriate HomeBuy Agent website for your area. If your property is outside of London we will also request nominations from the Help to Buy agent and send out sales particulars to these nominations and applicants from our own waiting list. Resale properties were originally sold under the Shared Ownership scheme which is an affordable home ownership scheme and therefore any purchaser must meet the affordable home ownership requirements for a resale home. The sale price is based on the valuation report and is not negotiable. All applicants will need to be approved for the Shared Ownership scheme and have a financial assessment, similar to the one you went through when you bought your home, carried out by one of our independent Financial Advisers. If more than one suitable applicant is found we will prioritise using the current allocation priority list and offer the property to the person who has the greatest need and best suits the scheme s criteria. 7
Resales What Happens Once An Approved Buyer Is Found? A holding deposit is taken from the successful purchaser and they are then issued with an offer letter giving them fourteen days to confirm to us that they wish to buy your home and provide us with their solicitor and lender details. Upon receipt of their acceptance of the offer to purchase the property we will issue instructions to all parties confirming the sale details; this is known as the Memorandum of Sale. At this stage your solicitor will be handling the legal work required to assign the Lease to the new buyer. The new buyer s solicitor will ensure the mortgage is in place ready for exchanging contracts, which is the time the sale becomes legally binding. We aim to do this within 4 weeks of the contracts being issued but this can be longer dependent upon how quickly the solicitors handle the transaction. What If There's No Buyer Within The Nomination Period? In the unlikely event that we have been unsuccessful in finding a buyer for your home in the nomination period in your Lease you will have the opportunity to instruct an estate agent to market your property, paying their fee for the services they provide. You can sell your current share or you may decide to sell 100% of your home. Please note you will still be liable to pay an administration fee to Estuary Housing Association. We will also continue to market your property until a buyer is found. 8 estuary.co.uk sales@estuary.co.uk 0300 304 5000
If you decide to instruct an estate agent to sell your home it must be at a price not less than the market value advised in the valuation. You cannot sell your property for more than the original valuation, it is important that you make your estate agent aware of this. If a buyer is found by the estate agent, the agent will need to provide us with the buyer s contact details and details of their solicitor. We will then issue instructions to all parties confirming the sale details; this is known as the Memorandum of Sale. At this stage your solicitor will be handling the legal work required to assign the Lease or freehold to the new buyer. The new buyer s solicitor will ensure the legal paperwork is in place ready for exchanging contracts. We aim to do this within 4 weeks of the contracts being issued but this can be longer dependent upon how quickly the solicitors handle the transaction. Finally Completion Day Arrives Please remember that you are selling direct to the buyer. It is therefore extremely important that you pass on keys and fobs, car park pass information and also to read the meters and advise your suppliers of the new owner to prevent any unnecessary utility bills. We will ask our Income Team to update your rent account to show the new owner of the property and any credit on your account will be refunded to you. You must remember to cancel your direct debit with the bank. We ll request payment of any outstanding rent, insurance and service charges. The marketing/nomination fee will also be requested at this point. All monies are requested via your solicitor and deducted from the sale proceeds. 9
Useful Information How Can I Make Sure That The Sale Progresses Quickly? It is advisable that you allow Estuary Housing Association to pass your contact details to the buyer so that you can arrange a mutually convenient time to view your property and to discuss possible moving dates. It is also important to liaise with your solicitors on a regular basis so that they can progress the sale. Once a buyer is found and we have instructed solicitors, we do not have any direct involvement with the sale, however we are happy to assist if required. Both your solicitor and the buyer s solicitor will agree an exchange and completion date. You will be given three months to buy a further share at the new price. The additional share that can be purchased is usually in multiples of 25%. This will vary upon Final Staircasing depending on the initial share purchased. What Happens If My Valuation Expires? The valuation is valid for 3 months. If your sale has not completed within this timeframe a new valuation will need to be carried out at a cost to yourself. This new valuation may change the market value of your home and this will be the new marketing price of your home. You will need a current valuation to complete the sale. Can I Sell 100% If I Only Own A Share? Yes, we call this back to back or simultaneous staircasing and sale. Once the initial period in which Estuary Housing Association markets your property has passed and we have not been successful in nominating a buyer you are free to market the property with an estate agent. If your buyer would prefer to purchase 100% and you decide to do this, you will have to increase your share to 100% and sell your home on the same day. This means you do not have to borrow extra money to pay for the extra share. Please let us know as soon as possible if you want to do this. On completion of the sale you will receive your share and Estuary Housing Association will receive its percentage share of the current full market value. 10 estuary.co.uk sales@estuary.co.uk 0300 304 5000
What If The Buyer Or Seller Does Not Proceed? Both buyer and seller have the right to withdraw from the sale before contracts of sale are exchanged however please note that as the current Leaseholder you are also responsible for EHA s legal fees incurred in a resale transaction. A 200 deposit is payable by the current Leaseholder on application, the total of which is subtracted from the 1.25%+VAT due to EHA on completion. In the event that you withdraw from the sale after solicitors have been instructed, this deposit will be forfeited and you will be responsible for EHA s legal fees. If the buyer withdraws we will continue to look for another buyer for your home and if it is over the nomination period we will allow you to go to an estate agent. What If I Have Made Improvements To My Home? When you sell your home the surveyor will not value the improvements separately. You will sell the share you own which will be a percentage of the full market value including improvements you have made. If you staircase or back to back staircase and sell, improvements are excluded. A buyer will only buy as seen and will not pay additional money on top of the current market value for work you may have done. How Can I Find Out More? Find Out More. We hope you found this guide useful. Remember that we are here to help you and aim to make the home buying process as stress free as possible. For further information please contact: Sales and Marketing Team Telephone: 0300 304 5000 Email: sales@estuary.co.uk www.estuary.co.uk 11
Tips For A Successful Viewing 1 Be Yourself Be warm and friendly as you show people around your home. Highlight the positive features and tell them what first attracted you to the property. Allow prospective purchasers to enter rooms first to see the full size of the rooms. Always end the viewing with the most impressive room but never oversell as this may put people off. 2 Spring Clean - Whatever the Season First impressions count and you do not want to put off a prospective buyer with lots of clutter. Ensure the property is clean and tidy; put away any toys or personal effects to create a spacious environment. 12 estuary.co.uk sales@estuary.co.uk 0300 304 5000
3 Carry Out Any Minor Repairs Carry out any minor repairs that you have been putting off. A minor repair could lead the potential buyer to think there is a bigger problem. If needed give the property a fresh coat of paint and re-grout tiles in the kitchen/bathroom. 4 Pets Remember that whilst your pets are an important part of your family not all potential buyers will be animal lovers. If possible ask a friend to take the dog for a walk, put the cat in the garden and ensure all indoor pets are in their cages during viewings. 5 Outside Space Whatever the weather, when conducting your viewings do not neglect your outside space. Whether it is a balcony or garden, ensure that it is tidy and well maintained. 6 Personal Safety Most importantly be aware of your own personal safety as you do not know the potential purchasers that you are inviting into your home. Where possible arrange to have a family member or friend present when holding viewings. If this is not possible tell someone when you are showing people around your property and arrange to telephone them when you have finished. Carry your mobile phone with you at all times and allow the purchaser to enter each room first so that your exit is clear. Never let a person into your home without a prior appointment. 13
Tips For A Successful Viewing Additional Information If you didn t pay Stamp Duty on your original purchase and sell 100%, you may be liable for Stamp Duty on the additional shares being sold. You should check with your solicitor as to how much you may be required to pay. Before selling your property you must ensure you re not in rent or mortgage arrears. Estuary Housing reserves the right to refuse the sale of your property if you are in arrears. If there are any existing or foreseeable financial difficulties, we advise you to speak to the Income Team on 0300 304 5000. You are fully responsible for maintaining your home and carrying out any repairs. This includes essential safety checks such as gas, pipe work, electrical and boiler checks. It is likely that a new buyer will request a current gas and electrical certificate. If you haven t had a recent inspection carried out, we recommend you arrange for this to be done. 14 estuary.co.uk sales@estuary.co.uk 0300 304 5000
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Registered Office: Estuary Housing Association Ltd 8th and 9th Floors, Maitland House, Warrior Square, Southend-on-Sea, Essex, SS1 2JY 0300 304 5000 sales@estuary.co.uk estuary.co.uk/resales Version 1-2017