Published: 15/03/2017 By JG
If you’re wondering what ‘Sales Progression’ is, then don’t worry – you’re not alone.
Much of what an Estate Agent does isn’t widely understood. To the public, an Estate Agent is just a company that lists your property for sale and shows potential buyers around your property.
But wait, there’s got to be more to it, right? .....Correct!
Finding buyers is most often not the hardest part of what an Estate Agent does, this is just the beginning; but is that is the part that is visible to the outside world.
Sales progression is the process of getting the property from the ‘Under Offer’ stage to ‘Completion’.
Let’s look under the bonnet at Sales Progression and what Estate Agents actually do and why you might want to use one.
1. ‘ Under Offer’ – once a potential Buyer (sometimes called the ‘Applicant’) puts in an offer, which is agreed by the Seller (often referred to as the ‘Vendor’), the status of the property becomes ‘Under Offer’. This is where sales progression begins for the Estate Agent.
At this point the Estate Agent will need to take the following actions:
- Establish that the Applicant is in a position to proceed with the purchase of the property. If the purchase is being funded with a mortgage, then the Estate Agent would usually ask to Applicant to produce evidence that a mortgage has been agreed in principal. This is provided by either the Applicant directly, or by the Applicant’s Mortgage Broker. A deposit would usually be required to part fund the purchase, and therefore the Estate Agent would usually ask the Applicant to provide evidence of their deposit at this stage also.
- In order to fulfil compliance requirements with regards to ‘Anti Money Laundering’ legislation, the Estate Agent will need to verify the identity of the Applicant.
- The Agent will need to gather the details of the Solicitor acting on behalf of the Applicant and the details of the Solicitor acting on behalf of the Seller.
2. At this stage the Estate Agent will send out the ‘Memorandum Of Sale’ which is a document that contains the details of the sale/purchase, and the details of all the parties involved in the transaction – the Applicant, the Applicant’s Solicitor, the Seller, and the Seller’s Solicitor. This document is then sent to each of these parties as notification that the sale process is beginning and it gives both of the Solicitors the information they need to begin the ‘Conveyance’.
3. ‘Mortgage valuation’ or a ‘Survey’. If the purchase relies on a mortgage, then the Lender will send out a Surveyor to confirm the valuation of the property. The Applicant would pay a fee for a ‘Valuation Report’ and often a fee to the Broker for their work in helping to line up a suitable mortgage. For added security and peace of mind for the Applicant, they may choose to get a more detailed survey done. A ‘Homebuyers Report’ will provide much more detail than the valuation report and will
find highlight any potential problems with the property. The most comprehensive survey that is done is a ‘Full Building Survey’ which is often beyond the scope of most residential property purchases.
4. ‘Conveyancing’. This is the term given to the legal process that takes place in transferring the title of a property through to ‘Exchange’ and ‘Completion’. This is carried out by Solicitors, not by the Agent. However it falls to the Agent to stay in touch with all parties within ‘the chain’ to ensure that things are moving along as they should be. There are several steps in a conveyance that will include the following:
- Issue of draft contracts
- Completion of protocol documents (this confirms the fittings, fixtures, contents, and inclusions that come with the sale of the property)
- Searches. This is carried out by the Applicant’s Solicitor to establish any potential issues the property might face. Several separate searches are carried out which include ‘local authority’, ‘coal mining’ ‘water’, and ‘contamination’. When the searches are complete, this often raises enquiries from the Applicant’s Solicitor which are sent to the Seller’s Solicitor for clarification. This process is often the lengthiest part of the transaction as correspondence goes back and forth between Solicitors before each party is satisfied.
4. Managing ‘the chain’. ‘The chain’ refers to the string of sales that are required to go through in order for your sale to go through. Unless the property is being purchased by a First Time Buyer, or an Investor, then there will usually be a chain. The length of the chain can vary, but the longer the chain, the more people are involved, the more variables there are and the higher the chance of there being a problem along the way. Chains of 10 aren’t unheard of – 10 buyers, 10 sellers, 20 Solicitors, and possibly 10 Brokers – that’s a lot of people to manage! A good Estate Agent manages this process. Long chains require a great deal of skill holding them together when problems arise.
5. ‘Exchange’. This is the shortened term for ‘Exchange of Contracts’. This is where the conveyance has been completed and each party have signed the legal documents to transfer the title of the property. The Applicant is often required to transfer a deposit for the purchase to their Solicitor at this point. Once exchange has happened, the sale has legally taken effect.
6. ‘Completion’. This often takes place a week after exchange to allow for the mortgage funds to be drawn down from the Lender and the exchange of funds between Solicitors. Once this has happened the Buyer will be advised to collect the keys from the Agent and the process is complete.
As you can see, there is much more to an Estate Agents role in the sale process than first meets the eye!
If you need someone to help you sell your property in Leeds, give us a call today. Our experienced and skilled team are experts in completing sales affordably, smoothly, and within convenient timescales.