A short guide to selling your shared ownership home
When you sell your home you usually have to give Hexagon Housing Association the chance to nominate a buyer. We run a waiting list and will do our best to find a buyer quickly. If we can’t you’re free to sell your home on the open market – usually after 2 months from receiving the valuation from you.
THE PRICE OF YOUR SHARE
When you sell your home you must get it valued. The price of your share will be a percentage of the full market value.
Your valuation must be done by one of the valuers on our panel – a list of these is enclosed. These firms are independent of Hexagon Housing Association, but understand how to do shared ownership valuations.
For example, if you own a 50% share and the full value of your home is £100,000 the sale price will be:
50% x £100,000 = £50,000
If you’ve made improvements that affect the value they’ll be valued separately. We deal with this later on in this guide.
If you live outside the areas covered by our valuers you may be able to use one of your choice – this is more sensible as they will know more about local values than our panel. You will need to give us the name, address and telephone number of the firm you want to use before you get the valuation. We will then talk to them about how to value a shared ownership home. If we have not talked to them before they do the valuation it will not be valid.
Why can’t I sell on the open market now?
Why can’t I sell my share to my friend?
You were helped to buy your home with public money, to help people in housing need. This money was provided by your local authority. One of the conditions of your authority providing the money was that the home would be offered in the future to the person with the greatest need. Just as you have benefited we now have an obligation to help other people. If you decide to sell your home it is a condition in your lease that we have the opportunity to find a buyer from our list.
GETTING THE VALUATION
First you’ll need to decide which of our panel valuers you want to use. You should ring them to arrange a time for them to visit – It’s a good idea to make it clear you own a shared ownership home. Always ask what they will charge – some are cheaper than others, some will be busier than others.
The valuer will have questions about your rent and service charges, as well as asking you what improvements you have made to your home. More of this later on in this guide. The valuer will send their report and the invoice directly to you.
WHY DO I NEED TO PAY?
Because you are selling your share- we are not selling ours. These are qualified valuers, unlike Estate Agents who usually set a price above market value so that there is room to negotiate. Once your value is set and you are selling- you do not need to negotiate the price, unless you want too. It is generally accepted by our buyers that the price set by the valuer is what they must pay. You always have the choice to drop your price if you want- this may be necessary if the market suddenly down turns.
Again, it is a condition in your lease that an Independent, qualified person sets the value.
You may have made improvements to your home. If they add to the value they will be assessed separately. The price of your share will take account of the full value of your improvements – so you don’t lose out. Improvements don’t include carpets, curtains or unfitted furniture. There’s also a good chance some things you’ve spent money on won’t add to the value. The valuer will use their professional opinion to decide.
The sale price is then a percentage share of the full value without improvements PLUS the full value of your improvements. This may seem complicated but it’s there to make sure you get the full value of your improvements back – not just a percentage.
An example may make this clearer:
1. The full value of your home is £101,000. This includes £1000 of improvements made by you – in this example a built-in wardrobe, extra kitchen units and a new front porch.
2. The value without your improvements is £100,000 – £101,000 minus the £1000 improvements. We call this the NET value.
3. If you own a 50% share, the sale price will be 50% of the NET value plus the full value of your improvements. In other words the sale price of your share is:
50% x £100,000 PLUS £1000 improvements – £51,000.
The valuer will list the improvements on the report so make sure you’re clear what you think should be included.The valuer will use their professional opinion to assess the value of your improvements – remember not all improvements add to the value!
Your buyer will “inherit” your improvements and will be able to get them valued separately when they come to sell in future – that way they don’t lose out either. In the meantime the value of the improvements may have changed for them due to wear and tear.
PROBLEMS WITH THE VALUER
The valuers on the panel are independent of Hexagon Housing Association and we have no influence over their valuations.
If you disagree with their valuation you can appeal to them directly to re-consider their report. Don’t send your report in to us until you’re happy with their figure.
If you’re not happy there may be evidence you can get together to support a higher or lower figure. Speak to the valuer and give them proof of recent sales of similar homes in the same locality. Estate agents are a good source – as well as local newspapers. Give the valuer a written appeal showing how your evidence supports your case. Do be aware however that the price an Estate Agent would set will be very different to the actual price a property will eventually sell at.
Evidence is the key – the valuer must be able to see their figure is wrong. They won’t just take your word for it! If you are still unhappy you can get another valuation from another panel valuer – but you’ll have to pay again.
If you are unhappy with the service the valuer has provided you can contact the valuer’s professional body, like the Royal Institute of Chartered Surveyors. The firm of valuers will be able to give you this information.
IF YOU WANT TO SELL
Send a copy of the report with the covering memo “I want to sell my share” included in this guide. Don’t send in the report unless you are happy with the valuation.
When we get your go-ahead we’ll prepare sales details and send them out to any suitable applicants on our waiting list. Interested people will get in touch with you to arrange a time to look at your home. We normally can do this within 5 working days of your valuation arriving.
We don’t want to swamp you with buyers, but we also don’t want to take ages to find you a suitable person. We will look at your home carefully and will try our best to send details to enough people on our list to give you around 10 to 15 people who want to see your home – but the response rate is hard to predict in advance! Sometimes homes are very popular and we get too many people interested. If this happens ring us and we will stop giving out your telephone number.
We hope with 10 to 15 people looking you will get around 5 people who actually want to buy your home. If the first person doesn’t want to go ahead after we have made a firm offer, you will have a couple of people in reserve – not a bad idea.
CHOOSING THE BUYER
The applicants must see your home and let us know if they are interested (usually) within 7 – 10 days – they will ring us up after seeing your home and will let us know.
We will use our allocations policy to allocate the home and will usually have the buyer identified within 24 hours of the closing date of your viewing.
Some of the applicants on our list will have homes of their own to sell. Whilst we know every seller wants a first time buyer, this won’t always be possible. If your buyer has a home to sell we will make sure they move quickly, or the offer will be withdrawn from them. If they’re an Hexagon lessee we will always try to find a first time buyer for their share.
Your lease will usually give us two months to find a buyer – but we’re normally much quicker. If we think we can’t find a buyer we’ll try to let you know as soon as possible. We can then agree you can sell on the open market.
INTERVIEWING THE BUYER
We interview the buyer (unless we offer your home to an existing leaseholder.) We will ask the buyer to provide us details of their financial and housing circumstances – to make sure they can afford your home.
Once we’ve checked the buyer’s financial details. We’ll tell you the sale can proceed and will instruct our solicitors. When the buyer has their mortgage and all the solicitors are happy exchange of contracts can take place and a completion date set.
PUSHING THE SALE THROUGH
Please note we will not chase your buyer once the solicitors have been instructed – this helps us keep our resale fee low. We will, however, try to sort out any problems – let us know if you need our help or advice.
SETTING A DEADLINE
When you’re selling your home you may want to set an exchange deadline. We can let the buyer know about the deadlines you give.
The deadlines should always be reasonable – say 8-12 weeks to exchange contracts from the date we interview them. You may want to set a longer deadline – it’s up to you.
After the interview, your buyer should instruct their own solicitors and will usually arrange for a survey of your home. If you don’t hear from them within 4 weeks with a survey date let us know and we will ring the buyer to find out what is happening.
Every sale is different. The time taken to sell a home is very hard to predict, but it is always best to be prepared for the worst. It will vary on a number of things – and many of these things will be out of your (and our) control. As a rough guide you could work on the following:
- If you are selling a flat you could expect to exchange contracts between 8 and 12 weeks after the buyer has been interviewed.
- If you’re selling a house things can move a bit faster, and between 6 and 10 weeks is quite normal.
You can usually help speed things up by asking your solicitor to get the deeds to your home from your mortgage lender as soon as possible after deciding to sell. Also get together any information on service charges, guarantees, insurance and so on and send copies to your solicitors as soon as you can. The more information they have on your home the better.
Remember the above timescales are for guidance only – some sales can take a few weeks, or many months if there are legal, survey or communication problems. As mentioned earlier, Hexagon do not chase your buyer once the solicitors have been instructed. We will, however, help to sort out any problems – let us know if you need our help or advice.
YOUR RELATIONSHIP WITH THE BUYER
The most successful sales are those which take place between a seller and buyer who talk to each other. There will always be problems selling a home and if you can settle these by talking together you will save time and trouble later on. If you’re not sure what is happening on your sale ring the buyer – they are in the best position to know. If you don’t get on with your buyer then you can “talk” to them through your solicitor, but this obviously takes longer. The solicitor may also charge you for the time they spend sorting out the problems.
Your valuation sets the price of your share and you cannot sell for more than this amount. When we send buyers to see your home we’ll have told them the price and you do not have to accept lower offers – unless you want to.
When the buyer goes ahead after we’ve interviewed them, they will usually get a valuation of their own from a building society. This may turn out to be lower than your valuation and means the building society will only lend a mortgage on the lower amount.
If this happens you and the buyer can negotiate if you want. In other words:
- You may agree to lower the price of your share to match their valuation.
- They may agree to put in savings to top up their mortgage to match your original price.
- You may agree to meet somewhere in the middle – you lower your price and they put in a bit extra.
The last one is the most common result.
If you can’t agree the sale will fall through. There’s no hard and fast advice on this – it depends on the difference between the two valuations, how much savings the buyer has, how dependent they are on getting the mortgage, and so on. If in doubt talk to us.
If the sale falls through within the 2 month period we will try to find another buyer. You are not automatically free to sell on the open market.
Make sure when you have sold you make a firm arrangement with the buyer on where they can collect your keys – you only want these handed over when your solicitors get the money for your home. It’s a good idea to leave these with your solicitor or a trusted friend or relative.
TROUBLE FINDING A BUYER
If no-one is interested in your home we may still be able to help. People join our list every day and we can carry out another quick mail out with a short deadline for a viewing. If we still can’t find a buyer we can give you permission to sell on the open market through an estate agent. We will give you advice if this happens
AN UP TO DATE VALUATION
Your valuation is valid for a time specified in your lease. It is normally three months from the date on the report.
After this you can get an updated report if you want – if you already have a buyer it’s up to you. You may decide to carry on with the existing value if you have found a buyer – they may pull out if you get another valuation and put the price up.
If the valuation report is out of date and you don’t have a buyer you will have to get it updated.
SELLING ON THE OPEN MARKET
We want to be reasonable. If we can’t find a buyer we’ll let you know as soon as we can. You can then choose to sell your share through an estate agent or you may be able to buy the remaining share from us and sell 100% on the open market. It depends on your lease.
Selling your share on the open market
If you sell your share on the open market we will want to interview your buyer to make sure they can afford the outgoings on shared ownership.
Staircasing to 100% and selling outright
If you staircase to 100% and simultaneously sell on the open market you shouldn’t have to raise the money for the remaining share – your solicitors can use the money the buyer gives you on completion to pay it. Clever!
If you have a valid valuation you staircase at this figure. If, however, your valuation is more than 3 months old we will want you to get an updated valuation from our panel valuer. This will almost always be the same as the price you’re selling for on the open market.
We won’t charge our resale fee if you sell this way, but you will have to pay estate agent’s fees if you use them.
The likely costs will be:
- Your valuer’s fee.
- Your own legal fees.
- Hexagon’s solicitors fees for the lease assignment – passing on the lease to the new buyer.
- Hexagon’s resale fee as determined in the lease.
If you need any help ring us on 0208 768 7977
PANEL OF SOLICITORS
Below is a list of approved solicitors for our schemes. Their prices will probably vary and you should get quotes before you choose which one to use.
| Direction Law31 Watling Street
| Tinklin Springall SolicitorsDevonshire House
Kent BR1 1TF
Tel: 020 8402 6222
|Cook Taylor Woodhouse68 High StreetEltham
London SE9 1BZ
Tel: 0208 859 0936