Selling any type of property is challenging. However, selling a shared ownership property is different as, in most cases, you won’t be selling it on the open market. Before you start your selling adventure, here are some things you should know and take into consideration.
A little bit about shared ownership properties
Shared Ownership is a government project envisioned to help first-time homebuyers with a less than average income buy shares in the home they rent. The home is rented from a housing association or local authority.
One of the most important things to know before investing in this type of property is that you can purchase between 25-75% of it. However, you can buy more over time and, in most cases, you can go up to 100%. You will pay a mortgage on the share you own plus a below-market-value rent on the remainder to the local authority or housing association.
Can you sell on the open market?
In case you’ve purchased 100% of your home and you’re the sole owner, you can sell it on the open market to whoever you want. There are even specific ways to sell to international buyers, too.
However, have in mind that there is usually a “nomination period”. This is a period, usually 8 – 12 weeks, during which the housing association will market your home. After it expires, you are free to sell it on the open market.
Also, when selling this type of property without local authority or housing association involved, make sure to find an experienced and successful real estate agent. They will know exactly where to market the home and ensure its sold as quickly as possible.
What to consider when selling a shared ownership property?
Selling a shared ownership property is a relatively straightforward process. Most local authorities and housing associations have pretty much the same processes. However, in case there are some differences, the best way to go is to get in touch with them personally.
Given that this process is specific, we’ve prepared a detailed guide. You’ll find out everything you need to know about this type of sale as well as what you should pay attention to the most.
Selling and moving costs
Before you start the process, you need to familiarize yourself with the different fees and costs that come with selling this type of property. Here are typical costs you’ll incur:
Valuation costs – This fee is used to cover a surveyor who will determine the value of the property.
Legal fees – Besides your own legal fees, you might have to pay for legal fees of the local authority or housing association. It all depends on your initial agreement.
Marketing fees – As the name says, this covers the costs of marketing your property on the portals. These charges are usually non-refundable.
EPC (Energy Performance Certificate) – This document is not needed if your property is less than 10 years old.
Leasehold Information Pack – Any potential buyer will get this pack which includes useful information about the property and lease terms.
Assignment fee – This fee is payable only in case the property sells, and it’s 1% of its total value. All the other charges listed need to be paid even in case the property is not sold.
Also, don’t forget that you’ll have to pay for moving costs, too. More importantly, you need to make sure to start organizing it on time. As soon as you know the date you’re expected to hand your keys and move out, get in touch with the moving company you’ve chosen and schedule your move. That will give you enough time to get ready properly.
Check your lease and get in touch with your housing association
When it comes to the procedure for selling your shared ownership home, you can find everything outlined in your lease agreement. Therefore, the first thing to do is to check it and familiarize yourself with details.
Your lease should contain details about who determines the value of the property. Also, you’ll find out if there are any selling restrictions and who is responsible for potential additional costs. You will also learn the specifics about the “nomination period” we mentioned in one of the previous sections.
The next thing to do is to get in touch with your local authority or housing association and notify them about wanting to sell. After that, the process can officially start.
Getting your home valued and EPC
The next step is to book a survey for property evaluation. You will need to find a qualified surveyor who will thoroughly check the property and determine its value. As mentioned, you’ll be the one handling the costs.
In many cases, local authorities and housing associations have a panel of surveyors to choose from. However, if you feel more comfortable, you can research and hire someone by yourself. Keep in mind that the valuation report is valid for 3 months.
Also, consider staging your home prior to the survey, which includes repairing any potential maintenance issues. You don’t want anything to negatively affect the survey and lower the value of your property.
Another document you’ll need is the Energy Performance Certificate. It shouldn’t be older than 10 years. If you don’t have one, you’ll have to find and hire an energy assessor.
Marketing your property and finding a buyer
Lastly, you’ll enter the nomination period during which the housing association will actively market your home. They reserve the right to do the advertising and even contact potential buyers who previously showed interest in buying a shared ownership property.
Keep in mind that the buyer needs to meet certain criteria to purchase this type of property. Usually, it’s a first-time homebuyer or someone with not enough funds to buy on the open market.
As there are often long waiting lists for these types of properties, you can expect your home to be sold during the nomination period. If they’re unable to find someone during the nomination period, you’ll be able to advertise the property yourself.
However, keep in mind that if you haven’t bought 100% of your home, the only way for you to sell it will be through a Shared Ownership scheme.
The bottom line
Now that you know the ins and out of selling a shared ownership property, we hope you feel confident about taking the next step to selling your home. We wish you the best of luck.