What is a resale?
As a shared owner, you can choose to sell the share in your home at any time. The process of selling your share to another person, is known as a resale.
Nomination period
Most shared ownership leases have a clause known as a nomination period, which means that before you can sell your share on the open market, we have the right to market your property for a fixed amount of time, to try and find another buyer who is eligible for shared ownership. The nomination period is usually between 4 to 8 weeks, depending on what is written in your specific lease agreement. If we find a replacement buyer within the nomination period, the applicant will be financially assessed, and we will check they meet the eligibility criteria for shared ownership before they can buy.
What happens if we do not find a buyer or release you from the nomination period?
If we are unable to find a replacement buyer during the nomination period or choose to release you early from the nomination period, you are free to sell your share on the open market. If you choose to instruct an estate agent, you will be responsible for any related fees and costs. You also have the option to market 100% of your home and find a buyer, which is referred to as a back-to-back sale. This means you would staircase* to 100% and sell on 100% of the property to a new buyer in a simultaneous transaction. The funds from the new buyer would cover the cost for you to staircasing to 100%. You should seek advice from your solicitor and notify us if you wish to explore this option. There are likely be additional legal costs to cover the more detailed transaction.
*Staircase or staircasing is when you buy additional shares in your home.
What are the costs of selling my home?
- A valuation – you will need to pay for your home to be inspected and valued by a qualified Royal Institute of Chartered Surveyors (RICS) valuer. A valuation only last three months so you will also be responsible for obtaining a new valuation if you have not sold your home in this period.
- Legal fees – both yourself and South Liverpool Homes will need to instruct solicitors to manage the legal aspects of selling your share. You will be responsible for paying your fees.
- An admin fee – there is a £150.00 administrative fee for work involved to process the sale of your share. This will increase to £300.00 if we market your home and find you a buyer. These fees are significantly less than what you would be charged by an estate agent.
- You will need to pay for an Energy Performance Certificate (EPC) if there is not a valid one for your home.
- You will be responsible for costs associated with buying another property and your removal costs.
Home improvements
If you have made significant home improvements, such as building an extension or a conservatory, and you believe the value of your home could have increased as a direct result of the specific improvements, you should disclose this upfront so it can be considered as part of the RICS valuation. You will need to ask your valuer to provide two valuations – their expert opinion of the value of your home with and without the benefit of the improvements. The market price will depend on if we gave you permission to make home improvements.
What else do you need to know?
- All legal owners of the property will need to confirm their intention to sell their home.
- Throughout the sale process all rent and service charge payments must be maintained.
- You will need to instruct a solicitor to oversee the legal aspects of selling your home. We can give you the contact details of solicitors who are familiar with shared ownership resales.
The process - step by step
We guide you through the process, from initial enquiry to completion.
Firstly, you need to contact SLH and let us know you are interested in selling your share. We will check the terms of your lease and check there is no rent or service charge arrears on your account. We will also check the share percentage that you currently own. We will confirm with you if we intend to market your home or allow you to market it yourself.
You will need to instruct a Royal Institute of Chartered Surveyors (RICS valuer and pay for the valuation of your home. We can assist you with arranging a valuation. The valuer will need to inspect your home.
If you have carried out home improvements, you need to advise us and the valuer as this can impact on the market value at which your home will be sold.
It is important to understand that a RICS valuation is usually only valid for a period of three months. When it expires, your valuer may be willing to extend it for a further period, or they may say there is a further cost to provide a new valuation. If you do not complete your sale within three months, there is a possibility that the value of your home could have changed – values can go up or down. It is important to try and be as organised as you can, to complete the sale quickly.
The valuation must include three comparable sales in for similar type homes in the same area.
Once the valuation is completed, we will need to approve it. We reserve the right to challenge the valuation if it does not meet our expectations of the current market value. Once approved this is the price your home will be advertised. We cannot accept any offers less than market value. Once agreed we will confirm the price of your share.
We will confirm the memorandum of sale with you. These are the terms in which we agree the sale of your home and the costs involved.
At this stage your home will be advertised for sale. Interested applicants will want to view your home.
All potential buyers, either identified by us if we exercise the nomination period, or if you market your home yourself, will need to be assessed so we can check the home is affordable for them and they meet the eligibility criteria for shared ownership.
The prospective buyer will be approved if they pass all the eligibility criteria for shared ownership. The buyer will pay a reservation fee as commitment to proceed with the sale. At this point your home will be taken off the market.
Usually at this stage all parties involved in the sale will instruct their own solicitors to act on the sale process. Solicitors will contact each other to start the legal aspects of the sale and help to coordinate all legal matters.
As the sale progresses a completion date will be agreed for funds to be transferred between parties. The sale will complete when our solicitor confirms all funds have been deposited and the exchange can take place.