Selling a shared ownership property can seem daunting, but the process can be straightforward with the right knowledge and preparation. This comprehensive guide will walk you through the steps required to sell your shared ownership property. By understanding the rules, processes, and strategies involved, you can ensure a smooth sale while maximizing the return on your investment.
What is Shared Ownership?
Shared ownership is a scheme that allows individuals to buy a percentage of a property (typically between 25% and 75%) and pay rent on the remaining share. It is an affordable housing option designed to help people get on the property ladder who might not otherwise be able to afford a home. However, when you decide to move on, selling your shared ownership property requires a different approach compared to selling a full ownership property.
Key Considerations Before Selling
Before you start the process of selling your shared ownership property, there are several factors you need to consider. These will ensure that you are fully prepared and that the process goes as smoothly as possible.
1. Check the Lease Agreement
The first step in selling a shared ownership property is to thoroughly review the lease agreement. This document will outline the specific terms and conditions of the sale, including any restrictions or obligations you must follow when selling your share. Often, the housing association that co-owns the property will have the right to market the property before you can put it on the open market.
2. Contact the Housing Association
Once you’ve reviewed your lease, your next step is to contact the housing association that owns the remaining share of the property. They will inform you about the procedures for selling your share and will often conduct a valuation of your property. This valuation helps determine the current market value of your share, which is critical in setting the right selling price.
3. Get a Valuation
As mentioned above, a valuation is required before you can sell your property. The housing association typically arranges this, but it’s carried out by an independent surveyor. The surveyor will assess the value of your share and the property as a whole. This valuation is valid for a limited period, usually around three months, so make sure to act quickly once it’s completed.
Step-by-Step Process of Selling a Shared Ownership Property
Now that you have the preliminary steps out of the way, here is the step-by-step process for selling your shared ownership property.
Step 1: Offer the Property Back to the Housing Association
Most shared ownership schemes require that you first offer the property back to the housing association. This is known as the first refusal period, during which the housing association has a set amount of time (often 8 weeks) to find a buyer from their waiting list.
If the housing association finds a buyer, they will proceed with the sale on your behalf, saving you from having to market the property yourself. However, if they cannot find a buyer within the specified period, you are then free to sell the property on the open market.
Step 2: Staircasing (Optional)
Before listing your property, you might consider staircasing, which is the process of purchasing additional shares in the property. This allows you to own a larger percentage, or even 100%, of the property, which can make the sale more attractive to potential buyers. Staircasing can also increase the value of your property, allowing you to earn more from the sale.
However, staircasing comes with its own costs, such as legal fees and valuation expenses, so it’s essential to weigh the pros and cons before proceeding.
Step 3: Market the Property
If the housing association doesn’t find a buyer during the first refusal period, you can list the property on the open market. When marketing your shared ownership property, it’s important to be transparent about the nature of the sale and make it clear that it is a shared ownership property. Potential buyers need to understand how the scheme works and that they will need to go through an eligibility check with the housing association.
Here are some key platforms to list your shared ownership property:
- Online property portals such as Rightmove or Zoopla
- Estate agents experienced in shared ownership sales
- Social media and community boards for local marketing
Step 4: Find a Buyer
Once your property is on the market, you will need to find a buyer. As with any property sale, it’s important to highlight the key selling points of your home, such as its location, amenities, and condition. It may also help to work with an estate agent who has experience selling shared ownership properties, as they can guide potential buyers through the process.
Step 5: Complete the Sale
Once you’ve found a buyer, the sale process can begin. The buyer will need to go through the housing association’s eligibility check, which ensures they meet the criteria for purchasing a shared ownership property. This process is similar to when you first bought the property, and it includes income checks and proof of affordability.
Once the buyer passes the eligibility check, the legal process can proceed. You will need to work with a solicitor who is experienced in shared ownership sales to ensure all legal documents are in order. The buyer’s solicitor will also handle the paperwork related to purchasing the remaining share from the housing association.
Step 6: Transfer of Ownership
When all the legal steps are completed, and the buyer’s mortgage is approved, the transfer of ownership can take place. This is the final step where the property and remaining share are officially transferred to the buyer, and you will receive your share of the proceeds from the sale.
Common Challenges When Selling a Shared Ownership Property
Selling a shared ownership property can sometimes present unique challenges that are not encountered with traditional property sales. It’s important to be aware of these potential issues so you can navigate them effectively.
1. Limited Buyer Pool
One of the main challenges of selling a shared ownership property is that it appeals to a smaller pool of buyers. Not everyone qualifies for a shared ownership scheme, which can limit the number of potential buyers interested in your property. Working closely with the housing association and an experienced estate agent can help attract the right buyers.
2. Eligibility Checks
All buyers interested in purchasing a shared ownership property must go through the housing association’s eligibility check. This can slow down the process and sometimes disqualify potential buyers, so it’s essential to be patient and work closely with the housing association to ensure everything runs smoothly.
3. Valuation Discrepancies
The valuation process can sometimes result in discrepancies between what you think the property is worth and what the housing association’s surveyor determines. If you believe the valuation is too low, you have the right to challenge it, but this can delay the sale.
Tips for a Successful Shared Ownership Sale
To ensure a smooth and successful sale of your shared ownership property, follow these tips:
- Keep communication open with the housing association throughout the process.
- Price your property competitively, based on the surveyor’s valuation and market trends.
- Work with an estate agent who has experience in shared ownership sales.
- Prepare your home for sale by making any necessary repairs and presenting it in the best light possible.
Conclusion
Selling a shared ownership property requires careful planning, good communication with the housing association, and a clear understanding of the process. By following the steps outlined in this guide, you can navigate the sale smoothly and maximize your return. Whether you decide to staircase before selling or list the property on the open market, having a well-prepared approach will ensure a successful transaction.
