The costs of buying a property are often covered and explained by lenders, advisors and agents. However, there are also costs associated with selling your property.
We’ve collected together the most substantial costs below, so you have a clearer picture of what you need to consider with your selling property.
One of the first things to do when deciding whether you are going to sell or not is to decide how you can improve your property to increase its marketability. This can mean more healthy bids from buyer, as well as allowing you to sell the property more quickly. However, larger investments may not be worth it. Read up about how to improve your property for sale here.
2. Selling fees
Regardless of how you decide to sell your property, there will always be costs associated with it. The three most common ways are as follows:
a. Estate agents
Agents will take a percentage of the final bid offer as their fee. Depending on the area and location and the estate agents pricing strategy, this can typically range from 1.0% – 3.0%. Sometimes agents also offer various percentages based on achieved resale values. The national average estate agent commission is 1.8% (+VAT) of the final sale price. A good rule of thumb is to aim for close to 1%-2%, or perhaps even less if your property is a particularly attractive or expensive one.
Auctions can often see properties sell very quickly. However, sales by private owners are not common. Auctions are more commonly associated with landlords, portfolio builders and development companies. There are two main costs involved with the sale of a property at auction. Firstly, the fixed costs. These cost occur whether you sell or not. They include auctioneer’s admin and brochure costs, as well as the costs of your solicitor’s time, as they may have to be present once the property is sold. Typically, the variable costs at auction (namely the cost if it does sell) is around 2.5%. Note that this is higher than most estate agents.
c. Self sale
You may think that selling your property yourself may make a lot of financial sense. However, this is an option for more adventurous sellers. The costs involved in marketing, negotiation and administration, as well as the restrictions on your time may not be worthwhile. The only cost that selling yourself removes is commission, so establish whether you think it’s worth your time and effort before you get stuck in yourself.
3. Energy performance certificate
EPCs can cost up to £120. As with anything, it’s worth shopping around to reduce the costs. It is also sensible to check out the EPC Register to see which register energy performance inspectors are in your area. As a rule of thumb, an estate agent will often be the most expensive option, as opposed to a separate EPC contractor.
Shopping around for the best legal package is sensible, as this can save you thousands of pounds. Fixed-fee conveyancing is often a good choice if the value of the property is high, and you will be more aware of the final costs. Solicitors and conveyancers also make a hefty profit on things like photocopying and postage. Check carefully all the smaller sums.
5. Your next property
Now you are looking to move into a new house. There are substantial fixed and variable costs associated with buying, so be sure to make yourself aware of those too.