Should I Buy a House or a Flat?
The age-old debate between buying a flat (apartment) and a house continues to be somewhat of a dilemma for homeowners. Each option comes with...
Selling a property can be a complex process, so it’s essential to be aware of the costs involved to make informed decisions and maximise your return on investment. In this blog, we’ll break down the various costs of selling a house, from preparing your home for sale to getting ready for the big move. Let’s […]
29 September 2023
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Selling a property can be a complex process, so it’s essential to be aware of the costs involved to make informed decisions and maximise your return on investment. In this blog, we’ll break down the various costs of selling a house, from preparing your home for sale to getting ready for the big move.
Let’s dive in:
Table of Contents
Before you even consider putting your home on the market, it’s crucial to understand the potential costs involved with selling a house.
According tyo Compare My Move the cost of selling a house in 2023 is £6,224 for a house priced at £277,000.
Here’s a breakdown of the expenses you may encounter during your property-selling journey:
Preparing your home for sale:
Preparing your home for sale can not only entice more buyers but get you a better offer on your property. Consider investing in minor repairs, painting, and decluttering to enhance your property’s appeal and potentially increase its value. Costs will vary, but examples include:
Top tip: Redecorating yourself will take more time but will save you thousands. By investing in good quality paint and taking your time, room by room, this is a great way of saving money.
The biggest cost you are likely to be faced with is estate agent fees. Traditional estate agents typically charge a commission, usually 1%-3% of the final sale price, although on a lower-valued property, this may be a fixed fee, so the agent doesn’t lose out. Most agents work on a no-sale no fee basis, but many will look to tie you into a contract, so ensure you understand the terms and negotiate fees upfront and check if the fee is plus VAT or including VAT.
Top Tip: If you go with a sole agency or have a higher-value property, you can try to negotiate a better deal for exclusivity.
Online estate agents often offer lower fees than traditional ones but require more active involvement from you as the seller in terms of marketing and conducting viewings. Some do offer a full service, but make sure you fully understand what you are getting for your money.
Selling your property independently can save on estate agent fees, but it comes with its own set of responsibilities, including marketing, negotiations, and paperwork.
Top tip: If you have a property with a high volume of passers-by, this may be a good option to try initially, especially if you are in no rush to move.
According to Compare My Move the average conveyancing fees for a freehold property are £1,270. Conveyancing solicitors handle the legal aspects of the sale, including property searches and contracts. Their fees can vary, so request quotes from multiple solicitors to find the best deal. Many conveyancers take payment when the sale completes, but may ask for some payments upfront so always check the schedule of payment in advance.
Top tip: Different conveyancers will have different caseloads so before appointing a conveyancer it is a good idea to ask about the volume of work they currently have and who will be manageing your case to ensure you get your sale processed as quickly as possible.
Other legal costs include:
If you choose to sell your property through an auction, be prepared for auctioneer fees, which are typically a percentage of the sale price. This can be around 2.5% of the price and you may also need to pay for things such as advertising costs. If you sell through the modern method of auction, the auction itself takes place online, and the buyer will pay the associated costs.
If you have an existing mortgage and plan to move to a new property and move the existing mortgage with it, there may be some fees associated with porting your mortgage to the new home. It is always best to check with your lender about this.
If you are not planning to keep your existing mortgage product, you will likely be planning to take out a new product. When buying a new property, be aware of mortgage arrangement fees, valuation fees, and any other charges from your new lender.
An example of fees include:
If you’re paying off your existing mortgage early, before your current deal ends, as part of the sale, your lender may impose an early repayment charge. For example, if you have an early repayment charge of 3.5% and have a mortgage balance of £100,000, the early exit fee would be £3,500 and in many cases, this fee needs to be paid before the new product starts so make sure you have the funds to pay this in advance.
If you use a mortgage broker to find the best deal on your new mortgage, their services may come with fees, although some brokers work on a commission basis paid by lenders.
An EPC is legally required when selling a property and comes with a fee. It assesses the energy efficiency of your home and will cost somewhere between £60 and £120. An assessor will come out, and you will get a certificate that grades your home according to how energy efficient it is (with A being the highest and G the lowest). The report should also suggest ways in which to improve your rating together with associated costs.
Top tip: EPCs are valid for 10 years so always check if you have one before purchasing another!
Don’t forget to budget for the cost of hiring a removal company or renting a van if you plan to move your belongings to your new property. It is always tempting to save oney and hire a van yourself, but remember, this may result in more trips that you want to take and a lot more effort. Prices for removal companies vary but average around £1,000 for a 3 bedroom house travelling 50-100 miles.
Top tip: Sometimes removal companies will give discounts on advanced booking, so aim to get a confirmed completion date as early as possible and always get a few quotes.
If you live in Scotland, then yes. In Scotland, sellers are required to provide a Home Report to potential buyers. This includes a survey, an energy report, and a property questionnaire. According to RICS, a Home Report will cost between £585 and £820.
Depending on your country’s tax laws, you may be liable for Capital Gains tax on any profit made from selling your property. You’ll likely need to pay Capital Gains Tax on a house you’re selling if it’s inherited, a buy-to-let, a holiday property, business premises or land.
Top tip: Check the current thresholds and allowances in your region. You will not pay Capital Gains Tax if you have lived in the property as your main home for at least 18 months.
In conclusion, understanding the costs of selling a property is essential for a successful and financially savvy sale. Carefully consider each expense, obtain multiple quotes when necessary, ask questions and plan your budget accordingly. By being well-informed and prepared, you can navigate the property-selling process with confidence and ease.
From mortgages and insurance to viewings, offers, exchange and completion, our Buyers’ Guide will take you through everything, step by step, from start to finish.
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