When selling houses, most of us think about the profit we expect or hope to realise. The goals we can fund, the dreams we can finance, the burden from which we can free ourselves in order to secure a better future or make our next move. Regardless, it is all too easy to underestimate the real cost involved.
In order to make the best decisions for your situation, it is imperative that you are aware of the expenses you will face – and how, perhaps, to reduce them so you can see more money in your bank account at the end of the process.
How Much Does it Cost to Sell a House?
It’s something few talk about: the real cost of selling a house. Here are some of the expenses you can expect:
1. Energy Performance Certificates (EPC)
£75 – £150 +VAT
The EPC is required when selling a house; it includes detailed information about the energy efficiency of your property, typical costs and suggestions for saving money. It must be completed by an accredited assessor. An EPC is valid for ten years. Although, if you have done work to improve the efficiency of your home, it may behoove you to order a new inspection done as to make your house more appealing to energy-conscious (and budget-conscious) buyers.
2. Estate Agent Fees
0.75% – 2.5% +VAT (of final sales price)
The reality is that most sales processes are led by estate agents (95% – 97%) and most use a ‘no sale no fee’ model. That is, if the house does not sell, you do not pay. If it does, the average fee for a sole agency is 1% – 1.8% +VAT of the final sale price.
A ‘sole agency’ agreement is when you select one estate agent to represent you and sell your house. You can also opt to use a multi-agent agreement. Here, you work with a number of different agents. The one who sells your house is the one who gets the commission. This can create a sense of healthy competition that motivates multiple people to work for you – or it can lead to a situation in which an agent accepts the first offer (which may be a low ball) just to secure the fee. Use caution. The fees for a multi-agency agreement are higher at about 2% – 3% +VAT.
Speaking of using caution… There are online and hybrid estate agents who charge a fixed fee that is paid upfront or as a deferred credit agreement. The fee must be paid – even if they do not sell your house. And according to research, that is quite likely. Their failure rate is 50% – meaning they fail to sell half of the homes they take on. But they’re taking 100% of those fees, which are usually £600 – £1500 with VAT. Home sellers often have to pay twice; once for the online/hybrid agent and then to a high street agent to actually make the sale.
3. Conveyancing and/or Solicitor Fees
£550 – £1000 including VAT
These fees can vary widely depending on the professional, as well as the complexity of the sale (e.g. is the property a leasehold with a mortgage? This is going to cost more for you as it is more work for the conveyancer). The good news here is that these fees are typically less for sellers than for buyers. A freehold with no mortgage, for example, is at the lower end of the price range we mentioned while, again, a leasehold with a mortgage, is at the higher end.
If you are both selling and buying, it can be more cost-effective and efficient to use the same conveyancing professional. While you can technically do the work yourself, it is highly recommended to use a licensed conveyancer or solicitor to ensure all legalities and technicalities are covered.
£250 – £4000 +VAT
Using a professional company can save you a great deal of time and aggravation. It will also cost you depending on the amount of items you need to move, the accessibility of your current home and your new home (or wherever they will be delivering your possessions), the distance between these points, whether you require storage and whether you require boxing-up services.
Doing it yourself can save you a little money, but you will also need to think about hiring a van or moving truck, fueling up, securing packing materials and obtaining ‘goods in transit’ insurance to protect yourself.
5. Preparing for Sale
Depending on the work that needs to be done to make your house ‘market ready,’ you could be looking at thousands to tens of thousands of pounds in repairs, upgrades, improvements, deep cleaning, removals and other expenses.
Another option is to work with a cash buyer who will purchase your property as is. This eliminates not only this last cost but the others we mentioned (excluding removals – you still have to pack up!).
Selling houses can be expensive. Consider a cash buyer to negate these costs.
If you like this post then do check out Moving House Checklist: 15 Tips for a Stress Free Move, Moving House Best Packing Tips and Hacks, and Top Tips: Packing your Home the Stress Free Way.