Selling your home: Understanding the hidden costs
When you’re thinking of selling your house and buying somewhere new, you’ll need to budget for the sale of your existing property as well as the purchase of your next. You’ll no doubt have the deposit and stamp duty at the top of your budget priorities, but there are plenty of hidden costs to take care of to get the sale underway. These include:
• Estate Agents Fees – getting the property on the market
• Conveyancing Fees – going through the legal aspects of the sale
• Energy Performance Certificate – making sure you have all documentation in place for the buyer
• Removal Fees – costs incurred on moving day
Here we’ll take you through the basics and give an idea of how much you can expect to pay.
Costs associated with getting the property on the market
One of the first costs you’ll incur is the estate agents’ fees for selling. The exact fees you pay depend on the kind of contract you have and the type of agent you’re working with. For example, when choosing to go with a high-street estate agent the fee you pay will be done as a percentage of the selling price. In most instances this is around 1 – 3% at 20% but the amount will depend on whether you have a sole, joint-sole or multiple agency agreement. You can expect to pay lower fees if you work with just one agency on a sole-agency basis.
The fee can be anything from £99 to £1500. Just be conscious of deals looking too good to be true as at the very bottom end of the scale you’ll only pay for them to advertise your property. That means you’ll need to do everything else yourself, including showing people around the property and negotiating on price. If you pay more, you’ll get a similar service to the high-street agents.
There is the option of selling privately and completely cutting out any of the estate agents fees, but this can be quite an onerous and time-consuming route.
Key considerations when choosing how to put your property on the market:
- High Street Estate Agent: The average price of a house in the UK is £223,257. If your estate agent charges 2% you’ll end up paying them upwards of £5,358.17 incl VAT. The bigger the sale price, the higher the cost.
- Selling privately: You’ll save money, but you’ll need to do everything yourself. Not only does this include viewings and the negotiations should you get an offer, you’ll also need to make sure you get people in the door in the first place. It will be guaranteed to take up a lot of your time.
- Online Estate Agents: When you look at the price, it may be much more appealing than the percentage model from high-street estate agents. Just make sure you check the small print before you sign up to anything, making sure you fully understand the parameters of the service of how much you’ll be expected to do yourself.
Costs required for the legal sale of the property
In much the same way as when you first bought your property, you’ll have to hire a conveyancer or solicitor to deal with the legal aspects of selling your home. The fees you pay depend on the complexity of the sale and will be charged as either a flat fee or a percentage of the sale price. You can expect to pay between £850 and £1500.
Key considerations when choosing a conveyancer or solicitor:
- It makes sense to use the same solicitor or conveyancer for the sale and purchase of your new property (if you’re buying somewhere new). This could likely save you some money and it will also be much more convenient as you’ll have one point of contact throughout.
Costs associated with the documentation when selling
When you sell your home, prospective buyers require as much information as possible. It’s your responsibility to get a variety of pieces of documentation in order. These include the title deeds and forms that relate to what’s included in the sale and any other information related to the property. For most of these it’s just your time that’s required rather than cost.
However, you may need to pay to get an Energy Performance Certificate (EPC) in place. This is a document that gives a score for the energy efficiency of the property. A is the most efficient and G is the least, with the average rating in the UK around a D.
When selling, it’s your responsibility to get a domestic EPC from a government accredited domestic energy assessor, who’ll visit and asses the property and produce the certificate. Your estate agency should be able to advise you of who you can use locally. You’ll have the choice of different accredited providers, so the costs can vary, but according to uSwitch, you should expect to pay between £60 and £120+ VAT.
Key considerations when getting your documentation in place:
- Once a property has been assessed it will be recorded on the national register and will be valid for 10 years. This means if you moved into the property less than 10 years ago you should already have this in place and won’t need to pay for a new one.
Costs incurred on moving day
Once the sale has gone through, you’ll have a variety of things to sort out. You’ll also likely have incurred plenty of costs along the way. Choosing to go with a removal company to transport your possessions will also need to be budgeted for. It pays to shop around, and you can get it for as little as £300. However, if you have a lot of possessions and are moving a fair distance this could be over £1000. The day of the week affects how much your move will cost too. According to the Homeowner’s Alliance, most moves (41.57%) happen on a Friday with the least, excluding Sunday, happening on a Monday. Weekends are generally more expensive than weekdays as they’re more in demand, but it’s best to speak to a number of local companies and shop around for the best price.
When you’re selling your property, it pays to understand all the costs you’ll face so you can budget accordingly.
This guide to saving for a mortgage was produced in collaboration with L&C, the UK’s leading fee-free mortgage experts.