If you are thinking about selling a house, then the cost of purchasing your next property is an important consideration. Particularly if you are upgrading and buying a more expensive property. For example, you may need to find additional capital from your savings to add to the sales price of your current home. Alternatively, you might need to borrow more and plan for how and when you will repay a higher mortgage.
What is often overlooked, however, is the cost of actually selling your current home in the first place. This can be higher than you might imagine because the costs tend to be ‘swallowed up’ as a part of the overall moving expenditure and once you are no longer a first time buyer, incentives like shared ownership, help to buy schemes and reduced stamp duty may no longer be applicable.
Regardless of whether you are upsizing, downsizing, moving to rented accommodation or buying a similar property in another location, failing to consider all of the costs of selling your home can be a costly mistake and leave you in debt, needing to borrow more money than you had planned or unable to buy a particular property.
So, what are the fees involved when selling your home?
An essential part of selling your property is letting potential buyers know that your home is on the market in the first place. Enter your estate agent, who will provide a valuation to guide you on the asking price and market your property in store and online via their own website and one or both of the big two property portals; Rightmove and Zoopla.
The cost of this marketing effort is generally included in the overall estate agent’s fees payable once the sale of your home is complete. The fee is generally deducted at source by your conveyancer once your mortgage lender has transferred the funds, although if there is any shortfall you will need to make a separate payment.
Estate agent fees can vary quite dramatically even between local agents but will generally be around 1-4% of the sale price. The Property Ombudsman requires this fee to be inclusive of VAT, but if this is not explicit in the quote from your agent then do always double check so that you don’t find yourself hit with an unexpected 20% increase. It is always worth asking if an estate agent can do you a better deal on fees, particularly if you are offering them exclusivity on the sale and the property is in a popular location which always has interested buyers.
Another option can be to use an agent who charges an upfront rather than commission-based fee, so you know exactly what the fee will be from the start. However, this does usually mean that you will need to pay the fee in advance, which makes it harder to move to a different estate agent if your home is taking time to sell and can leave you out of pocket for longer. In recent years, online and hybrid estate agents have also proven to be a more cost-effective option than traditional estate agents.
Energy Performance Certification
In England, Wales and Northern Ireland it is a legal requirement for vendors and landlords to produce an energy performance certificate (EPC) for potential buyers or tenants. An EPC shows a building’s energy efficiency rating and environmental impact rating and will consider aspects like loft cavity and wall insulation to help inform buyers about how much they can expect to pay for the running costs of their new home, such as heating, in the years to come. Slightly different rules apply in Scotland.
The EPC must be conducted by an accredited assessor and will cost in the region of £60-120. You can find your own assessor, but your estate agent will generally have someone they use regularly and can recommend who will expedite the process even if it costs a little more.
If your house has been sold or rented within the past 10 years, the previous EPC may still be valid. You can check via the Ministry of Housing, Communities and Local Government website.
When the legal ownership of a property is transferred from one party to another, or a remortgage or lease extension takes place, there needs to be a formal conveyancing process.
For the sale of a property, a conveyancer (either a solicitor or a licensed conveyancer), will need to prepare legal documents for the sale, liaise with Land Registry, undertake local searches, produce contracts of sale and transfer money between the buyer and vendor. This process comes at a cost, generally a set fee of around £500-1,800, although some conveyancers charge by the hour, or with a percentage-based conveyancing fee.
The cost of moving your belongings from your old house to your new home is another fee which needs to be considered when you decide to put your home on the market.
Depending on the size of the property and your own personal circumstances you might find that you can take a DIY approach and hire a van on an hourly or daily rate.
If you will need help to move your belongings, the cost of doing so can vary greatly depending on the service you choose. There are many informal options locally and nationally to hire a ‘man and a van’ to give you some assistance. However, if you have a number of fragile or valuable belongings, you may wish to use a professional removals company who will have expertise, specialist equipment and the necessary public liability insurance to ensure you are properly recompensed in case of any damages. These companies will also offer the option to come in and pack up your belongings for you in their own boxes so you don’t have to lift a finger, although of course this will be reflected in their fee.
Removal costs vary hugely depending on your location, the size of property (and therefore the contents) the distance of the move and level of service required and can be anything from £50 for van rental only to upwards of £1000, so make sure you know what kind of removals service you will need and do your research as early as possible to avoid an unexpected fee.
Depending on the timescales for the move and any work you are undertaking at your new property, you might also need to factor in the cost of a storage unit too.
Thanks for stopping by today, I hope you’ve enjoyed this post.