14 Dec | The Finances Behind Selling Your Home: What You Need to Know
Moving house is thought to be one of the most stressful things anyone can do, not only because it takes time and effort to lug everything from A to B, but because of all the budget issues, complicated calculations and other money-related factors involved. While property buyers like We Buy Any Home can get the job done quickly and simply, it’s important to stay on top of costs, calculations and other money-related factors – so here’s everything you need to know about the finances behind selling your home.
Use an Estate Agent or Sell the Property Yourself?
When selling up, the first thing you should ask yourself is whether you want to use an estate agent, or sell the property yourself? Of course, if you use an estate agent, the process will be more expensive but the agent will be responsible for advertising, arranging viewings, showing potential buyers around the house and negotiating a sale price. If you wish to find a buyer yourself, you will save money but you’ll need to make all the above arrangements and deal with any problems along the way – not ideal if you’ve a hectic lifestyle already and are short of time.
Nearly all estate agents calculate their fees as a percentage of the final selling price (usually between 1 ½ and 2 ½ per cent). This is known as the rate of commission which may or may not include extras such as advertising costs, costs of preparing details of the house including photographs, a For Sale board and VAT. Always find out what’s included in the percentage fee before signing a legally binding contract with an agent, or you might find yourself paying out more than you expected.
Sale by Tender Process:
Just to complicate things even more, it is also possible for estate agents to sell a property using a tender process. Typically, buyers will view the property at an open day and make an offer through a sealed bid. The buyer will then usually agree to pay the agent’s fee as part of the tender process on completion of the sale. As the homeowner, you will either be charged only a small marketing fee or no fee at all. This can be an attractive option for those looking to make a quick and easy sale, but make sure you understand all details of the tender pack which should include information about the sale, the agreement to make an offer by tender and pay the agent’s fee, the bid form, frequently asked questions and a key features document setting out the pros and cons of the process.
Pricing Your Property:
If you are selling your house via an estate agent, that agent should do all they can to obtain the best possible price for you. While they might liaise with you, their experience in the property market should give them a pretty accurate idea of what your house will go for.
There’s a lot of government information online about making and accepting offers, but essentially, buyers must make offers through the estate agent if your home is being sold by one. They can do so verbally (over the phone or in person) or in writing. An offer isn’t legally binding in England or Wales until contracts are exchanged.
If you’re selling your home privately, it’s important to estimate the price of your property correctly so you get the best possible return on your investment. You can do this by arranging a free valuation with an estate agent or by simply carrying out research of how much similar properties are going for in the local area. You can find this information out online, in local newspapers/magazines or by looking in an estate agent’s window. Before setting a price, don’t forget to include the cost of any maintenance or repairs that might help you sell the property quicker.
It’s important to understand the finances behind selling your home, so be sure to get to grips with the numbers before selling.