‘We saved thousands selling our home online’: Could you ditch the estate agent and sell your property yourself?
Selling your home is a painful, long-winded and expensive process.
It’s not uncommon for it to take upwards of six months to move, while the costs can be so high that it is understandable why moving home often features near the top of surveys listing the ‘most stressful’ life events, just behind bereavement and divorce.
And yet, thousands of people will move this year, with most looking no further than their local estate agent to facilitate the sale. But is this really the best option? Here we run through the options facing house sellers looking to trim costs.
High street estate agents
High street estate agents typically charge around 2 per cent plus VAT to market a sale and for that they will arrange viewings and manage negotiations.
However the rate varies, usually from 1 per cent to 3 per cent, depending on the property’s value, whether it’s registered with one or more estate agents, local competition among agents and a willingness to haggle.
This means the seller would hand over from £4,800 if they sold their home for £200,000, paying 2 per cent commission.
High street estate agents point out that they have a wealth of local experience and use a wide variety of marketing avenues, offering a level of service that online-only agents cannot match.
Bob Scarff, MD of Countrywide Estate Agents explains: ‘A high-street estate agent will have locally-based people who can visit the homeowner at their convenience and provide accurate up-to-date advice on local market conditions and the right asking price at which to pitch the property.
‘An agent that relies on simply “introducing” viewers cannot expose a property fully to the market and their client can therefore never be certain that they have achieved the best price from the best buyer.’
Adam Hay, director of online estate agent Hatched, disagrees. He claims that his customers get a complete estate agency service at a fraction of the cost.
‘With over 90 per cent of house sale enquiries now coming via the internet, there’s simply no longer a need for estate agents to have expensive high street offices in multiple locations, company cars, and newspaper adverts.’
Online estate agents
Online agents may not be able to attend viewings or have local knowledge, but they have lower overheads, meaning they are cheaper than high-street operations.
For instance, Hatched offers three price structures for its services, with the cheapest being an up-front fee of £225 and an extra £225 on completion, giving a total cost of £540 including VAT. For this the vendor gets a professional evaluation, photos and a floor plan, plus marketing on Rightmove, Prime Location and other home-sale websites.
A for-sale board will cost an extra £36. Even if you find a high street estate agent that charges 1.5 per cent in commission, you’d still save around £3,000 based on a property sale price of £200,000.
The lack of a high street presence is not a stumbling block according to Richard Tuck, director of online estate agent Turtle Homes.
He says: ‘If someone wants to sell their home, they are far more likely to go online to one of the big property sites such as Rightmove or Zoopla than to go door-to-door around the high-street agents. And we are able to sell properties without the huge fees imposed by the traditional firms.’
Being able to market your home on websites such as Rightmove, Prime Location or Zoopla is a real plus as their reach is huge. Rightmove alone reported that it attracted 1.25billion page views in April this year, twice as many as it did during the same period in 2012.
Anyone planning to use an online estate agent should check that it is a member of the Property Ombudsman or the Surveyors Ombudsman Service. That way if there is a dispute the vendor can take the matter to an independent adjudicator.
It is possible to sell a property without using either a traditional or online estate agent. The process may take a little longer, but if all goes well the savings can be considerable.
Of course, the DIY route is likely to take a lot of time and effort as the seller will have to grapple with all manner of people traipsing through their home as well as riding the negotiation and post-sale roller coaster.
Despite being the cheapest option, DIY sellers will still need to spend some cash. Firstly, you’ll need to buy a for-sale sign, which you can obtain from firms such as Cheapmove.co.uk and Homesonsale.co.uk, typically for around £10 to £35.
Of course, a board will only attract passing traffic, so you’ll need to advertise in local newspapers and online. Unfortunately, not all advertising channels are open to the DIY sellers. Major players Rightmove, Prime Location and Zoopla only deal with professional estate agents, not private property sellers.
Online property sites
Online property sites will advertise a private sale for a fee depending on the level of service required. For example, Houseweb has three service options, costing from £47, £129 or £199 including VAT. Click2move currently charges £20 (down from £90), with upgrades and for-sale boards available for an additional premium.
Firms like these are set to be given new freedoms to operate, as a result of a change in the law. Property companies that introduce buyers and sellers through marketing, but are not estate agents, won’t be covered by the Enterprise and Regulatory Reform Act when it is passed into law later this year.
This should make it cheaper for them to operate, which should be reflected in the fees they charge customers.
Auction sales are another avenue open to vendors, particularly if the property is in need of a lot of repair or modernising. This is commonly the case in relation to inherited or very unusual properties, such as converted windmills or even lighthouses.
Auctions offer a fast-track way to offload a property, with the keys changing hands within a month of the auction. For this reason, auctioneers are popular with property developers.
They tend to charge up to 3% commission on sales, plus a registration fee, typically ranging from £500 to more than £3,000 excluding VAT. Fees and commissions will depend on the value of the property, marketing exposure and other services offered.
HOW EACH METHOD OF SELLING YOUR HOME STACKS UP
|Property sale value: £200,000||Property sale value: £500,000|
|High street estate agents:||Total fee: Including VAT||Total fee: Including VAT|
|Online estate agents:||Savings on 2% estate agent fees:||Savings on 2% estate agent fees:|
|Option 1 – £225 upfront; £225 on completion||£540||£4,260||£540||£11,460|
|Option 2 – £125 upfront; 0.25% on completion||£750||£4,050||£1,650||£10,350|
|Option 3 – 0.5% commission||£1,200||£3,600||£3,000||£9,000|
|Option 1 – £395 upfront||£474||£4,326||£474||£11,526|
|Option 2 – £199 upfront; £399 upon completion||£718||£4,082||£718||£11,282|
|Option 3 – £99 per month until completion (6mths)||£713||£4,087||£713||£11,287|
|Option 4 – £49 upfront; £950 upon completion||£1,199||£3,601||£1,199||£10,801|
|Option 1 – £249 upfront||£299||£4,501||£299||£11,701|
|Option 2 – £199 upfront; £399 on completion||£718||£4,082||£718||£11,282|
|Option 3 – £49 upfront; £799 on completion||£1,018||£3,782||£1,018||£10,982|
|Biggest saving: 2% commission versus online||£4,501||£11,701|