How to sell a house
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Large numbers of property sellers are abandoning the traditional services provided by estate agents and marketing their homes directly to house-hunters via a growing number of websites.
As house prices have continued to rise, so has the commission sliced off by estate agents on each sale. This has frustrated many sellers, especially when much of the initial marketing of properties is done cheaply through online portals such as zoopla.co.uk and rightmove.co.uk.
But vendors now have the choice of using one of over 50 websites that market properties privately to buyers, potentially saving them fees of up to 3 per cent of the sale price. A combination of private-sale sites and low-cost online agents now accounts for about 5 per cent of completed sales, according to the Royal Institute of Chartered Surveyors.
The main attraction is saving money. If you sell for £200,000 through an agent charging 2 per cent you will pay them £4,700 in fees and VAT. Do it yourself and the maximum outlay will be just a few hundred pounds.
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Prepare for a sale
Many people are put off selling their homes privately because they worry that they won’t value it accurately. But there is a lot of information available to help sellers set prices appropriately. The Land Registry website tells you how much other properties on your street have sold for. Other places to find recent sale prices include mouseprice.co.uk and nethouseprices.com. Websites such as Zoopla and Rightmove can also help you to discover asking prices for homes in your postcodes.
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Experts recommend uploading a floor plan as part of your property’s details. You can buy floor-plan software or download it for free for a trial period. If you’re selling a leasehold property, you will need to provide proof of your buildings insurance, service charges and ground rent accounts for the past three year – plus details of any disputes between leaseholders and landlords.
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Consider the traditional route
The most common way to sell your property is still through an estate agent, and before you decide to sell yourself, do at least talk to a traditional agent as it is possible to haggle over fees.
One way to reduce fees is to play agents off against each other; for example, by seeing how low one agent will go and asking another to match it. Then there is also the sliding-scale tactic, where sellers can pay the full rate if agents achieve the asking price, but can reduce the commission accordingly if the house sells for less. Similarly, you can “incentivise” the agent, where you decide on your target price and offer a percentage of the added value if the agent gets anything more.
Sometimes, agents setting up in an area will offer promotional rates to attract business.
Agents argue that selling a house is only a small part of the service they offer. They will also take charge of the offer, check the chain and liaise with lawyers. They will also try to establish whether potential buyers are who they say they are, and whether they can really afford to buy your house.
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Advertise on a private-sale website
You don’t have to use an estate agent. Some private sellers succeed in attracting passers-by on the strength of a home-made board alone, while others attract buyers by leafleting houses.
But you can also opt to advertise your property on a free site such as PropertySell or Tepilo, the site run by property expert Sarah Beeny. These websites cut out estate agents and letting agents, allowing vendors to upload photos and descriptions for free, or very small sums of money. The commission saved can potentially be passed to a buyer or tenant as a discount. It is also possible that you will have less competition as a buyer if the properties are not being marketed outside the site. Other private sale websites include propertybroker.co.uk or thehousesale.co.uk.
The drawback of these sites, however, can be that they will not feature on the major portals such as Rightmove, which has a vast share of search traffic for property.
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Use an online estate agent
If you’re not comfortable selling your house privately, you could still save money by using an online estate agent, such as hatched.co.uk or housesimple.co.uk. These sites usually charge a lower commission that high-street estate agents but will still list your home on property portals such as rightmove.co.uk.
For example, eMoov will sell your property for a flat fee of £395 plus VAT, while Hatched.co.uk, charges £225 upfront plus £225 on completion. For that, an agent will come to your house to carry out an inspection and take photographs, then provide a valuation report.
You can advertise with an agent at the same time as marketing your home privately. But you will need to get the right contract from your agent. This should be for sole agency rights – meaning you won’t have to pay them if you sell it privately. If it is for sole selling rights, you will have to pay the agent no matter who sells it.
Many agents will try to bill the seller in any case, but if they have a contract clause in place and the agent cannot prove they introduced the buyer, then the seller owes nothing because the agent did not sell the property.
“For just a few hundred pounds, online estate agents will take photography, create floor plans, advise on price and market the property on all the main property portals including Rightmove and Zoopla,” says Alex Gosling, director at housesimple.co.uk. “Sellers can have as much or as little involvement in the selling process as they want to have or are happy to pay for.”
Oliver Atkinson, director of online estate agents Urban Sales and Lettings, points out that online estate agents can keep costs down because they generally work from a central location and not from an expensive high street office.
“Traditional agents say that you pay for the service you get – and you can’t beat using a local estate agent. But the reality is that it is just not the case any more. It’s very hard to see how the high street agent can still justify charging the fees they do.”
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Tips for going it alone
● Don’t arrange viewings when you’re alone – ask a friend or neighbour over.
● If selling online or privately, you need a good solicitor. If a dispute arises with a buyer, you will probably have to handle it yourself, although some online agents may step in.
● Make an A4 advert featuring the best photograph you have of your home (preferably in colour), laminate it and give it pride of place on noticeboards. Target public buildings close to the property that is for sale.
● Market your own property: The rules of flyer design are simple. Use colour rather than black and white. Keep the colours eye-catching, but not garish.
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